Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

A not so good three months for mutual funds

edited May 2018 in Fund Discussions
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

  • edited May 2018
    Hi @Junkster
    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
  • Diversification is dead. Didn't help in 2008 either. Move along, nothing to see here.
  • The user and all related content has been deleted.
  • It's been a head scratching few weeks for me, as I kept hearing from all of the "experts" on CNBC and Fox Business that this would be a blowout earnings season and the "fundamentals" are in place for a stock market surge. So far, it's been a big dud.
  • Maurice said:

    @Junkster when you say " Also don’t see much investor fear or anxiety over the past three months.", is that based on bulls versus bears stats, some other methodology or just gut instinct.?

    Some weird methodology not even worth mentioning. And certainly nothing I would base any asset allocation on. Whenever a real bear does come, and something more ominous than the late
    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.
  • Hi @Junkster et al

    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
  • Diversification is dead. Didn't help in 2008 either. Move along, nothing to see here.

    Truer words have not been spoken.
  • @catch22, I thought I was being conservative with 20% cash and 20% bond.
    Our house is now at about 50% cash, being money markets at Fidelity at about 1.3% yield/blockquote>
    No major move sofar but just watching.
  • edited May 2018
    catch22 said:


    Our house is now at about 50% cash, being money markets at Fidelity

    Sven said:

    I thought I was being conservative with 20% cash and 20% bond.

    All depends on your overall approach - especially what the “other” money is invested in. And let’s assume this discussion pertains only to folks in the “distribution” stage (rather than the “accumulation” stage).

    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.:)

  • Yogi LIVES!
  • Having cash allows for small buying this year - early Feb (9% down), March and April (5-6% down). Several funds I use have over 10% cash position. Only until recently, TRP Capital Appreciation reduced the cash to high single digit.

    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.
  • @MFO Members: The Linkster's cash holding is 1.19%. The S&P 500 will close out the year above 3,000.
    Regards,
    Ted
  • edited May 2018
    Ted said:

    The S&P 500 will close out the year above 3,000.

    @Ted - Hell, it might close the year at 5,000. Who knows? Unlike you, I don’t pretend to be able to predict the future. I think what some of us are talking about here is our own comfort levels and needs. Anyone who was 100% invested in March, 2009 is in a pretty sweet spot right now.

    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
  • @Hank - not a criticism just my own position with respect to cash. I hold less than Ted. It earns me nothing so why bother. My dividend stocks funnel me more than enough each month to cover my expenses and then some so we're good. I haven't a clue what the market or life will bring tomorrow or any other day or this year for that matter nor do I spend any time at all trying to figure it out. There are plants and trees to grow, places to see and grandkids to spoil none of which I have enough time for as it is. Those things are the only gold I care about. I should add margaritas to that list too.
  • @Hank: I have never liked gold, and I'm only the messanger, not the message !
    Regards,
    Ted
  • edited May 2018
    @Mark - Can we assume then that you went into October 2007 nearly fully invested in equities? Must have been some ride. S&P was off 56.4% over 17 months. Global markets worse.

    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?:)
  • @Hank - yes you can BUT in fairness I was not retired then AND I had more in mutual funds than I do now. If memory serves me I was down roughly 32% probably tempered by a 55-45 allocation to domestic-foreign funds. I also had no bond funds then unlike now where I hold a healthy bunch of bond CEF's. Ironically it was that market slump which kick started my dividend growth investment portfolio.
  • edited May 2018
    @Mark - Thanks. I always respect and appreciate your take.
  • edited May 2018
    Ted said:

    @MFO Members: The Linkster's cash holding is 1.19%. The S&P 500 will close out the year above 3,000.
    Regards,
    Ted

    If the S&P closes out above 3000 or even touches that mark during 2018 I will bow down at your feet from afar. My cash holding is now 0 but I am not in risk on assets.

    Edit: Actually bank loan and non agency rmbs funds could be considered risk on positions.

Sign In or Register to comment.