A cursory glance at Morninstar’s 8 mutual fund categories. - U.S. Equity, International, Alternative, Allocation, Sector Equity, Taxable Bond, Municipal Bond and Commodities shows 103 sub categories. Over the past three months ending 4/30 I could find only eight positive - Bear Market, Energy, Bank Loan, Utilities, HYMunis, Muni Single State, ultrashort Bond, and Commodities Broad Basket. The above are sub category *averages* and yes I realize there were many exceptions to the average. Not making any point here but the obvious. Also don’t see much investor fear or anxiety over the past three months. Whether that is meaningful or not as a contrarian indicator only time will tell.
Comments
The below M* link is averages for categories they post, as of April 30 close.
Our house is now at about 50% cash, being money markets at Fidelity at about 1.3% yield.
Not much, but better than going backwards.
Our last big money move will have a 10 anniversary on June 17, when we moved to about 87% cash. Sadly, might have to do this again.
Our two largest equity areas at this time are tech. and healthcare. But, these two continue to get beat upon, too.
Today, May 1 is a flop so far for our holdings in general.......11 am, EST.
Can't bitch about 10 years of nice returns; but I don't want to have to go hide the money, either.
http://news.morningstar.com/fund-category-returns/
Take care of yourself,
Catch
2015/early 2016 correction, about all I can say with certainty is there won’t be much fear or anxiety. There is a whole generation of younger investors who are conditioned to buy the dip who never had to experience a 2008 type meltdown. They all say they will stay the course and continue buying, but let’s see.
You noted: " There is a whole generation of younger investors who are conditioned to buy the dip who never had to experience a 2008 type meltdown. They all say they will stay the course and continue buying, but let’s see."
Nothing more than investment theory with this I suppose.
--- The economy is having 10,000 baby boomers a day turn age 65.
--- Obviously, not all of them are invested in the markets, and will not have any impact
--- but many of these folks who have investments also have started to or near required to draw from IRA's and related.
Couple of questions with this:
1. If boomers with investments are watching their accounts, will they take cover when another correction takes place; as they will no longer be adding to their accounts (retired), nor have time for a recovery period.
2. It is not possible that the money amounts boomers will be pulling from investments be a larger total than "new" money going into markets from the "younger" ones?
Catch
I use “nominal” cash level (including short-term bonds) to gage relative risk exposure at any given time That doesn’t include the additional cash held indirectly thru balanced/allocation funds. 15% would be normal. 20% is high end. Prior to the mid-March meltdown I was at 22%. Did a little buying after that and now just above 20%.
For those who deride cash, I offer this 30-second video clip from a beloved investor of the past. His closing words extol the “beauty” of cash.
With treasury yielding near 3%, bond funds are struggling this year. Two or more rate hikes this year pose considerable headwind for bond funds. Actively managed funds are doing better than the bond index.
Regards,
Ted
While you’re making predictions,
- Who will win the 2018 World Series?
- Will gold first hit $1200 or $1400? (The exact date this will occur would also be apprecisted.)
- On what date will NASA confirm the existence of life beyond Earth?
BTW: You posted a Barrons article last week that predicted a “rosy” future for gold. I haven’t heard back from you on that one. Specifically the extent to which you agree / disagree with Barron’s and what amount of gold, if any, you hold? - https://www.mutualfundobserver.com/discuss/discussion/40620/commodities-now-all-roads-lead-to-gold
Thanks
Regards,
Ted
If you’ve got the stomach to stay the course that’s fine. That type of commitment isn’t for everyone - especelly someone near 75 with a 10-year life expectancy.
October 2007 to March 2009
S&P 500 high: 1565.15, Oct. 9, 2007
Low: 682.55, March 5, 2009
S&P 500 loss: 56.4 percent
Duration: 17 months
@Ted - Thanks for clearing up my question on gold. Wonder if it would be too much trouble on those hyped up sector promotions to insert a word of caution that you do not agree with the hype? And, I’ll assume your prophesitorical skills pertain mostly to equity valuations and do not extend to other matters like alien life?
Edit: Actually bank loan and non agency rmbs funds could be considered risk on positions.