Howdy,
A thank you to all who post the links, start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... A recent post noted that while another's portfolio was tilted towards growth; our portfolio was inclined towards income. Our house views whatever investment sectors lead to growth of one's portfolio during any period, is growth; regardless of what investment vehicles drive the journey. The answer is no; our house is not invested for income; although the bond portfolio would suggest such actions. Whilst I was in 7th grade (same time the pencil was invented) my chosen science project was farm crop rotation and the resulting benefits. Five sheets of paper represented a 5 year period of crop rotation, with color schemes indicating which crop type was in which location for each year. Michigan's soils and climate allow for many of the staple grain crops to be rotated: corn, spring/winter wheat, soybeans, barley, etc. Many other crops are also planted, and within the staple group there are still more varieties. Aside from these crops are the numerous speciality crops of vegetables, fruit crops and sugar beets. The crop combinations reminds me of one's choices today for investment vehicles. A recent answer from a friend indicated he was invested in several bond and equity index funds via his adviser. I asked, "What type/style are these index funds?" He didn't know the answer, but thought it was a good question to ask, with an explanation. We related the question with a similar answer of; one owns a car or a truck. But, what type of car or truck? Is your car a Camaro ZL-1 or a Fiat 500? Not unlike a crop farmer, we investment farmers seek one thing, too; and that is growth from whatever style of investment suits our tolerance for risk vs the reward. Crop farmers and we face similar uncertainties. Farmers dealing with unknown forward weather conditions, and we deal with unknown forward monetary situations. We do have one large advantage over crop farmers. They are placed into the buy (plant) and hold (hopefully harvest a growth) of the crop; while we may plant our monies when and where we choose; as well as harvest a profit as dictated. So, the next time someone thinks you are an income investor based upon your holdings, you may note to them that you are indeed a growth investor; regardless of the investment crop types you have planted. We're all really growth investors, eh? Always attempt to be prepared to rotate those crops for your risk/reward farm!
The data/numbers below have been updated.
As to sector rotations below (Fidelity funds); for the past week: (Note: any given fund in any of these sectors will have varing degrees of performance based upon where the manager(s) choose to be invested and will not directly reflect upon your particular fund holdings from other vendors.)
--- U.S. equity - 2.3% through + .9%, avg. = - .02% YTD = +10.5%
--- Int'l equity - .9% through + 2%, avg. = + .96% YTD = +7.3%
--- U.S. eq. sectors - .1% through + 2.3%, avg. = - .04% YTD = +9.7%
--- U.S./Int'l bonds - .9% through + .4%, avg. = +.08% YTD = + 3.2%
--- HY bonds + .2% through + 1.5%, avg. = + .73% YTD = + 8.7%
An Overview, M* 1 Week through 5 Year, Multiple Indexes
I have added a few blips related to our portfolio and market observations at the below SELLs/BUYs and Portfolio Thoughts.
SELLs/BUYs THIS PAST WEEK:
NONE
Portfolio Thoughts:
Our holdings had a + .57 % move this past week. Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = + .26%, YTD + 8.48%). The equity markets still appear a bit on edge; so our portfolio will stay in place for now. NOT SURE why the European markets popped so much on Friday. Perhaps there is some good inside private info finding its home. Our portfolio obtained much of its return this week, from the high yield and emerging markets bond areas. There were a number of large swing days for pricing in some bond sectors; further indicating the head scratching between the equity and bond kids. Two year Spanish bond yields moved down quite a bit, which indicates to this house that the "powers" may be attempting to stabilize this short term borrowing area and hope things settle down enough to buy time for the 10 year Spanish bond which keeps bumping around 7%. A country today can not afford to operate with a 7% yield on a 10 year bond. I will retain the below write from previous weeks; as what we are watching still applies.
--- commodity pricing, especially the energy and base materials areas; copper and related.
--- the $US broad basket value, and in particular against the Euro and Aussie dollar (EU zone and China/Asia uncertainties).
--- price directions of U.S. treasury's, German bunds, U.K. gilts, Japanese bonds; and continued monitoring of Spanish/Italian bond pricing/yield.
--- what we are watching to help understand the money flows: SHY, IEF, TLT, TIP, STPZ, LTPZ, LQD, EMB, HYG, IWM, IYT & VWO; all of which offer insights reflected from the big traders as to the quality/risk, or lack of quality/risk; in various bond sectors.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
The first two links to Bloomberg are for their list of balanced/flexible funds; although I don't always agree with the placement of fund styles in their categories.
Bloomberg Balanced
Bloomberg Flexible
These next two links are for conservative and moderate fund leaders YTD, per MSN.
Conservative Allocation
Moderate Allocation
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 5 funds (below) we watch for psuedo benchmarking are the following:
***Note: these week/YTD's per M*
VWINX .... + .33% week, YTD = + 7.89%
PRPFX .... + .02% week, YTD = + 2.71%
SIRRX ..... + .17 % week, YTD = + 4.67%
TRRFX .... + .42% week, YTD = + 7.16%
VTENX ... + .29% week, YTD = + 6.64%
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh? Hey, I probably forgot something; and hopefully the words make some sense. Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
---Below is what M* x-ray has attempted to sort for our portfolio, as of June 1, 2012---
From what I find, M* has a difficult time sorting out the holdings with bond funds.
