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I have posted a good number of times how I govern my portfolio through my sleeve management system. Here is an update as of 02/15/2018. This should answer your questions.
Sleeve Management System
Now being in retirement here is a brief description of my sleeve management system which I organized to help better manage the investments held within mine & my wife’s combined portfolios. Currently, the master portfolio is comprised of two taxable investment accounts, two self directed retirement accounts, a health savings account plus two bank accounts. With this, I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty/theme sleeve plus a special investment (spiff) sleeve. Each sleeve (in most cases) consists of three to nine funds with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held. By using the sleeve system one can get a better picture of their overall investment landscape and weightings by sleeve and area. In addition, I have found it beneficial to Xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets along with using an equity allocation matrix, driven by my market barometer, as an aid to help set the stock allocation weighting. All funds pay their distributions to the cash area of the portfolio with the exception being those in my health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount (if necessary) with the residual being left for new investment opportunity. Generally, in any one year, I take no more than a sum equal to one half of my portfolio’s average five year return. In this way, principal builds over time. In addition, most buy/sell trades settle from, or to, the cash area with some net asset value exchanges between funds taking place between funds.
Last revised: 02/15/2018 Master Portfolio
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral allocation weightings are cash 20%, income 30%, growth & income 35%, growth & other assets 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Currently, according to Morningstar Instant Xray, I am about 17% in the cash area, 25% in the income area, 31% domestic stock area, 20% foreign stock area & 7% in the other asset area. In addition, I have the portfolio set up in Morningstar’s Portfolio Manager by sleeve and as a whole for easy monitoring plus I use brokerage account statements along with some other Morningstar reports as well.
Cash Area (Weighting Range 15% to 25% with neutral weighting being 20%) Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual) Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 25% to 35% with neutral weighting being 30%) Fixed Income Sleeve: BAICX, CTFAX, GIFAX, LBNDX, NEFZX & TSIAX
Growth & Income Area (Weighting Range 30% to 40% with neutral being 35%) Global Equity Sleeve: CWGIX, DEQAX & EADIX Global Hybrid Sleeve: CAIBX, PMAIX & TIBAX Domestic Equity Sleeve: ANCFX, FDSAX & SVAAX Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FBLAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 20% with neutral weighting being 15%) Global Sleeve: ANWPX, SMCWX & THOAX Large/Mid Cap Sleeve: AGTHX, AMCPX & SPECX Small/Mid Cap Sleeve: IIVAX, PCVAX & PMDAX Specialty & Theme Sleeve: LPEFX, PGUAX & NEWFX Spiff Sleeve: See 500 Compass & Global Compass for spiff positioning
I feel I have answered your question about how I do things as this is pretty much detailed in the above sleeve management system. I will say, I use a good number of sources to help me determine how I move money within the sleeves and weight my fund selections.
The spiffs are described as special investment postions as determined by the compasses whcih use etf's as asset proxies.
I just bought some OSTIX in my solo 401k. Thanks to @BobC for discussing it in various posts. It seems like a good place to park funds while waiting for a stock market pullback--and if that pullback doesn't come, I can live with the 5-6% return it's averaged for the past 10 years. I really like OSTIX's low duration, low volatility, and how it only fell 5.5% in 2008 when other HY funds cratered.
Hi @expatsp OSTIX is a well run short duration HY bond fund and is doing fine in the current bond market shake. And yes, the HY funds got whacked in the market melt. Keep in mind the return for OSTIX for 2008 was for a multi-sector fund; as the HY switch happened 2013. I have thrown a few bond funds in the below chart for reference, and the chart starts with early 2007 to follow transistions just before and after the melt. I don't recall other investment grade bond funds during the market melt; although PTTRX had a 5.5% return, as this fund was one of our investments at the time. A chart of U.S. Treasury at this time would indicate double digit returns for some, although corp. and mortgage related during the period didn't perform well.
HI @catch22, Many thanks for the comparison funds. Looking at the chart, OSTIX still looks like it's had the balance of risk and reward that I'm looking for with that chunk of funds.
When you write "the HY switch happened 2013" do you mean that OSTIX's investment strategy changed drastically then, and it became a HY fund whereas before it was something tamer? Or do you mean that M* reclassified it? The latter wouldn't bother me. The former would make me take a second look, though I don't mind a bond fund having some flexibility, if the manager seems to have a record of using it well.
