Howdy,
No big chit-chat this week; and no buys or sells; as we are awaiting the unknowns from D.C. and how the market big kids react. It appears the bond traders are not too concerned as of yet, as the 30 year Treasury and other issue periods are maintaining; without yields moving to higher numbers. One may suppose that when looking around the globe and concerns of the U.S. debt pile, that the U.S. debt turd pile still smells the best of all the global debt turd piles (the other two best of the bunch would include German and Japanese debt). If you have not been downwind from any type of animal farm, I will assure you that given the choice among cattle, pigs or chickens; turd pile smells do indeed have a scale of best to worse. Such is life, eh?
The portfolio and a M* breakdown are below for your reference.
Take care of you and yours,
Catch
Not pure science numbers with this; but we hold 15 bond funds and equity funds with bond holdings; some being a much larger % of total holdings than others...but here are some rough numbers for combined yields:
---5 HY/HI funds avg. yield = 7.4%
---10 mixed/multi sector funds avg. yield = 4.5%
---All 15 bond funds avg. yield = 5.5%
The immediate below % of holdings are only determined by a "fund" name, the M* breaddown is at the end of this write; and a bit more realtistic, although with flaws, too.
CASH = 14.6%
Mixed bond funds = 78%
Equity funds = 7.4%
-Investment grade bond funds 12.2%
-Diversified bond funds 18.5%
-HY/HI bond funds 28.4%
-Total bond funds 14.6%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 7.4%
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 Fed High Income
DIHYX TransAmerica HY
DHOAX Delaware HY (front load waived)
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FSAVX Fidelity Select Auto
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
CAMAX Cambiar Aggressive Value
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
.......MORNINGSTAR PORTFOLIO VIEW below.......
Asset Class %
Cash 12.28
U.S. Stock 13.12
Foreign Stock 4.05
Bond 62.97
Other 7.58
Not Classified 0.00
Stock Style %
Large Value 11.01
Large Core 14.47
Large Growth 29.64
Mid-Cap Value 12.57
Mid-Cap Core 7.75
Mid-Cap Growth 7.60
Small Value 6.78
Small Core 4.67
Small Growth 5.40
Not Classified 0.10
Stock Sector Portfolio %
Cyclical 68.79
Basic Materials 5.51
Consumer Cyclical 58.36
Financial Services 2.89
Real Estate 2.03
Defensive 9.54
Consumer Defensive 5.51
Healthcare 3.75
Utilities 0.27
Sensitive 21.67
Communication Services 2.57
Energy 7.45
Industrials 3.59
Technology 8.06
Not Classified 0.00
Stock Type Portfolio % VS S&P 500
High Yield 0.11 0.23
Distressed 3.57 0.67
Hard Assets 6.91 13.29
Cyclical 69.64 43.93
Slow Growth 5.14 14.80
Classic Growth 0.75 6.73
Aggressive Growth 5.52 16.15
Speculative Growth 0.87 1.98
Not Classified 7.50 2.22
Fees & Expenses Average Mutual Fund Expense Ratio (%) 0.75
World Regions %
North America 61.02
UK/Western Europe 4.20
Japan 0.87
Latin America 2.33
Asia ex-Japan 1.83
Other 0.30
Not Classified 29.45 (AAARRRGGGHHH !!!!!)
Stock Stats Average for This Portfolio Relative to S&P 500 (1.00=S&P)
Price/Earnings Forward 14.46 1.03
Price/Book Ratio 2.14 1.02
Return on Asset (ROA) 7.74 0.91
Return on Equity (ROE) 18.47 0.88
Project Earnings Growth-5 Yr (%) 12.77 1.29
Yield (%) 4.38 2.58
Avg Market Capitalization ($ mil) 10,260.29 0.20
Bond Style %
High-Quality Short-Term 0.00
High-Quality Intermed-Term 0.00
High-Quality Long-Term 0.00
Medium-Quality Short-Term 3.53
Medium-Quality Intermed-Term 14.77
Medium-Quality Long-Term 0.00
Low-Quality Short-Term 16.10
Low-Quality Intermed-Term 33.45
Low-Quality Long-Term 5.28
Not Classified 26.88 (AAARRRGGGHHH !!!!!)
