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Mutual funds ... who is adding to positions

edited July 2018 in Fund Discussions
Ok. Let's talk about mutual funds in the narrowest of ways. Considering the age of the bull market, where we are in the interest rate cycle, where I am i am in my own life cycle and political risk I am finding it increasingly difficult to add new money to my fund positions. For me,,,, political risk is the wild card or the Joker, if I can say that here on the Teddy board. Who else considers political risk to be inhibiting new investment?
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Comments

  • I have been moving large cap funds to asset allocation funds such as PRWCX. The increased allocation to utilities is appropriate in this phase of the bull market. A new addition is Vanguard Multi-factor ETF, VFMF which is an all-caps fund. At presence I am not willing to add to emerging market since I believe the worst has yet to arrive when the tariff takes hold. I having been building CD ladder with our large cash position.
  • edited July 2018
    @larryB,

    Not much has changed since my last barometer report. It is linked below in case you missed the post.

    https://www.mutualfundobserver.com/discuss/discussion/42056/old-skeet-s-market-barometer-report-june-recap#latest
  • Thanks for sharing gentlemen. My CD sleeve has grown perhaps too large though I count it as F.I. The self induced trade war and other self induced shocks have turned this conservative investor even more risk adverse. The biggest risk to my investments remains Orangeman and his BFF Vlad.
  • edited July 2018
    larryB said:

    Who else considers political risk to be inhibiting new investment?

    For one, Henry Ellenbogen, highly successful fund manager at T. Rowe Price, who listed political risk as his chief concern in the Barron’s Mid-Year Roundtable published July 16. In specific Ellenbogen (who easily outdistanced the 8 other participants with his January picks) cautioned that he thinks the Democrats will take control of the House after the mid-terms and that the already serious political strife (which occasionally surfaces on this board) will intensify sharply and the results will be felt in the markets. Not sure, but I think he sees a paralysis of sorts preventing any meaningful fiscal / economic reform. Yes, it is very much affecting his decision making - making him more cautious. I think it’s fair to say most of the other 8 participants more or less concurred - but in less conspicuous fashion. The Trump initiated trade wars was another problem area a number mentioned. Unfortunately @Ted who “linked” the article wasn’t - as far as I know - able to do so in a way that was accessible to anyone else. (I read it in print.)

    Myself? I’ve been looking for a year for some pocket of deep value (a depressed area) where I might speculate a bit and grab off an easy gain. Nothing. Everything looks pricy. Recently I moved some $$ from DODLX (global bond) into PREMX (emerging market bond). The former is ahead about 1.5% over the past year while the latter is off 2-3% over that time. Go with the percentages and figure over the next year or so that relative performance will invert. But, nothing big there - looking at very small advantage over a couple years. And yes, I do think this political mess will get worse before it gets better and there will be a price to be paid by investors. But exactly when, how, and what? Dunno.

    Added: Gold’s off substantially over the past couple months (from around $1300 to around $1200). I consider it too risky to speculate in so have avoided the temptation to buy (more than I already own). Could go a lot lower. But for someone looking for an entry point (small allocation) this might not be a bad time.
  • Interesting in that for my kids who are at the beginning of excellent careers massive disruptions to the markets would spell opportunity. For their old man,,, sequence of risk danger.
  • I continue to add small increments monthly to PRIDX, and it's paying off--- though I'm buying into a rising fund. PREMX is replaced by RPIHX TRP Global Junk Bonds. At this point in my own life, I want a decent monthly dividend, getting ready and waiting waiting waiting and wanting pretty desperately to get out of the fecal hole which my city has become. In all sorts of ways.... And PTIAX is new for me. I'll be growing that. Otherwise, PRWCX and MAPOX are my 2 biggest holdings. The PRWCX is about double the size of the other. I am keenly aware of the political crap. PRIDX is well positioned, I think, geographically.
  • @larryB, increasing the CD ladder with respect to rate hike is the right to do. There are two more rate hikes to come this year. Inflation is already here as consumer products including cars, home appliances, electronics are getting more expensive. It is okay to hold large cash in uncertain time.