This link is from July, 2008, with data from March 31, 2008 for OSTIX. Holdings indicate 53% of bonds rated BB and B and other unrated. These could be on the edge of speculative, eh? The data also indicates 105% turnover for the data period. One may suspect the team was busy trying to assess what they thought they saw taking place at the time with mortgage securities during 2007. The team must have made some moves to the portfolio, as the losses were not as severe as fully loaded HY funds, as shown below. I looked at this fund a few times, but moved to other areas.
Another chart for Dec. 17, 2007 - July, 2009. I looked at the period of mid-Dec. 2007 to mid-Dec., 2008 and found the following returns: ---OSTIX = -12% ---SPHIX = -28% ---PTTRX = +5.4% --- IEF = +22% --- EDV = +65%
Obviously, the run to safety is apparent, at least for a short period of time; as indicated by the returns in government treasury issues. We held about 5 different HY funds after the worst of the melt (early 2009). I recall checking the yields and prices daily for these funds and a big "WOW" for several months, as to yields pushing against 20%. The funds had monthly distributions for these yields; and then as the markets calmed, the yields moved down; but one was then obtaining very good gains on the pricing side of the HY funds. A most amazing period I will not likely watch/see again.
Lastly, this chart from Jan. 2007 - the end of 2011. Keep in mind that Europe and other global areas were still having traction problems in attempting to overcome the financial damage that had taken place. The SPY returns may look a bit odd, but the start point of this chart indicates total returns for the period.
@catch22 Thanks for the further charts & thoughts. I'm still feeling good about buying OSTIX, for my particular needs. Can I ask what bond funds you own? You've clearly done a lot of research & thinking on it. I'm hoping to move a pretty decent chunk of funds from equities to bonds over the next few months.
OSTIX lost 29.23% in 2008.That’s about what I’d expect from a fund holding 65% in junk bonds. BB is considered non-investment grade (junk). The fund’s 15% which Lipper classifies as “unrated” is probably also junk. When a bond is unrated, buyer generally applies its own methods of appraisal to determine the bond’s risk characteristics. Lipper also shows he fund holding 20% AAA (Government). That’s a way of hedging the credit risk from all the junk. Obviously didn’t work well in ‘08.
No intent to disparage the fund. Just trying to clarify what it owns. It may / may not meet any particular person’s needs. To be fair, Lipper rates the fund very highly compared to its peers (4 / 5 in everything except tax efficiency).
Yes - Unless they lied to the SEC in the Prospectus they filed with them. The -29.3% was followed by a +31% year - masking to some extent the ‘08 downdraft.
I stand corrected. The Prospectus I cited was a combined one for more than 1 Osterweis fund. The -29.3% figure was from Osterweis Fund. OSTIX held up incredibly well with only a 5.54% loss in a tough year.
Thanks @Ted. Apologies to everyone. I’ll need to do a better job checking these things.
Sold my utility sector funds after much deliberation. In a rising rate environment, the last year and a half was breakeven at best, and the place it held in my overall portfolio was one of ballast. Had some very nice profits prior to 2017. For now will keep in cash. Have held these over 5 years, it was time to move on.
I've held OSTIX for a few years and I've been satisfied with its performance. OSTVX performance ,however, has been surprisingly disappointing, and I'm glad I passed on this fund. I've stuck with more reliable allocation funds like PRWCX FBALX VWELX MBEAX and JABAX .
>>>Has the current bond sell down found a short term bottom? This appears to be the case as of Feb. 26. But, the rate rise has left many investment grade bond funds being down YTD in the range of minus 1 to 3% depending on the mix. Recovering this much lost value will be a challenge for the remainder of this year. Not sure at this point what will be done in the bond area. Inflation related bonds are "squat" at this point, U.S. Treasury the same, muni are not happy either (although we don't invest in this area) and cash is worse, considering the yield versus the expense ratio of such holdings, which leads to "negative return". Although the 10 and 30 gov't. issues have risen in yield, the spread remains about the same (about .3%) as for the past several months going back into mid-2017. So, the 30 year is not bumping up the yield much; which could reflect bond traders views of forward growth and inflation. Still a crazy investment world; and we remain swimming with the sharks!
>>> The following may read as an investor confessional.
