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I would just suggest that you research short term trading positions of bond oef funds you might consider for short term parking purposes. I have read poster comments of those who have attempted to use DHEIX in that manner. Diamond Hill issued warnings to those investors that they cannot execute their particular investing practice, if investors move in and out of this fund quickly and often. Some funds can red flag posters who do that, and you can lose your investing privileges with that fund. I have personally experienced that when I was with Fidelity a couple of years ago with SPFLX/SPFPX, when it was widely recommended as a cash alternative fund. American Beacon contacted Fidelity brokerage and suspended my ability to invest in that fund in the future, because I was interfering with their ability to carry out their particular investing practices and efforts to keep fees low. I think funds that carry a lot of cash, or assets considered "cash alternatives" allow that short term trading practice more than funds who use mortgage securities, bank loans, and even some corporates.
I, like yourself, work through Schwab (I also am with Vanguard). I have had this discussion with my Schwab Pinnacle Representative in Indianapolis. Besides the short term redemption fee that the fund may impose, based on how Schwab processes orders with a fund family, he does not know how the fund would know that it is "you". I gather that if the fund is "small" and it receives a huge order from Schwab, it might trigger something.
I guess an analogy would be purchasing x dollars in a fund to qualify for institutional shares and then turning around and selling a bunch of shares. I have done this countless times with Schwab and Vanguard Brokerage and never heard a peep from either. This seems to support that the fund family did not know. If my representative at Schwab is correct, I wonder how American Beacon knew it was you.
On the related, what I also do not understand is that if for example American Beacon has a short term redemption fee and you are willing to pay it, what is the problem. If they do not have a short term redemption fee, then what is the problem. When I purchase and then sell a Vanguard fund, the trading policies are transparent.
@Mona: thanks for your post. A number of years back, I got flagged at VG. over a small 4 figure amount. I guess it was more of a warning than anything else . I had recently opened the account. Thanks for mentioning the qualifying amount then selling a bunch of shares. Did you wait the 30,60, or 90 day requirement before selling ? It seems to be some funds require a certain amount be in the account or in will be sold out ? Also before closing one more question. Did you try your buy then turn around & sell with a VG fund or a different fund that they sell ?
I'm so glad I transferred most of my money to Schwab. I got several thousand cash reward + I trade with no warnings. You can't do the following easy trade at Fidelity. Suppose your IRA has $100,500 in PIMIX and you want to buy $100K of JMUTX instead. At Schwab, you enter both trades. At Fidelity, you enter your sell but now you must call a rep. Then, they allow you to buy only 90% of the $100.5K...crazy irritating stuff.
I, like yourself, work through Schwab (I also am with Vanguard). I have had this discussion with my Schwab Pinnacle Representative in Indianapolis. Besides the short term redemption fee that the fund may impose, based on how Schwab processes orders with a fund family, he does not know how the fund would know that it is "you". I gather that if the fund is "small" and it receives a huge order from Schwab, it might trigger something.
I guess an analogy would be purchasing x dollars in a fund to qualify for institutional shares and then turning around and selling a bunch of shares. I have done this countless times with Schwab and Vanguard Brokerage and never heard a peep from either. This seems to support that the fund family did not know. If my representative at Schwab is correct, I wonder how American Beacon knew it was you.
On the related, what I also do not understand is that if for example American Beacon has a short term redemption fee and you are willing to pay it, what is the problem. If they do not have a short term redemption fee, then what is the problem. When I purchase and then sell a Vanguard fund, the trading policies are transparent.
Mona
Mona, I have not experienced the trading warning at Schwab, but I have not traded very often at Schwab. The personal experience I incurred was when I was at Fidelity, and it was Fidelity who contacted me, on behalf of American Beacon, with the warning about frequent trading from American Beacon. I had recently upgraded SPFPX to SPFLX, and I then had made a sell out SPFLX shortly thereafer, and that apparently triggered the warning.