Comments
Up against two long time board favorites which fall into the conservative/balanced/go anywhere category, you lag only fractionally: OAKBX is at 5.48% and PRWCX is at 5.42%. Neither likely holds near 15% cash as you do which may account for the difference. T. Rowe Price is known as one of the smartest for allocation decisions. You easily trump all of their retirement funds. Here's a few with YTD performance:
TRRIX Retirement Income 4.13
TRRFX Retirement 2005 4.41
TRRGX Retirment 2015 4.63
TRRBX Retirement 2020 4.68
TRRCX Retirement 2030 4.86
TRRDX Retirement 2040 4.82
Some additional T Rowe Price funds for comparison:
RPIBX International Bond 5.48
PRHYX High Yield Fund 5.01
PRULX Long Term Treasury 4.28
PRWBX Short Term Bond 1.46
RPSIX Spectrum Income 4.05
You must find following 26 funds challenging. I typically hold 12-15, not counting money market, and that seems frustratingly high. BTW, what are the provisions for owning TEGBX load free? I ask because our old work place plan was with Templeton/Franklin Templeton and we paid a onerous 4%. I commend you for these outstanding returns. My own pale in comparison being consistent with my benchmark, TRRIX. (Actually I'm lagging them by 0.10%, but, than again, they are the professionals.) Take care.
You had invested in FSLVX by mistake when you really wanted to invest in FDVLX. I think you are out of your holding period and can get out penalty free and if you use Fidelity website the transaction is very easy to do. I wonder why you decided to hold it for longer term.
Last week I was down 1.2% ... YTD I am up 5.5%. In comparison, the Lipper Balanced Index is up 4.5%. My portfolio's summertime base allocation is 20% cash, 25% income, 50% equity, within equity 60% domestic, 40% foreign, and 5% other. My portfolio's yield is North of 5%. As such, I can accuru to cash 1.25% per quarter, reinvest, or take dissbursement of same.
I have been buying a little in the S&P Index based upon valuation just for kicks and grins mind you, a short term spiff investment.
My Market Gagues ... Investor Sentiment Poll Readings, Bullish 45%, Neutral 30%, Bearish 25% ... Market Valuation, Current P/E Ratio 13.3 Bullish by my math and the market about three to four percent undervalued by Morningstar ... Moving Average Trend Analysis, Short Term 10 DMA, Bearish (making a turn south), Intermediate Term 65DMA, Bearish (slight decent), Long Term 200 DMA, Bulish ... and, so-on and so-forth. It's a mixed bag.
The focus next week will be on earnings, the continued battle about US debt ceiling will likly be the headline news and throw in some unforseen events form the European debt circus and you have a lot of uncertainity. Should an agreement be reached in regards to the US Debt ceiling, look for a relief rally. My best guess is that it will be short lived until we get into fall past the quadruple withching of September.
And so it goes ...
Have a Good Week and Good Investing,
Skeeter
Howdy hank, Thank you for your gracious comment; and you are to be commended, too; for your efforts.
I'll do the "you wrote" and >>>>> for a reply.
"Catch, in the past you have billed as a "conservative/capital preservation" approach.
>>>>>I feel the holdings are fairly conservative; although a very large batch of HY/HI income is very subject to credit quality/risk and equity market moves; but generally at a slower face slap, which would hopefully buy some time for an unload.
I must ask, your knowing that we have about a 45% exposure to HY/HI bonds as to whether our holdings, in your eyes; are more than conservative? I would appreciate your viewpoint.
"The "turd quality" reference makes me wonder if your goals and methodology have changed?
>>>>>Our goals or methods have not changed; and the "turd quality" is related more to the chat about the U.S. debt and the hugh amount of Treasury issues that are floating around. However, there are many more issues of debt around the globe that have a much worse odor than here, and regardless of the debt talks and the circus in D.C.; if there is safe hiding to take place from market conditions, I feel U.S. Treasury issues would still have priority for many small and large investors.
"I post to provide hope to those conservative fund investors who like myself lag your sterling performance this year. They should not be dismayed if they fall short.
>>>>>Ah, the beauty part of FA and now MFO. To allow all of us to swish around the thoughts that are written here. With enough time the smallest phrase or just one work may be of great value in the future as one adds to knowledge, which may in turn become intuitive knowledge for investing decisions. Not unlike having tried 50 restaurants, 3 or 4 times each and soon enough one may have an intuitive/memory list of the proper future choices.
"Up against two long time board favorites which fall into the conservative/balanced/go anywhere category, you lag only fractionally: OAKBX is at 5.48% and PRWCX is at 5.42%. Neither likely holds near 15% cash as you do which may account for the difference. T. Rowe Price is known as one of the smartest for allocation decisions. You easily trump all of their retirement funds. Here's a few with YTD performance:
TRRIX Retirement Income 4.13
TRRFX Retirement 2005 4.41
TRRGX Retirment 2015 4.63
TRRBX Retirement 2020 4.68
TRRCX Retirement 2030 4.86
TRRDX Retirement 2040 4.82
Some additional T Rowe Price funds for comparison:
RPIBX International Bond 5.48
PRHYX High Yield Fund 5.01
PRULX Long Term Treasury 4.28
PRWBX Short Term Bond 1.46
RPSIX Spectrum Income 4.05
>>>>>When I moved monies in late January of this year, I noted to my wife that I felt that whatever was not placed into truly active investments at the time would be "PIMCO'd"; meaning the cash not used would be placed into our easiest access to a non-cash acct at Fido and that would have been FINPX. TIPS, a very common pseudo cash place for Pimco funds. Our cash to use for other funds has always been parked in some type of fairly stable bond fund. Well, obviously; while watching the markets this spring and early summer, this did not happen; and I regret the waiting. Add to the list of investment missteps, eh??? Now, we watch and wait on D.C. for the bigger plan...:)
"You must find following 26 funds challenging. I typically hold 12-15, not counting money market, and that seems frustratingly high. BTW, what are the provisions for owning TEGBX load free? I ask because our old work place plan was with Templeton/Franklin Templeton and we paid a onerous 4%. I commend you for these outstanding returns. My own pale in comparison being consistent with my benchmark, TRRIX. (Actually I'm lagging them by 0.10%, but, than again, they are the professionals.) Take care.