We document portfolio changes and certain broad markets indications on Saturdays. We use a word document we built showing accounts and a holdings list (using a black or red pencil) to note the weekly change as well as YTD. The whole process requires about an hour worth of time, but is what we desire to "view" our holdings and the markets. We usually write a note on the paper about the past week. Something like: bond yields moving up; equity flat, except Europe and/or Asia, whatever tweaks our thoughts. During this past January, I wrote on 3 weekly reports, in red pencil...............EQUITY GAINS, INSANE !!!At the Jan. 26 close the YTD for, SPY = +7.4%, FHLC = +10.7%, FDGRX = +10.9%, FTEC = +8.9%, yes; insane was the operative word for the first few weeks of the new year. Our portfolio was near 80% equity at the time. As we are beginning a transition period with accounts; we began a "sell". Three company retirement accounts are being liquidated (roll-over) to consolidate all monies into Fidelity IRA/brokerage accounts we have had for 40 years. For a few weeks we will have a boat load of money doing nothing, with cash being more than 50%. One does not fall in love with a holding, yes? We had access to a closed superior fund, being FDGRX . Two other funds that were maintained in these accounts were, JAGTX and PRHSX. All of these can be closely replicated inside of Fidelity. The chart further down the page indicates returns for the holding period. Also, within IRA accounts; we sold all of our real estate and Europe oriented holdings in early January. We're not a buy and hold household, but don't move much around very often. The next several months will find a re-do of the retirement portfolio. All portfolio holdings will be inside of traditional and ROTH IRA's, with the exception of a taxable brokerage account which amounts to .05% of total holdings. With this, we do not have to be concerned with taxable events taking place with buys and sells. The below list is + or - a few % points of actual; as these values are a few weeks old.
'Course this current and near term mix won't do much in an equity UP market; but would provide shelter if the equity sectors want another BIGGER breather. We have not been this deep into cash since 2008.
I/we continue to get closer to the end game. I recall Ted noting, perhaps 2 years ago; that he was going to quit the game. I understand you, Ted. Tis a most difficult habit to break, IMHO. This current transition of where funds are held has been on hold for awhile and now is good a time as any to make the move. I'm not completely sure how I will react to a final decision to leave the active game; but I will likely be a bit moody for a period of time. I do understand that an individual, knowledgeable investor has never had more options available to pursue a positive investment return and that will be the main rub when leaving the game.
The personal critical mass with all of this IMHO; is the mix of one being curious, having at least an average intelligence, having some serious time available for study and observation and a proper attitude, perhaps being the most difficult portion of a "know thy self" with patience being into the mix from the knowledge. I don't know that these areas may be readily taught, but can be learned to some extent, given enough time. Some of these are DNA, I do believe. We should wholly wish that we could "mind meld" to the children regarding 40 years of investing learning, "my thoughts are your thoughts" or "my knowledge is your knowledge", regarding investments. The normal channels of teaching will continue, as whatever money remains will be inherited; and teaching needs to provide at least basic knowledge in the investment area, as well as individual level personal financial. Perhaps nothing more will result other than select 3 moderately aggressive balanced funds from different vendors; let them be managed and be happy.
Whew !!! Should have been a new topic post, I guess. It's all your fault @expatsp. Perhaps some one needs to start an "old timers" investment life thread. Well, now you know some of the "investor soul" of this house. But, the investing itch remains at this time.......still watching BOTZ , ROBO , and IXN ; although part of this area is covered with some holdings in FTEC . Robotic/A.I. is not going away, but BOTZ in particular, may still be a bit too hot to handle. The big one's; Google, Alphabet and Microsoft will get one some returns from this area, too. Regards, Catch
We should wholly wish that we could "mind meld" to the children regarding 40 years of investing learning, "my thoughts are your thoughts" or "my knowledge is your knowledge", regarding investments.
Nice write-up @Catch22. If @expatsp doesn’t like your response to his query he’s got a serious problem.. Thank you for the time and effort you put into this. Umm ... What you’re saying in the bit I extracted is that It’s hard to teach experience.. Put another way: There’s some things that can be learned only through experience.
Similar in sentiment to something Ed Studzinski wrote back in January. He was talking about the Buffets of the world (you and I rest easily a couple dozen “leagues” below that caliber). But the idea of how one’s experiences and thought processes are difficult to replicate or to imbue in others is remarkably similar.
Here’s Ed’s take (From David’s January 2018 Commentary): “But I do think that we underestimate, to our great loss, the extent to which the Buffetts, the Druckenmillers, the Millers, the Mungers, are all outliers more than two standard deviations removed, who have going on in their heads processes which are not easily replicated by a group of analysts and an investment committee sitting around a table.”
Comments
I have posted a good number of times how I govern my portfolio through my sleeve management system. Here is an update as of 02/15/2018. This should answer your questions.