Regarding DHEIX/DHEAX, I have not experienced that personally at Schwab, but I have only owned DHEAX a few months. However, I do recall another poster stating the "Diamond Hill Boys" frowned on his trading frequently in and out of the fund.
I don't understand the dynamics of the interaction between the fund companies and the brokerage companies, but I was clearly left with the message that it was American Beacon who had flagged my trade actions while I was using the Fidelity Brokerage
Years ago I worked as a developer for mutual funds transfer agent which handles all these funds trades. The following is a common process: the big shops like VG, Fidelity, Schwab, and others have their own internal transfer agent. Schwab aggregate each day PER EACH FUND all the buy and sell orders as ONE trade. This means DHEIX sees Schwab as one huge client. Then, after Schwab gets the shares it will separate it by each client/account. DHEIX still knows the names of each client and how many shares each has. In most cases, Schwab is the one who handles short-term and most other stuff. Most private mutual funds don't bother to tell the big shops what to do. This is why I said Fidelity make their own rules.
@Mona: thanks for your post. A number of years back, I got flagged at VG. over a small 4 figure amount. I guess it was more of a warning than anything else . I had recently opened the account. Thanks for mentioning the qualifying amount then selling a bunch of shares. Did you wait the 30,60, or 90 day requirement before selling ? It seems to be some funds require a certain amount be in the account or in will be sold out ? Also before closing one more question. Did you try your buy then turn around & sell with a VG fund or a different fund that they sell ?
Thanks for your time, Derf
Derf, some time ago, I thought SIGIX was THE fund to own and thought it would close for eternity. So, at Vanguard and Schwab, I purchased the minimum to qualify for institutional shares. While I am embarrassed to say, I did in 5 different accounts, including two taxable accounts where I did not want this fund.
Being all accounts had institutional shares and no short term redemption fee, almost immediately, I sold all but 1 share 4 accounts and for good or bad, built a position in the 5th account which is a Roth IRA.
Fast forward. Today, I have SIGIX in the Roth IRA with Schwab, 1 share in my Schwab One account and 1 share in a Vanguard IRA account. I can't give you a good reason why I hold onto the 1 share accounts. Probably just laziness.
Regarding your last question, the only workaround that I was familiar with Vanguard's 30 day "frequent trading policy", was if you sold a Vanguard fund you were able to write a letter of instructions to Vanguard requesting to purchase that same fund within the 30 day period that you sold it. However, August 13, 2019, Vanguard changed their policy, and in fact, broadened it, and now you can't make any purchases or redemptions with a letter of instructions.
Multi-SEMMX,IOFIX,EIXIX,VCFAX,PTIAX,JMUTX,JMSIX. PTIAX(1.1%) continues its momentum which tells me they own higher rates bonds than the rest. JMSIX(0.5%) had a nice week too. IOFIX (0.40%) continues to be the best securitized.
"Cash sub"- DHEAX (0.2%) proved why high IG bonds is important. SEMMX surprisingly lost -0.1.
Bank loans - lost too much and the category is at -2.1% for YTD and similar to HY performance which has a much higher duration.
HY Muni-all the ones I follow lost but GHYAX -1%(bigger loss)...OPTAX only -0.3 and even ST duration NVHAX -0.5%.
For core plus: PINCX 1.8%...BCOIX 1.5%....DODIX only 0.8%...UBISX 1.15%...PTTRX 1.6%
But we also learned last week that funds with low SD for 3 years didn't perform that well exactly when you needed them...IISIX -0.2%...JMUTX -0.2%...PIMIX -0.3%...SSTHX -0.3% While much "riskier" IOFIX with SD = 2.7 performed extremely well YTD=3.2% and one week=0.4%
Thanks for the update. I assume that you pretty much ignore the month or older published portfolios and focus on the NAV performance as a reflection of what the fund is actually buying and selling?