    @hank, Henry Ellenbogen is solid manager and I agree with his sentiment on today's environment. Even though the TRP New Horizon is way ahead of the mid-cap growth funds, he is still cautious which is good. Like you, I did not find any deep value opportunities except for emerging markets but I think better buying opportunities is ahead as the tariff take hold.
  • edited July 2018
    @Sven. Agree completely.

    The EM stocks aren’t off enough where I’d wade in. Even the bonds are a gamble - but I like the income they kick out. Suspect the hit in the miners may be affecting some of these economies (ie Latin America) and if gold moves up it will help. I maintain a static weighting to international bonds all the time anyway - so in this case just went a bit more aggressive.
  • I am adding to DSEEX (small amounts) every chance I get, dip or no dip, as I compared newish etfs like VALQ, QARP, QLC, QDEF, others, with CAPE, which I do with every new LCV (or even tangentially related) idea, saw no advantage, and figured why not?
    Bought PCI and PRSNX (hope this latter is not a mistake) with proceeds from PDI and PTY sales. As ever, looking for genuine diversification.
    Debating whether to move one of my children (nontrivial amount) into FCPGX (missed latest runup), thoughts welcome.

  • I re-established my position in PRBLX as the core for my Roth today. Now that they sold WFC I like the fund again, and will be redeploying my TWEIX proceeds into it over the near future. It is paired with POGRX to give a growthy slant to my Roth, to offset the significant single position in LCV RWMGX in my 403(b).
  • @davidmoran, DSEEX is doing well this year and pays out a small monthly dividend. The European equivalent CAPE fund is doing quite as well since it is not hedged to USD.

    My long held MAINX is lagging badly this year as the dollar strengthened. Still like this fund better than emerging market bonds and those in local currencies. I have been following PCI but it is trading at a premium so I will wait.

    I would advise against chasing the better performing asset - certainly not in one lump sum. If need to be, consider buying in dips over a 3-6 months period. Cash is still a viable option since money market is paying close to 2%.
  • edited July 2018
    @Sven,

    Where do you get ~2% for mm? not disputing, just curious.

    Yes, DLEUX has been most disappointing. I will bail at first breakeven, I think.

    I am reconsidering PRBLX.

    >> been following PCI but it is trading at a premium

    ? Help me understand what I am missing here:

    https://www.morningstar.com/cefs/xnys/pci/quote.html
  • Still 80 20 at 401k..
  • @davidmoran. 2.05% at vanguard m.m. vmmxx
  • Like @larryB, yes, political risk is keeping my equity stake lower (around 60%) than it usually is for me. The business cycle is a magnificent thing, and we should be at a good stage for equities, but I spent most of my adult life in Brazil, and political instability can really throw a wrench in the works.

    If the Ds take at least one house of Congress, as I hope and expect, I think the subpoena power is going to pull up a whole lot of dirt on DJT, and we're heading to a constitutional crisis which the markets are going to detest. I personally believe Mueller will also serve up the goods, sooner rather than later, and that DJT will not go quietly.

    So I've been building cash and adding to bonds funds that I consider conservative (OSTIX, RPHYX).
  • Continuing to DCA into PRGTX.
  • Put more in some ETF's, VIOG and VONG.
    Put more in FOCPX, and PRHSX.
    Closed out MAINX, took 1/5 out of TCMPX.
    I'm trying to get simpler.
  • edited July 2018
    I'm continuously adding and selling so not sure it counts. I took some profits in VMVFX, AUXFX, and slew of Artisan funds earlier in the year. I've added some back.

    Then I sold of funds at TDA (ulcer alert) to get ready for closing account. Waited 30 days and bought some again, e.g. ICMAX elsewhere. TGDLX sold at loss, waiting for 30 days to decide whether to buy again. Dollar rising...