Sleeve Management System
Now being in retirement here is a brief description of my sleeve management system which I organized to help better manage the investments held within mine & my wife’s combined portfolios. Currently, the master portfolio is comprised of two taxable investment accounts, two self directed retirement accounts, a health savings account plus two bank accounts. With this, I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty/theme sleeve plus a special investment (spiff) sleeve. Each sleeve (in most cases) consists of three to nine funds with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held. By using the sleeve system one can get a better picture of their overall investment landscape and weightings by sleeve and area. In addition, I have found it beneficial to Xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets along with using an equity allocation matrix, driven by my market barometer, as an aid to help set the stock allocation weighting. All funds pay their distributions to the cash area of the portfolio with the exception being those in my health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount (if necessary) with the residual being left for new investment opportunity. Generally, in any one year, I take no more than a sum equal to one half of my portfolio’s average five year return. In this way, principal builds over time. In addition, most buy/sell trades settle from, or to, the cash area with some net asset value exchanges between funds taking place between funds.
Last revised: 02/15/2018 Master Portfolio
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral allocation weightings are cash 20%, income 30%, growth & income 35%, growth & other assets 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Currently, according to Morningstar Instant Xray, I am about 17% in the cash area, 25% in the income area, 31% domestic stock area, 20% foreign stock area & 7% in the other asset area. In addition, I have the portfolio set up in Morningstar’s Portfolio Manager by sleeve and as a whole for easy monitoring plus I use brokerage account statements along with some other Morningstar reports as well.
Cash Area (Weighting Range 15% to 25% with neutral weighting being 20%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 25% to 35% with neutral weighting being 30%)
Fixed Income Sleeve: BAICX, CTFAX, GIFAX, LBNDX, NEFZX & TSIAX
Hybrid Income Sleeve: APIUX, AZNAX, CAPAX, DIFAX, FISCX, FKINX, ISFAX, JNBAX, PCGAX & PGBAX
Growth & Income Area (Weighting Range 30% to 40% with neutral being 35%)
Global Equity Sleeve: CWGIX, DEQAX & EADIX
Global Hybrid Sleeve: CAIBX, PMAIX & TIBAX
Domestic Equity Sleeve: ANCFX, FDSAX & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FBLAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 20% with neutral weighting being 15%)
Global Sleeve: ANWPX, SMCWX & THOAX
Large/Mid Cap Sleeve: AGTHX, AMCPX & SPECX
Small/Mid Cap Sleeve: IIVAX, PCVAX & PMDAX
Specialty & Theme Sleeve: LPEFX, PGUAX & NEWFX
Spiff Sleeve: See 500 Compass & Global Compass for spiff positioning
So, you're not investing in or using the SPDR sectors for decision making for your portfolio mix.
I feel I have answered your question about how I do things as this is pretty much detailed in the above sleeve management system. I will say, I use a good number of sources to help me determine how I move money within the sleeves and weight my fund selections.
The spiffs are described as special investment postions as determined by the compasses whcih use etf's as asset proxies.
Cordially,
Old_Skeet
OSTIX is a well run short duration HY bond fund and is doing fine in the current bond market shake. And yes, the HY funds got whacked in the market melt.
Keep in mind the return for OSTIX for 2008 was for a multi-sector fund; as the HY switch happened 2013.
I have thrown a few bond funds in the below chart for reference, and the chart starts with early 2007 to follow transistions just before and after the melt. I don't recall other investment grade bond funds during the market melt; although PTTRX had a 5.5% return, as this fund was one of our investments at the time. A chart of U.S. Treasury at this time would indicate double digit returns for some, although corp. and mortgage related during the period didn't perform well.
http://stockcharts.com/freecharts/perf.php?OSTIX,PTTRX,FTHRX,VBIIX,FTBFX,SPHIX&n=2803&O=011000
Take care,
Catch
When you write "the HY switch happened 2013" do you mean that OSTIX's investment strategy changed drastically then, and it became a HY fund whereas before it was something tamer? Or do you mean that M* reclassified it? The latter wouldn't bother me. The former would make me take a second look, though I don't mind a bond fund having some flexibility, if the manager seems to have a record of using it well.
