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sorry one more question-buying funds with large percentage of cash

ET91
in Fund Discussions
Hi all, One more question. Sorry. At this point in my life, I am more worried about downside protection vs. upside. As a result, I own the following funds with large allocation to cash: FPA Crescent, FPA International value, IVA worldwide, Pinnacle value, Artisan international value and Fairholme (please don't laugh). Yes, I am (and have been) overweight value which has not paid off in the past 9 years (just an FYI, not a complaint). In addition to the above reason, I bought these funds as I turned cautious on the market when the S&P hit 1500 a while ago and Mr. Grantham (GMO) warned of a bubble (boy was Mr. Grantham WRONG/EARLY as the S&P went ahead and almost doubled). Here is my question. On the one hand these funds could let you sleep at night. However, that comes at a price (sometimes heavy price) as they all charge fees above 1% (1.44% in the case of pinnacle value). Sometimes I wonder if it is better to sit in cash instead. Although I am hoping that the managers can buy at the right price in the case of a downturn (no guarantees). Wondering what your thoughts are. In hindsight, now might be a good time to pile in these funds (not a few years ago).

Comments

  • BenWPBenWP
    The one thing I can manage is cash (LOL), but I'm willing to pay a manager to handle stocks and bonds. Ergo, I don't have funds holding lots of cash.
  • Old_Skeet
    edited November 2018
    I'm pretty much like @BenWP on this when it comes to cash and letting my fund managers handle stocks and bonds for me. In addition, I'll tweak my asset allocation and get more conserative with stock valuations being high by raising my allocation to cash and bonds and lowering my allocation to stocks. Within my stock allocation I'll also go more defensive by holding more of the traditional defensive sectors such as utilities, health care and consumer staples. In addition, my reit fund is doing well so I've been adding to it. Currently, I'm more towards 15% in my cash area and moving towards 20% ... in my income area I'm more towards 35% and moving towards 40% ... and, in my growth & income area I more towards 35% and staying there ... and, in my growth area I more toward 15% and reducing.
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