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Our Funds Boat, Year-End, + 13.04%, 12-31-12

edited January 2013 in Fund Discussions
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. The perspectives and investments are based, not upon a formal economic studies background; but from the "School of Hard Knocks & Studies", in which, we are still enrolled.

NOTE: This portfolio is designed for 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....."The bells are ringing for me and my bonds" or perhaps "Bonds on the Run" (from; Me and My Gal, Judy Garland/Gene Kelly, 1942, & Band on the Run, Paul McCartney/Wings, 1973). Numerous bond death announcements continue; and causes one to wonder whether they may awake from a deep sleep to find a neat stack of paper bonds upon their bed with blood streaming down the paper edges, not unlike hot chocolate poured upon one's favorite cake top. There has been a 10% increase in the yield of the 10 yr Treasury during the past few weeks. Is this a sign from the great bond gods? I don't know. All of us enjoy a well thought critique of an investment area. Whether I read a report about the equity or bond sectors; and an author states that this or that is go'in to hell in a hand basket, I will surely expect supporting details. Be as critical and watching of supporting evidence as possible; not just a statement from a perpetual equity bull. Yes, I include myself in this, too; be it equity or bond articles. I am picking on bonds and related stories now, because of all of the banner chat and headlines recently.
A few data trinkets related only to Fido funds and year 2012: U.S. oriented equity funds (51) returns ranged from +11.3 through +29% (avg.=+17.4%), Int'l equity funds (29) returns ranged between +4.1 through +36% (avg.=+19%) and Fido's select sector funds (39) ranged between +2.4% through +38% (avg.=+17.2%) (excluding their gold fund).
Equity or bond; there will be the happy and not so happy among them.
In the end, some bond funds will be happier than others with a sustained yield increase. Too many variables exist among active managed funds, etf's or indexes to determine the winners today.
As to the bond fund choices for us and their resulting managers, or lack of management; the range is far and wide, not unlike the equity world. Would you prefer government, corporate, muni or high yield? Where on the planet would you like the bond mix; U.S., Europe, Japan, perhaps emerging market debt? Quality. Would that be investment grade or down the ladder of qualilty into the junkiest stuff around? The same questions have to be asked of equity investments. For a taste of each area, one could get a little of each. Buy Verizon equity for quality of the stock and bond issues. Buy Frontier Communications (who bought, among other stuff; the throw aways of Verizon) and get a bit junker equity and bond offering. The same applies between Comcast and Charter Communications (cable provider). Comcast is in cruise mode at the time, more or less. Charter is playing in bankruptcy land. One pretty good and the other is trying to dig out of a hole. Combining the four, one may find a comfort zone between the stock and bond issues.

Stock etf list
Bond etf list

Perhaps a fully happy list of funds blended between bonds and equities; with the selected funds having their own balance, too; bond and equity funds with the full flexibility to "go with the flow" for their given mandate. Make a list of 10 each; to compensate for management problems here and there, and plant the money.

Lastly, as to the death of some bonds via a substantial and continued yield increase. I can not add anything further to what I or others have already detailed here during the past several months.

The futures have a real equity fire going as of Jan. 1, 5pm EST and perhaps some bonds will get burned tomorrow or for the remainder of this week, month or year.

Added note: Our 529 educational account is a straight forward 50/50 of VITPX and VBMPX, and managed an average of 10.4% for 2012. Our house will have to continue to review the more laggard funds we have, potential impacts and the hardest part; whether and/or what to sell and where to move the monies.

As to the funds list below, I had added after the tickers; the year return data. As to be expected with any holdings; there were some helpers and some laggards.

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 Nov. 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 = 3.99%
Avg expense = .57%

***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 +16.4%
SPHIX Fid High Income +14.9%
FHIIX.LW Fed High Income +14.3%
DIHYX TransAmerica HY +14.9%

---Total Bond funds
FTBFX Fid Total +6.5%
PTTRX Pimco Total +10.4%

---Investment Grade Bonds
ACITX Amer. Cent. TIPS Bond +6.1%
DGCIX Delaware Corp. Bd +14.9%
FBNDX Fid Invest Grade +6.2%
FINPX Fidelity TIPS Bond +6.5%
OPBYX Oppenheimer Core Bond +10.2%

---Global/Diversified Bonds
FSICX Fid Strategic Income +10.9%
FNMIX Fid New Markets +20%
DPFFX Delaware Diversified +7.1%
LSBDX Loomis Sayles +15.1%
PONDX Pimco Income fund (steroid version) +21.9%
PLDDX Pimco Low Duration (domestic/foreign) +5.9%

---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix) +18.9%

---Equity-Domestic/Foreign
NONE outright, with the exception of equities held inside some of the above funds.



Comments

  • edited January 2013
    I had a geometric (linked) return of 13.49% taking into account the inflows ( see my earlier post How to calculate portfolio returns )

    My portfolio is about 2/3 equity so I consider myself having done well enough.

    Certainly, you have done very well with bonds in 2012.
  • Hi Investor,
    One fund I recall that you still retain; and which we should have retained from the spring of 2012 is FLPSX. This one is on our equity review list for this year. And congratulations with your 2012 return, during some shakey periods.
    I suspect 2013 will be tough to sort out, too.
    Take care of you and yours,
    Catch
  • edited January 2013
    Reply to @catch22:

    Hi Catch,

    FLPSX is about 5% of my total retirement portfolio. I have not made any changes to this position. I'm happy with the fund.

    I've made several changes to my portfolio at year end.

    I've sold PRPFX to buy 1/2 PONDX, 1/4 SUBFX and 1/4 RWGFX.
    I've reduced FDGRX to add more to RWGFX.
    I've reduced ARTKX and FMIJX and added the proceeds to create roughly equal allocation to ARTHX, ARTRX, GPGOX and GPIOX.

    There are some other small changes at the margin that does not change the overall character.

    I think RWGFX is similar to FDGRX in terms of asset style (growth stocks) but on down quarters it seems to have better downside performance.
  • Reply to @Investor: Thanks for the link. I will recalculate our 2012 return.
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