Since the prices of a lot of these bonds and instruments are estimated are you worried that they will all be repriced at once much lower, causing a dramatic drop? Presumably this is what caused the 1% drop in IOFIX last year mentioned in other posts.
@sma3 I do worry about all these lower rated bonds in the securitized category. This is why I de-risk my portfolio staring Feb 27-28 when I sold all my HY Munis + lots of IOFIX. In the last several days I started to cover core plus funds and invested in them too which I haven't done for years. It is difficult to predict the future and how deep it will be.
There is no way for anybody to know exactly what these funds own on any given day unless you are the manager and especially with flexible funds like PIMIX. I just look at M* and the fund site. I follow charts very closely for clues, example: HY Munis are going down since 2/27 while other categories are going up. For me, it's more important than the reasons which could be short term.
Actually, we may see rates going up, who knows. This is not a simple market. At this point, I'm trying to have a bond portfolio that will be OK in all markets and if I can't figure it out I will be in cash and I'm very quick, on Feb 27-28 I was at 80% cash.
I assume the mortgage bonds in IOFIX are less sensitive to the emotions in BB or B rated energy or airline bond markets making IOFIX less variable recently. Liquidity is a real risk in IOFIX although the mangers recognize that and have lines of credit etc prepared they say.
The mangers are much more aware of the problem of the credit markets than we are but how quickly can you turn a 10 or 15 billion dollar fund like JMSIX around? Hopefully they anticipated a lot of this.
Core plus funds and even BND out preformed probably due to their heavy doses of Treasuries.
ZEOIX has dropped almost 1% in the last week or two similar to December 2018. I spoke to them back then and they said that even though the NAV was down due to falling prices of their junk bonds, it would quickly recover because they were confident in their security analysis and none of the bonds would default in the short time left till they matured. Sure enough the NAV quickly came back up
It is probably different if some of these other funds hold longer duration securities.
A quick look at the portfolio's of the funds you mentioned indicate why the price drops today. First, a short look at S&P's bond rating guide:
"AAA" and "AA" (high credit quality) and "A" and "BBB" (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations ("BB," "B," "CCC," etc.) are considered low credit quality, and are commonly referred to as "junk bonds."
Both funds show an overall rating of "BB" rating. Both funds hold about 52% of the portfolio at "BB" (about 20% from my recall) and the reminder in lesser quality bonds.
Corporate bonds in particular, did not fare well today with a -2 thru -2.4% return range. There remains a lot of stress going forward in the ability of companies to be able to service their debt properly.
Multi- PTIAX at 0% was fantastic. VCFAX at -0.3% and IOFIX at -0.4 was not bad when SEMMX was down -0.46. JMUTX+JMSIX -1.3% was another proof why securitized is the best. Second-tier PUCZX at -2.9% and PIMIX is still missing, I guess they are afraid to show the results. PDIIX lost -2.4%. The Pimco guys are not doing well at all.
HY Muni lost about -0.5 to -0.7 but OPTAX just at -0.37
Bank loans - fell sharply. EIFAX -3.1 and SPFLX -2.35
HY lost even more at least at -3% to -4%
"Cash sub" - DHEAX confirmed itself as a great choice for performance and stability with just -0.1
Rates were down dramatically but higher rated bonds(even the index BND) didn't go up. I see it as a problem. The markets are crazy, volatile and without a direction. I did nicely YTD and will start buying when markets tell me what to do.
I sold my 3 funds (huge % in PINCX, smaller % in BCOIX and a small % in IOFIX...I bought PINCX+BCOIX earlier last week) and now at 99% cash. I lost today -0.22% which was a surprise because I thought I will make money.
>> I sold ... PINCX ... BCOIX >> I bought PINCX+BCOIX earlier last week
short-term-trading penalties / fees ?
PAID $49.95 ST for PINCX. Paid nothing for BCOIX. Made thousands I don't pay for buying Inst shares, selling doesn't have any fees. Many times I don't pay for ST penalties either. I have a special arrangement.