This link is from July, 2008, with data from March 31, 2008 for OSTIX. Holdings indicate 53% of bonds rated BB and B and other unrated. These could be on the edge of speculative, eh? The data also indicates 105% turnover for the data period. One may suspect the team was busy trying to assess what they thought they saw taking place at the time with mortgage securities during 2007. The team must have made some moves to the portfolio, as the losses were not as severe as fully loaded HY funds, as shown below. I looked at this fund a few times, but moved to other areas.
https://www.forbes.com/lists/2008/42/426910.html
Another chart for Dec. 17, 2007 - July, 2009. I looked at the period of mid-Dec. 2007 to mid-Dec., 2008 and found the following returns:
---OSTIX = -12%
---SPHIX = -28%
---PTTRX = +5.4%
--- IEF = +22%
--- EDV = +65%
http://stockcharts.com/freecharts/perf.php?OSTIX,PTTRX,SPHIX,IEF,EDV&l=0&r=389&O=011000
Obviously, the run to safety is apparent, at least for a short period of time; as indicated by the returns in government treasury issues. We held about 5 different HY funds after the worst of the melt (early 2009). I recall checking the yields and prices daily for these funds and a big "WOW" for several months, as to yields pushing against 20%. The funds had monthly distributions for these yields; and then as the markets calmed, the yields moved down; but one was then obtaining very good gains on the pricing side of the HY funds. A most amazing period I will not likely watch/see again.
Lastly, this chart from Jan. 2007 - the end of 2011. Keep in mind that Europe and other global areas were still having traction problems in attempting to overcome the financial damage that had taken place. The SPY returns may look a bit odd, but the start point of this chart indicates total returns for the period.
http://stockcharts.com/freecharts/perf.php?FAGIX,SPHIX,DHOIX,FHIIX,SPY&l=2011&r=3267&O=011000
Well, anyway; I've jabbered too much and chores are calling.
Take care,
Catch
No intent to disparage the fund. Just trying to clarify what it owns. It may / may not meet any particular person’s needs. To be fair, Lipper rates the fund very highly compared to its peers (4 / 5 in everything except tax efficiency).
If interested, this article contains a chart re various credit rating agencies’ bond classification. https://en.wikipedia.org/wiki/Bond_credit_rating
http://performance.morningstar.com/fund/performance-return.action?t=OSTIX®ion=usa&culture=en_US
Yes - Unless they lied to the SEC in the Prospectus they filed with them. The -29.3% was followed by a +31% year - masking to some extent the ‘08 downdraft.
http://quote.morningstar.com/fund-filing/Prospectus/2017/6/30/t.aspx?t=OSTIX&ft=497&d=c8ed134f5a9dbb76448b5042caf946b2
Regards,
Ted
https://finance.yahoo.com/quote/OSTIX/performance?p=OSTIX
https://www.osterweis.com/mutual_funds/strategic_income/performance
Thanks @Ted. Apologies to everyone. I’ll need to do a better job checking these things.
PS - Please cut me a little slack guys. If you pull up the Prospectus I linked you’ll note that at the top of the first page M* labels it as ”Osterweis Strategic Income Fund”. http://quote.morningstar.com/fund-filing/Prospectus/2017/6/30/t.aspx?t=OSTIX&ft=497&d=c8ed134f5a9dbb76448b5042caf946b2
All of our bond holdings currently remain with FCBFX, as investment grade corp. had been holding their own.
First chart = OSTIX v FCBFX , about 4 years
http://stockcharts.com/freecharts/perf.php?FCBFX,OSTIX&p=6&O=011000
Second chart = same 2 funds, but past 1 year shows superior performance of OSTIX, as U.S. interest rates started to move upward.
http://stockcharts.com/freecharts/perf.php?FCBFX,OSTIX&p=5&O=011000
>>>Has the current bond sell down found a short term bottom? This appears to be the case as of Feb. 26. But, the rate rise has left many investment grade bond funds being down YTD in the range of minus 1 to 3% depending on the mix. Recovering this much lost value will be a challenge for the remainder of this year. Not sure at this point what will be done in the bond area. Inflation related bonds are "squat" at this point, U.S. Treasury the same, muni are not happy either (although we don't invest in this area) and cash is worse, considering the yield versus the expense ratio of such holdings, which leads to "negative return". Although the 10 and 30 gov't. issues have risen in yield, the spread remains about the same (about .3%) as for the past several months going back into mid-2017. So, the 30 year is not bumping up the yield much; which could reflect bond traders views of forward growth and inflation. Still a crazy investment world; and we remain swimming with the sharks!
>>> The following may read as an investor confessional.
We document portfolio changes and certain broad markets indications on Saturdays.