U.S./Foreign Stocks 1.9%
Bonds 93.9% ***
Other 4.2%
Not Classified 0.00%
Avg yield = 3.72%
Avg expense = .55%
***about 16% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"; which doesn't always imply the holdings, eh?
-Investment grade bond funds 28.2%
-Diversified bond funds 22.4%
-HY/HI bond funds 14.5%
-Total bond funds 32.4%
-Foreign EM/debt bond funds .6%
-U.S./Int'l equity/speciality funds 1.9%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX.LW Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
ACITX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
LSBDX Loomis Sayles
PONDX Pimco Income fund (steroid version)
PLDDX Pimco Low Duration (domestic/foreign)
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
---Equity-Domestic/Foreign
NONE outright, with the exception of equities held inside of some of the above funds.
Comments
My family roots go way back into farming ... Way back to the 1800's. However, our modern day farm is, perhaps you guessed it, the stock market. The farms ware sold off peace meal through the years and the sell proceeds were invested in mostly good dividend paying stocks. The family today only owns a small part of the land that it once did as it transitioned form farming cash crops to harvesting cash dividends. My great grandfather felt that it was going to cost too much to modernize the farms. I remember, when I was only a child, he called a meeting one Easter Weekend in the mid 50's of the family members to discuss and vote on the issue. His proposal passed and he began through the years to sell the land off peace meal. Even the grandkids received distribution checks to do with as they pleased; but, he let us know he felt we should invest it. Most followed his forsight and invested as he had said he felt we should. Well those that did are today happy campers and we pay as he asked us to do the Lords share off the income we receive to a church he help found.
As a rule, I compute my year-to-date return once each quarter incuding year end. However, I made an exception since I have had some time on my hands through the summer working about two days a week and enjoying time off the rest of the time. For the same time period as your ending August 4th, I was up 9.31% ytd. Incomparison, the Lipper Balanced Index, my boggey, was up 7.55%. So you can see I am beating my boggey.
As you may recall, I have been doing some crop rotation myself and sold some equity ballast off from March through May; and, about 30 days ago, I sold off about half of my utilities (8%). I have started and I am currently in the process of raising my allocations to energy by (2%), materials by (2%) and my exposure to diverisified commodities by (2%). I'll take the residual of about 2% to my pocket with a cut to Uncle Sam to pay his tax on my profits and then some on to the church. Currently, I am about half way there with this transfiguration and its process. What has put a hold on it is the recent market upward run. I feel it is important to average in towards low points in the markets (not high points) ... and, we are no where near that now, by my charting, over the past 90 days.
Currently, utilites are up over the past 30 days by about 1.9%, the sector I reduced my position in, by half, down to 8%. The sectors I am increasing my weightings in have over the same period returned for diverisified commodities about 4.8%, energy about 3.6% and materials has been trailing with a loss of about 1.5%. I feel, in time, they will catch up.
As you can see, I employ some crop harvesting and rotation myself. Currently I have my broad asset allocation trageted to bubble when I complete the reallocation process at 55% equity, 25% income, and 20% cash. I've got to do some more planting to get there though. That would leave me with about 10% cash that I could make some special plantings with, from time-to-time, and raise equity plantings (ballast) up to about 65% if I feel it was warranted and I so desired. Perhaps, might seed a little to the income area.
Keep up the good work with your portfolio. Those are good performance returns for a divesiified income portfolio you have assembled. I feel there are some that are probably envious of you with the success and these good performance numbers you are reporting. But, not me as I truly celebrate your success and enjoy reading your post. You are indeed a good assemblyman.
Best regards,
Skeeter
derf
Thanks for the question. I use Miracle Grow.
I don't use Miracle Grow on the funds themselves ... but, I do use it on some house plants, my roses and in my vegetable and flower gardens. Now, some of the funds that I own, own stock of its maker, that being Scotts Mircle-Gro Products, Inc.
Perhaps the fertilier product has indirectly engerized and propelled these funds through their product sales which has resulted in profits for the company that has has resulted in an increase stock valuations for their shareholders ... and, with this an increase in the nav for the funds that I own that hold their stock.
In addition, you can watch Making It Grow on South Carolina's Public TV Stations. The program is produced by Clemson University. Its host, Rowland P Alston, Jr, takes questions from listeners during its live show.
Hey, maybe he can help you with a good selection of fertlizer tailored to your own application.
I have linked the site in case you are interested.
http://www.scetv.org/index.php/making_it_grow/information/about_making_it_grow
Whatch-u-think?
Skeeter
Well, my statement did stretch the age a bit.........but, I am receiving those letters in the mail about preparing for Medicare and related plans..........Yikes, the clock sure moves fast, eh?
Take care,
Catch