    As a general rule in sell mode for International funds, and buy mode for MidCap. My 401k is mostly invested at this time. Been buying last few days based on my models. Departed from index funds a bit and bought a little of "value" instead. For instance, DODGX and TRMCX. On the growth side, TRLGX, PRDMX.

    Bottom fishing international and emerging markets right now. In 401k might move some of Large Cap into these. The dollar needs to fall though.
  • rforno said:


    I re-established my position in PRBLX as the core for my Roth today. Now that they sold WFC I like the fund again, and will be redeploying my TWEIX proceeds into it over the near future. It is paired with POGRX to give a growthy slant to my Roth, to offset the significant single position in LCV RWMGX in my 403(b).

    Thanks for this info. I had stayed away from Parnassus because of WFC position. However, what is their position on selling? Because WFC doing bad stuff, or just because it is bad stock?

  • As I recall they discussed their reasons for selling WFC in a recent commentary/report but I can't remember which one. ;/ I forgot what their explanation was for selling it after holding it for so long DURING the various scandals in recent years, though.....IMO they should've dumped it much sooner than they did. I think they finally got fed up with the company's various questionable practices.

    rforno said:


    I re-established my position in PRBLX as the core for my Roth today. Now that they sold WFC I like the fund again, and will be redeploying my TWEIX proceeds into it over the near future. It is paired with POGRX to give a growthy slant to my Roth, to offset the significant single position in LCV RWMGX in my 403(b).

    Thanks for this info. I had stayed away from Parnassus because of WFC position. However, what is their position on selling? Because WFC doing bad stuff, or just because it is bad stock?
  • Still in the accumulation phase, so continuing to plow $ in. Mostly SC and international lately. More worried about what ifs like the implosion of an Apple, Amazon or Google than political foibles de jour.
  • Initiated position in APFDX (same team as ARTRX) and re-entered CAPE when price seemed favorable in late June. Sold final slice of long-term holding WSVIX recently as I believe better options exist in small value/blend (FTHNX, for example). Sold DBC and MOTI, the latter for under-performance. Already out of EM for a while and not looking to add yet.
  • I’ve reduced my stock allocations from about 60% to 50% over the past month, primarily due to political concerns such as the trade war and immigration crackdown. My view is that these issues will cause more inflation, leading to even more interest rate increases. I’ve also changed my fixed income allocation, shifting a higher percentage from traditional bond funds to assets that hopefully will hold up better to inflation and rates increases— such as ultrashort bond funds, floaters, CDs and stable value in 401K.
  • @joe74, what SC? I am enchanted w virtus (growth, I think) at the moment, since the good fido ones are closed....
  • @davidmoran,
    larryB beat me to it. Vanguard Prime money market offers 2.05% yield. Ultra-low ER allows for higher yield.

    Last time I checked PCI the discount was less than 1% - not so attractive. As I recalled from Sam Lee who was a Morningstar analyst, he recommended to buy PCI only the discount is in double digits since the CEF is 40% leveraged. Any loss will magnify the leverage.
  • The last couple days I think PCI has crossed to the premium side, per M* graph, while PDI has an alltime high premium of 10% and PTY has remained near its alltime premium high >17%, which seems astounding. So while they are not comparable in many respects PCI looked like a better bet.

    I wonder what its future holds, as it has outperformed (say) FAGIX just amazingly the last 5.5y over about any interval within you choose.

    But note also the smart fundalarm's post of last fall:

    CEF wrapper is dependent on VIX. As volatility is subdued, CEFs trade on fundamentals (based on NAV performance) and some investor sentiment (discount/premia). With quiet VIX and outstanding NAV performance, pimco (and other) CEFs attracted more and more new investor money. When VIX spikes, the fundamentals (NAV) become less relevant, and investor psychology dominates trading and discounts widen.
  • @davidrmoran, I have PRNHX in IRA and VTMSX in taxable.

  • @MFO Members: Sticking with the funds I brought to the dance, MSOPX, TRBCX, IVV, QQQ, and PONCX. Why wouldn't I, TRBCX, MSOPX, QQQ are up over 15% YTD.
    Regards,
    Ted
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