We use a word document we built showing accounts and a holdings list (using a black or red pencil) to note the weekly change as well as YTD. The whole process requires about an hour worth of time, but is what we desire to "view" our holdings and the markets. We usually write a note on the paper about the past week. Something like: bond yields moving up; equity flat, except Europe and/or Asia, whatever tweaks our thoughts. During this past January, I wrote on 3 weekly reports, in red pencil...............EQUITY GAINS, INSANE !!!At the Jan. 26 close the YTD for, SPY = +7.4%, FHLC = +10.7%, FDGRX = +10.9%, FTEC = +8.9%, yes; insane was the operative word for the first few weeks of the new year. Our portfolio was near 80% equity at the time.
As we are beginning a transition period with accounts; we began a "sell". Three company retirement accounts are being liquidated (roll-over) to consolidate all monies into Fidelity IRA/brokerage accounts we have had for 40 years. For a few weeks we will have a boat load of money doing nothing, with cash being more than 50%.
One does not fall in love with a holding, yes? We had access to a closed superior fund, being FDGRX . Two other funds that were maintained in these accounts were, JAGTX and PRHSX. All of these can be closely replicated inside of Fidelity. The chart further down the page indicates returns for the holding period.
Also, within IRA accounts; we sold all of our real estate and Europe oriented holdings in early January.
We're not a buy and hold household, but don't move much around very often. The next several months will find a re-do of the retirement portfolio. All portfolio holdings will be inside of traditional and ROTH IRA's, with the exception of a taxable brokerage account which amounts to .05% of total holdings. With this, we do not have to be concerned with taxable events taking place with buys and sells.
The below list is + or - a few % points of actual; as these values are a few weeks old.
EQUITY = 38.5%
BONDS = 21.4%
CASH = 40.2%
FCBFX, IG BONDS = 19.9% of portfolio
VIIIX, BROAD U.S. EQUITY = 11.3%
DPLO PHARMA = 3.1%
GPROX (GLOBAL SM/MID CAP) = 3.1%
FTEC (U.S. TECH.) = 11%
FHLC = (U.S.HEALTHCARE) = 9%
VWINX = (60/40, BONDS - 1.7% /EQUITY - 1.2%) = 2.9%
CASH (1.1% ANNUAL RATE) = 40.4%
(above, more or less 100%)
'Course this current and near term mix won't do much in an equity UP market; but would provide shelter if the equity sectors want another BIGGER breather.
http://stockcharts.com/freecharts/perf.php?FDGRX,PRHSX,JAGTX,SPY&n=1407&O=011000 SPY included as a reference.
I/we continue to get closer to the end game. I recall Ted noting, perhaps 2 years ago; that he was going to quit the game. I understand you, Ted. Tis a most difficult habit to break, IMHO. This current transition of where funds are held has been on hold for awhile and now is good a time as any to make the move. I'm not completely sure how I will react to a final decision to leave the active game; but I will likely be a bit moody for a period of time.
I do understand that an individual, knowledgeable investor has never had more options available to pursue a positive investment return and that will be the main rub when leaving the game.
The personal critical mass with all of this IMHO; is the mix of one being curious, having at least an average intelligence, having some serious time available for study and observation and a proper attitude, perhaps being the most difficult portion of a "know thy self" with patience being into the mix from the knowledge. I don't know that these areas may be readily taught, but can be learned to some extent, given enough time. Some of these are DNA, I do believe. We should wholly wish that we could "mind meld" to the children regarding 40 years of investing learning, "my thoughts are your thoughts" or "my knowledge is your knowledge", regarding investments. The normal channels of teaching will continue, as whatever money remains will be inherited; and teaching needs to provide at least basic knowledge in the investment area, as well as individual level personal financial. Perhaps nothing more will result other than select 3 moderately aggressive balanced funds from different vendors; let them be managed and be happy.
Whew !!! Should have been a new topic post, I guess. It's all your fault @expatsp.
Regards,
Catch
Similar in sentiment to something Ed Studzinski wrote back in January. He was talking about the Buffets of the world (you and I rest easily a couple dozen “leagues” below that caliber). But the idea of how one’s experiences and thought processes are difficult to replicate or to imbue in others is remarkably similar.
Here’s Ed’s take (From David’s January 2018 Commentary): “But I do think that we underestimate, to our great loss, the extent to which the Buffetts, the Druckenmillers, the Millers, the Mungers, are all outliers more than two standard deviations removed, who have going on in their heads processes which are not easily replicated by a group of analysts and an investment committee sitting around a table.”
Thanks Catch,
Regards