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..... Is this "As Good As It Gets" for bonds going forward? For some bond sectors, perhaps.Flip a coin, eh? Goldman Sachs (GS) noted in early 2010 that the 10 year note was going to a 5.5% yield and later kinda apologized for that notation. Course, "As Good As It Gets" applies to all investment sectors, too. Are some equities overbought? I sure don't know, but a likely guess would be, yes. GS has a year end number on the SP-500 at 1250. Should I trust that number any more that the other 100 market fortune tellers spouting any day of the week?
I suppose the best two words I read recently about the markets were "we are defensively bullish". Okay, how about "optimistically bearish", too. Perhaps this house just needs to select a broad base of the100 best funds or etf's, set the tickers upon a large sheet of paper, stand back 15 feet and let rip with 12 darts. Done and finished.
Per David Rosenberg, July 27, 2012........
*****Markets were thrilled yesterday when European Central Bank president Mario Draghi said he would "do whatever it takes to preserve the euro. And believe me, it will be enough".
But Gluskin Sheff economist David Rosenberg said these were Draghi's famous last words, much like when Hank Paulson had said in August 2008, "If you have a bazooka in your pocket and people know it, you probably won't have to use it."
Or when Ben Bernanke said in June 2008, "the financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again."
Rosenberg said Draghi's words were pure rhetoric and he called Draghi a "leader of NATO - No Action, Talk Only - instead of a central bank".
Draghi's comments were widely interpreted as a return to the Securities Markets Program (SMP) which involves purchases of Italian and Spanish bonds. But Rosenberg said if this was in fact costless it would have been activated already.
He also poured cold water on talk about granting the European Stability Mechanism a banking license. "Frankly, this is likely to be a political decision in the end, which is beyond the purview of the central bank." And said a third LTRO (long-term refinancing operation) would do nothing more than buy some time.
Rosenberg argued that the underlying problem of Europe's sovereign and banking sector would ultimately hinge on its fiscal and regulatory policy and that there isn't much Draghi can do about it. *****
Personal note to the above: Mr. Draghi only mentioned saving the "euro"; nothing about saving any countries. Perhaps the "euro" will remain only in Belgium, the home of the ECB; into the future.
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 + .3% through + 2.4%, avg. = + 1.5% YTD = +13.8%
--- Int'l equity - 2% through + 1.6%, avg. = + .4% YTD = +9.2%
--- Fido Select. sectors - .8% through + 3.8%, avg. = + 1.3% YTD = +13%
--- U.S./Int'l bonds - 2.9% through + .12%, avg. = -.70% YTD = + 2.2%
--- HY bonds - .52% through + 0%, avg. = - .2% YTD = + 8.8%
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 - .59 % move this past week. We'll stay where we are at for today; to find what the new week and perhaps the end of the month with Mr. Bernanke brings to the plate.
Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = + .63%, YTD + 10.3%). 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 .... - .41% week, YTD = + 7.67%
PRPFX .... - .02% week, YTD = + 3.32%
SIRRX ..... - .13 % week, YTD = + 4.67%
TRRFX .... + .25% week, YTD = + 8.05%
VTENX ... + 0% week, YTD = + 7.13%
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
Yes, I watch and watched all bond areas. This link to a recent posting covers some of this: MFO, August 14
As to T's and HY. Treasuries have been the run to area for safety/risk off; and some feel this is no longer a concern (safety). The simple fact may also remain that the big houses are moving money around to take advantage of what is too expensive (sell) and buy what their perceive is too cheap.......some equity sectors. All the big houses/hedge funds/investment houses need is a money flip that might generate a profit of a % or 2 each and every week. There may be little regard for any fundamental aspect.......it's just money afterall.
As to HY: being connected to a company/equity, places these into another world apart from government issued debt. However, HY was pretty much flat this past week. Too much big money is moving into equities and one must suspect some of this money is coming out of bonds, regardless of the sector. EM bonds have also been weak, recently.
Back to the house painting.
Take care,
Catch