>>>>>Following the funds is not too bad. I have a "pretend" portfolio set at Google and view it each evening looking for trends or common moves. I also watch several ETF's to give a feel for sector movements. Example: If the HY/HI funds/sectors really start to look ill; then I would likely start to reduce holdings of all similar funds.
TEGBX is a choice in a 403B acct set up through an insurance company (ARGH !)...not our preference, but there is no fixing that. I checked again today to assure my brain cells and the load is waived and the total internal fee of the fund to us is .79%. 'Course these type of funds via insurance companies are for their use to the customer; but are pretty much twins to the product offered to the outside/retail investor and the returns have very small variances.
And hats off to you for your efforts. We all may have a 5% or 25% year....tricky boating so far.
Take care of you and yours....and, hey; go jump in the lake, eh? Stay cool !
Catch
Hi Investor,
Hey, your memory cells are in excellent working order.
I/we do appreciate your reminder of the holding period.
Take care down there,
Catch
Hi Skeeter,
Always nice to read your view and thoughts of the markets, and hats off to you with your returns. I've peeked at a few charts in the spare moments of time and appears there are not many clear directions set at this time; with the exception of the "always" few sectors that are moving more than others.
We sure are having just way too much fun with our money, eh ???
Take care of you and yours,
Catch
Hi Skeeter,
Always nice to read your take of the markets, and hats off to you with your returns.
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My viewpoint is that it's very hard to assess ths risk profile of anyone's holdings, yours or mine, but will attempt to shine a little light. One approach is to look at worst and best years for a given asset class. The J.P. Morgan Global High Yield Index was down 26.8% in 2008 and than up 58.9% in 2009. In hindsight, for the fella who bailed at the bottom this asset class was very risky. For the stalwart who hung on another year, not so risky.
http://berylconsulting.com/de/content/beryl-credit-pulse-high-yield-corporates-march-2010
Terms like "conservative" "risky" "safe" have different meanings to different folk. Bnath in a recent thread considered OAKBX too risky, even years from retirement. But there's also risk in cash equivalents and short term bonds because they won't keep pace with inflation. For help we might look to some of the fund literature. I'm most familiar with Price and believe they generally do a good job communicating. Spectrum Income, RPSIX, appeals to folks that want a diversified income portfolio without taking a lot of risk. I'd link the bar graph for this fund but can't get link to work. Anyway, Price places Spectrum Income about midway between "low risk and "moderate" on a risk spectrum.
Spectrum Income's last annual report, December 30, 2010 lists the funds in which it invests. At the time of publication, High Yield Bond comprised 19.6%, Emerging Markets Bond 7.9%, Equity and Income Fund (stocks) 13.8%. All 3 totaled a bit over 41%. Remaining 50% or so was in investment grade bond funds or cash.
This glimpse into one fund and how its managers try to assess risk may be of help.
Sorry, can't get links to the risk assessment bar or fund report to work. Gremlins.
hank
Hi Maurice,
Thank you for the thoughts. I have planned, but not gotten around to a small write related to how real people, like us here; view their portfolio or another's portfolio in this aspect of conservative-aggressive. The base of such a discussion should or may be between what has been established by the investment industry over the years as related to the risk/reward ratio in real historical terms; and most and perhaps more important, the psychological aspect of what one conjures in their own mind as to what is or is not a conservative versus any other type of investment. One may already presume some of the areas of individual thought that would shape the reasons for a particular answer.
Ok, gotta run; and do a few chores before the outside weather/temps get to the danger zone.
Take care,
Catch
Would it be too much extra trouble for you to include the percentage of EACH fund to your total Portfolio. Your category breakdown is very useful, but I assume you don't divide each fund within each category equally, so it would be great to see how much you favor one fund in a category over another. Every bit of extra information helps my learning process, but I completely understand if this request is asking too much extra of your time.
I also agree that 50% holding in high yield is too risky in a retirement portfolio. After all high yield bonds correlate strongly to equities comparing to treasury or investment quality bonds. In this low yield environment it is difficult to obtain sufficient income from dividend alone.