Our Funds Boat, Week + .09%, YTD + 11.23%,.....Mixed Bag.....10-21-12

catch22

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 near 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.....Mixed Bag of Thoughts.....If we periodically need an excuse related to investment decisions; this study Memory and Doors may cause one to consider staying put in one room for a time period, during crucial investment thinking sessions.
A recent post Bond Funds, Total Return or Equity Hedge?
brought forth fewer responses than I expected. Our house will answer with "Total Return"; as that is always our goal, from whatever market sectors we may use. The original question is in place with the basis thought that the majority of investors have been equity investors for several decades. The new question may be whether this will be the case with new and current investors today. Equity investments surely will not disappear; but will this sector draw and continue to hold the most money?
Lastly, the most common proposition of bonds being used as an equity hedge; may become, "equity investments used as a "bond holdings hedge". All of us have our investment holdings placed, based upon whatever we perceive to be the best place for our money, set within our own risk and reward scale. In one fashion or another, we all have some form of a long/short, equity-income, balanced, flexible or other style of investing when looking at the overall portfolio holdings in place. We manage the managed funds, or at the very least; manage the passive or index holdings of our portfolios. We've all placed our investment mix to form a style box of one type or another, eh?

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 - 1.78% through + 2.2%, week avg. = + .36% YTD = + 15.5%
--- Int'l equity - .33% through + 2.5%, week avg. = + 1.06% YTD = + 13.4%
--- Select eq. sectors - 2.9% through + 3.9%, week avg. = + .51% YTD = + 15%
--- U.S./Int'l bonds - 1.7% through + 0.0%, week avg. = - .31% YTD = + 3.48%
--- HY bonds + .09% through + .50%, week avg. = + .33% YTD = + 11.77%

A Decent Overview, M* 1 Month through 5 Year, Multiple Indexes

You may consider our portfolio to be quite boring, but you may be assured that it moves and bends each and every day; from forces beyond our control.
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: = Reduced our holdings in FINPX, with the proceeds added to FRIFX and PONDX.



Portfolio Thoughts:

Our holdings had a + .09 % move this past week. If one viewed the market data between the Friday's of Oct. 12-19, the numbers would indicate a so-so market in equity and bond sectors. The fact that large swings in both some equity and bond sectors had taken place between Monday and Friday of the week ending Oct. 19 would not be evident; but there were some very big swings in closing out the trading week. Most equity sectors ended the week in the positive, while many bond sectors were negative in returns. We'll continue to watch; but do not have plans at this time, to enter into equity areas.

Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = + .40%, YTD + 12.4%). b> Still plodding along, and we 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, TIPZ, 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.

The Funds Boat is at anchor, riding in the small waves, watching the weather and behind the breakwater barrier. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.

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 .... + .37% week, YTD = + 9.80%
PRPFX .... - .14% week, YTD = + 6.73%
SIRRX ..... + .04% week, YTD = + 6.07%
TRRFX .... + .24% week, YTD = + 10.11%
VTENX ... + .12% week, YTD = + 8.96%

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 18% 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.

Ted

How near retirement are you ?
Regards,
Ted

catch22

Howdy Ted,
Within 6 months + or - a month or two. Very close, at the least.
Regards,
Catch

Ted

Catch: For your information, 50% invested in VIPSX and 50% invested in VTSMX, just two funds, has had a YTD return equal to 10.85%

catch22

Hi Ted,
Yes................we were commenting about this over the past few months; as our daughter's 529 is split 50/50 between VITPX and VBMPX.
Looks like we're doing a lot of work with our own portfolio for not much gain, eh?
Thank you for the note.
Regards,
Catch

hank

On a day like this, I'd like more bonds.