At Schwab, you enter the trade and before the "PLACE ORDER" it will tell you DHEIX isn't available - only to institutions. DHEAX-free to buy, min $2500, 90 days early redemption fee at $49.95 JMISX (Inst share)-it's free to buy(unique, not at Fidelity), $100 min, 90 days early fee at $49.95 JMUTX-free to buy, min $2500, 90 days early redemption fee at $49.95
>> I sold ... PINCX ... BCOIX >> I bought PINCX+BCOIX earlier last week
short-term-trading penalties / fees ?
PAID $49.95 ST for PINCX. Paid nothing for BCOIX. Made thousands I don't pay for buying Inst shares, selling doesn't have any fees. Many times I don't pay for ST penalties either. I have a special arrangement.
Unfortunately, I don't see a relief because of the following:
1) Stocks meltdown 2) Interest rates are down but many bond fund categories are down in the last 2 weeks instead of up 3) Since Monday VIX is over 50. Last time it was over 50 happened in 2008-9 4) We can't quantify the coronavirus damage. The market wants/needs a number, any number. The unknown is worse than a specific number.
@FD1000 After whatever happened to yield rising Mon and Tues; yields in gov't issues are moving down today (9am); except I expect corp. bonds to lose price again today in continuing down trend.......too much corp. debt and nasty forward company profits.
We are in a bear market where most categories are down and correlation is up which means higher losses. A one month (chart) shows that GLD + SPY(stocks) + BND(bond index) + PCI(CEF) + PIMIX (Multi) are all in a downtrend. BND+GLD only in a one-week downtrend.
The market is confused, dangerous with no solution or decision and the unknown is very high and why volatility is extreme too.
You can't quantify the coronavirus and that's a problem.
The conclusion: have some CASH/MM.
I went to a high % in cash on Feb 28 and since then I just trade.
On Feb 29 I reported the following: YTD mostly in 2 bond funds investing at a higher % in NHMAX + lower % in IOFIX. Last Thursday, I sold half of NHMAX. On Friday, I sold all of NHMAX + most of IOFIX.
On March 9 I reported: I sold my 3 funds (huge % in PINCX, smaller % in BCOIX and a small % in IOFIX...I bought PINCX+BCOIX earlier last week) and now at 99% cash.
Have we ever had a case where both stocks and bonds are in the toilet at the same time, like this? Even if monthly divs from my bond funds diminish, it's still something to depend on, while we all slide and get nicked and cut along this razor blade Market. How soon will my Fund Managers finally put the cash they're sitting on to use? A time-frame of YEARS to ride out this coming Depression seems likely. I hope it's more like 2 years, not 8, as with The Great Depression. Could this not be a "Greater Depression," given the high-flying valuations, beforehand? Feels like I'm watching the Fall of Icarus.
Hi @Crash. In response to fund managers putting cash to work. I own a fund with ticker symbol CTFAX that moves from bonds to stocks based upon the movement of the S&P 500 Index. Just last week, it went from 15% stocks to 60% stocks. In addition, I've got some other hybrid funds that throttle their equity allocation based upon their manager's call. I went into this mess with a sizeable amount of cash myself (20%) and I have been buying good dividend paying funds as the stock market pulls back. I have bought at the 8%, 13%, 19%, 27% and 29% decline marks. Come next week I'll be putting some more cash to work into CTFAX to play the rebound since it is now equity heavy at 60% and can load more (up to 90%) should the stock market continue to decline. Funds like this are out there you just need a community board like this to learn of them. Take care. Old_Skeet
Below is a link where you can learn more about this fund.
Have we ever had a case where both stocks and bonds are in the toilet at the same time, like this? Even if monthly divs from my bond funds diminish, it's still something to depend on, while we all slide and get nicked and cut along this razor blade Market. How soon will my Fund Managers finally put the cash they're sitting on to use? A time-frame of YEARS to ride out this coming Depression seems likely. I hope it's more like 2 years, not 8, as with The Great Depression. Could this not be a "Greater Depression," given the high-flying valuations, beforehand? Feels like I'm watching the Fall of Icarus.
As corporate debt gets downgraded in days/weeks ahead, fixed income funds/pensions/endowments with mandate to hold only investment quality bonds will be forced to sell, even if the current redemption pressure eases.
Comments
I, like yourself, work through Schwab (I also am with Vanguard). I have had this discussion with my Schwab Pinnacle Representative in Indianapolis. Besides the short term redemption fee that the fund may impose, based on how Schwab processes orders with a fund family, he does not know how the fund would know that it is "you". I gather that if the fund is "small" and it receives a huge order from Schwab, it might trigger something.
I guess an analogy would be purchasing x dollars in a fund to qualify for institutional shares and then turning around and selling a bunch of shares. I have done this countless times with Schwab and Vanguard Brokerage and never heard a peep from either. This seems to support that the fund family did not know. If my representative at Schwab is correct, I wonder how American Beacon knew it was you.
On the related, what I also do not understand is that if for example American Beacon has a short term redemption fee and you are willing to pay it, what is the problem. If they do not have a short term redemption fee, then what is the problem. When I purchase and then sell a Vanguard fund, the trading policies are transparent.
Mona
Also before closing one more question. Did you try your buy then turn around & sell with a VG fund or a different fund that they sell ?
Thanks for your time, Derf
You can't do the following easy trade at Fidelity. Suppose your IRA has $100,500 in PIMIX and you want to buy $100K of JMUTX instead. At Schwab, you enter both trades. At Fidelity, you enter your sell but now you must call a rep. Then, they allow you to buy only 90% of the $100.5K...crazy irritating stuff.
I, like yourself, work through Schwab (I also am with Vanguard). I have had this discussion with my Schwab Pinnacle Representative in Indianapolis. Besides the short term redemption fee that the fund may impose, based on how Schwab processes orders with a fund family, he does not know how the fund would know that it is "you". I gather that if the fund is "small" and it receives a huge order from Schwab, it might trigger something.
I guess an analogy would be purchasing x dollars in a fund to qualify for institutional shares and then turning around and selling a bunch of shares. I have done this countless times with Schwab and Vanguard Brokerage and never heard a peep from either. This seems to support that the fund family did not know. If my representative at Schwab is correct, I wonder how American Beacon knew it was you.
On the related, what I also do not understand is that if for example American Beacon has a short term redemption fee and you are willing to pay it, what is the problem. If they do not have a short term redemption fee, then what is the problem. When I purchase and then sell a Vanguard fund, the trading policies are transparent.
Mona
Mona, I have not experienced the trading warning at Schwab, but I have not traded very often at Schwab. The personal experience I incurred was when I was at Fidelity, and it was Fidelity who contacted me, on behalf of American Beacon, with the warning about frequent trading from American Beacon. I had recently upgraded SPFPX to SPFLX, and I then had made a sell out SPFLX shortly thereafer, and that apparently triggered the warning.
Regarding DHEIX/DHEAX, I have not experienced that personally at Schwab, but I have only owned DHEAX a few months. However, I do recall another poster stating the "Diamond Hill Boys" frowned on his trading frequently in and out of the fund.
I don't understand the dynamics of the interaction between the fund companies and the brokerage companies, but I was clearly left with the message that it was American Beacon who had flagged my trade actions while I was using the Fidelity Brokerage
This is why I said Fidelity make their own rules.
There are several tricks I use not to pay ST fees
https://www.bloomberg.com/news/articles/2020-03-06/credit-market-has-worst-day-in-a-decade-as-virus-fuels-selling?srnd=markets-vp&sref=OzMbRRMQ
Of course after several days of analysis I just added to my positions
Being all accounts had institutional shares and no short term redemption fee, almost immediately, I sold all but 1 share 4 accounts and for good or bad, built a position in the 5th account which is a Roth IRA.
Fast forward. Today, I have SIGIX in the Roth IRA with Schwab, 1 share in my Schwab One account and 1 share in a Vanguard IRA account. I can't give you a good reason why I hold onto the 1 share accounts. Probably just laziness.
Regarding your last question, the only workaround that I was familiar with Vanguard's 30 day "frequent trading policy", was if you sold a Vanguard fund you were able to write a letter of instructions to Vanguard requesting to purchase that same fund within the 30 day period that you sold it. However, August 13, 2019, Vanguard changed their policy, and in fact, broadened it, and now you can't make any purchases or redemptions with a letter of instructions.
Mona
Multi-SEMMX,IOFIX,EIXIX,VCFAX,PTIAX,JMUTX,JMSIX. PTIAX(1.1%) continues its momentum which tells me they own higher rates bonds than the rest. JMSIX(0.5%) had a nice week too. IOFIX (0.40%) continues to be the best securitized.
"Cash sub"- DHEAX (0.2%) proved why high IG bonds is important. SEMMX surprisingly lost -0.1.
Bank loans - lost too much and the category is at -2.1% for YTD and similar to HY performance which has a much higher duration.
HY Muni-all the ones I follow lost but GHYAX -1%(bigger loss)...OPTAX only -0.3 and even ST duration NVHAX -0.5%.
For core plus: PINCX 1.8%...BCOIX 1.5%....DODIX only 0.8%...UBISX 1.15%...PTTRX 1.6%
But we also learned last week that funds with low SD for 3 years didn't perform that well exactly when you needed them...IISIX -0.2%...JMUTX -0.2%...PIMIX -0.3%...SSTHX -0.3% While much "riskier" IOFIX with SD = 2.7 performed extremely well YTD=3.2% and one week=0.4%
Thanks for the update. I assume that you pretty much ignore the month or older published portfolios and focus on the NAV performance as a reflection of what the fund is actually buying and selling?
Since the prices of a lot of these bonds and instruments are estimated are you worried that they will all be repriced at once much lower, causing a dramatic drop? Presumably this is what caused the 1% drop in IOFIX last year mentioned in other posts.
I do worry about all these lower rated bonds in the securitized category. This is why I de-risk my portfolio staring Feb 27-28 when I sold all my HY Munis + lots of IOFIX. In the last several days I started to cover core plus funds and invested in them too which I haven't done for years. It is difficult to predict the future and how deep it will be.
There is no way for anybody to know exactly what these funds own on any given day unless you are the manager and especially with flexible funds like PIMIX. I just look at M* and the fund site. I follow charts very closely for clues, example: HY Munis are going down since 2/27 while other categories are going up. For me, it's more important than the reasons which could be short term.
Actually, we may see rates going up, who knows. This is not a simple market. At this point, I'm trying to have a bond portfolio that will be OK in all markets and if I can't figure it out I will be in cash and I'm very quick, on Feb 27-28 I was at 80% cash.
The mangers are much more aware of the problem of the credit markets than we are but how quickly can you turn a 10 or 15 billion dollar fund like JMSIX around? Hopefully they anticipated a lot of this.
Core plus funds and even BND out preformed probably due to their heavy doses of Treasuries.
ZEOIX has dropped almost 1% in the last week or two similar to December 2018. I spoke to them back then and they said that even though the NAV was down due to falling prices of their junk bonds, it would quickly recover because they were confident in their security analysis and none of the bonds would default in the short time left till they matured. Sure enough the NAV quickly came back up
It is probably different if some of these other funds hold longer duration securities.
A quick look at the portfolio's of the funds you mentioned indicate why the price drops today.
First, a short look at S&P's bond rating guide:
"AAA" and "AA" (high credit quality) and "A" and "BBB" (medium credit quality) are considered investment grade. Credit ratings for bonds below these designations ("BB," "B," "CCC," etc.) are considered low credit quality, and are commonly referred to as "junk bonds."
Both funds show an overall rating of "BB" rating.
Both funds hold about 52% of the portfolio at "BB" (about 20% from my recall) and the reminder in lesser quality bonds.
Corporate bonds in particular, did not fare well today with a -2 thru -2.4% return range. There remains a lot of stress going forward in the ability of companies to be able to service their debt properly.
Regards,
Catch
Multi- PTIAX at 0% was fantastic. VCFAX at -0.3% and IOFIX at -0.4 was not bad when SEMMX was down -0.46. JMUTX+JMSIX -1.3% was another proof why securitized is the best. Second-tier PUCZX at -2.9% and PIMIX is still missing, I guess they are afraid to show the results. PDIIX lost -2.4%. The Pimco guys are not doing well at all.
HY Muni lost about -0.5 to -0.7 but OPTAX just at -0.37
Bank loans - fell sharply. EIFAX -3.1 and SPFLX -2.35
HY lost even more at least at -3% to -4%
"Cash sub" - DHEAX confirmed itself as a great choice for performance and stability with just -0.1
Cose plus - PINCX -0.13...BCOIX -0.4....DODIX -1%(as expected)...USIBX -0.45...BND -0.2...FIJEX -0.95
==========
Rates were down dramatically but higher rated bonds(even the index BND) didn't go up. I see it as a problem. The markets are crazy, volatile and without a direction. I did nicely YTD and will start buying when markets tell me what to do.
I sold my 3 funds (huge % in PINCX, smaller % in BCOIX and a small % in IOFIX...I bought PINCX+BCOIX earlier last week) and now at 99% cash. I lost today -0.22% which was a surprise because I thought I will make money.
>> I bought PINCX+BCOIX earlier last week
short-term-trading penalties / fees ?
I don't pay for buying Inst shares, selling doesn't have any fees. Many times I don't pay for ST penalties either. I have a special arrangement.
DHEIX isn't available - only to institutions.
DHEAX-free to buy, min $2500, 90 days early redemption fee at $49.95
JMISX (Inst share)-it's free to buy(unique, not at Fidelity), $100 min, 90 days early fee at $49.95
JMUTX-free to buy, min $2500, 90 days early redemption fee at $49.95
1) Stocks meltdown
2) Interest rates are down but many bond fund categories are down in the last 2 weeks instead of up
3) Since Monday VIX is over 50. Last time it was over 50 happened in 2008-9
4) We can't quantify the coronavirus damage. The market wants/needs a number, any number. The unknown is worse than a specific number.
After whatever happened to yield rising Mon and Tues; yields in gov't issues are moving down today (9am); except I expect corp. bonds to lose price again today in continuing down trend.......too much corp. debt and nasty forward company profits.
A one month (chart) shows that GLD + SPY(stocks) + BND(bond index) + PCI(CEF) + PIMIX (Multi) are all in a downtrend. BND+GLD only in a one-week downtrend.
The market is confused, dangerous with no solution or decision and the unknown is very high and why volatility is extreme too.
You can't quantify the coronavirus and that's a problem.
The conclusion: have some CASH/MM.
I went to a high % in cash on Feb 28 and since then I just trade.
On Feb 29 I reported the following: YTD mostly in 2 bond funds investing at a higher % in NHMAX + lower % in IOFIX. Last Thursday, I sold half of NHMAX. On Friday, I sold all of NHMAX + most of IOFIX.
On March 9 I reported: I sold my 3 funds (huge % in PINCX, smaller % in BCOIX and a small % in IOFIX...I bought PINCX+BCOIX earlier last week) and now at 99% cash.
Since 2/28 I mostly trade and back to MM.
Below is a link where you can learn more about this fund.
https://www.columbiathreadneedleus.com/investment-products/mutual-funds/Columbia-Thermostat-Fund/Class-A/details/?cusip=197199755&_n=1
Be sure to check out the section about asset allocation updates.
It goes back just a month. What a difference.