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What moves are you considering for 2022?

I am going a bit more defensive for the new year and currently evaluating several funds that fit that theme including JENSX, MSFAX and CDC. Also considering FMSDX. My main concern is what will perform well in a rising interest rate environment. JENSX in particular performed well during the last rate normalization period from 2016-2018 and also has a strong long term record. Would love to hear what the whole crew is considering. Happy holidays to you all!


  • edited December 2021
    Recent activities? I been watching capital gains distributions and its' been a wild ride in the markets as well. I put 10% of my 401k into ASDVX for near term yield instead of earning 'zilch' in a Money Market Fund. Recently purchased TRAIX as part of the new TRP Summit Program...put 10% of my Rollover in that fund. I have added DSCPX to my small cap allocation...

    Other moves I'm considering and would like some feedback on...May sell LBSAX and buy SCHD. .90 bps difference in ER and SCHD has beaten LBSAX on YTD, 1, 3, 5, and 10 year time periods. I also like Schwab's new offering, SCHY, because not many investors allocate to Int'l Value or they don't speak about that style often. The style has been challenged long term as has US Value (until recently)

  • No major moves for me. Considering starting a position in SVARX and increasing position in SWAN.

    Also toying with playing the option premium game via Robinhood.
  • @MikeW: I think CDC could work. I evaluated it and COWZ and decided on the latter. LCV with solid dividends. I also moved some growth money to SVFAX as I believe Bill Smead is a great value manager. For SCG, I'm sticking with DVSMX and adding NEAIX/NEAGX.

    Best wishes to all for safe and healthy holidays!!
  • edited December 2021

    I pretty much got it where I want it. Looking forward to hearing others’ plans.
  • @hank...withdrawals look challenging...thanks for sharing.
  • Just moved a hefty chunk of VTSAX and VDADX to VUSFX to take some gains off the table for 2022. I continue to work with a 33-36% stock allocation range, but am considering a reduction to 30-33%.
  • edited December 2021
    bee said:

    @hank... “ withdrawals look challenging …”

    @bee - Distributions are always a challenge. I attempt to do just 1 every year. But it does require pulling roughly equal amounts (percentage wise) from 4 different sleeves - plus applying the correct % to a number of subsets inside each sleeve. Work it out on paper before I start moving the boulders.:) Sometimes get tripped up by the deferred NTF (60-day) holding period at Fido - one reason I’ve shifted more to ETFs since moving there.

    Many here use allocation models - some more complex than mine - so they probably encounter similar issues on withdrawal. FWIW - I actually did the repositioning for 2022 a few months ago - parking that sum in cash inside the tax deferred accounts. So, when the new year arrives, it won’t require any juggling.

    PS - To try to remain topical here … my final move for 2021 was to sell a bit less than half of my TMSRX and move that into QED - an ETF that attempts to track an “event-driven” hedge fund index. I had previously stated I’d never sell TMSRX. But after reviewing recent literature at TRP’s website, I became convinced they really do plan simply on besting the return of short term treasury bonds - using a 3-month T-Bill Index as the fund’s benchmark. Knew that all along - but had expected they’d operate the fund a little more aggressively than they appear to be doing. As a substitute for bond holdings, I still see its merit.

    TMSRX Benchmark - “ICE Bank of America (BofA) Merrill Lynch U.S. 3-Month Treasury Bill Index.”
  • edited December 2021
    @MikeW: JENSX is one of my favorite stock funds, on the short list. It's quality just about on steroids. Wasn't aware of MSFAX, and it deserves a deep dive. Thanks for bringing it up.

    I'm in mostly retired/don't need much out of the portfolio/low stock mode, usually with a large chunk of the port in structured credit -- but that asset class has slowed to a crawl lately, and I'm thinking more quality equity and an allocation fund or two are in my near future. PRBLX and PORTX are a couple of funds I own now in very small amounts that I may add to.
  • @hank
    Thank you for the balancing pictorial. A "Zen" moment of the mind; but a tough balance to build in the real world. A bit like attempting to build a balanced portfolio, in an ever-changing dynamic investing world.

    Remain curious,
  • @hank: as you know, I let TMSRX go. I just took a look at the fund's allocation stats on M* and I am a bit perplexed. If the PMs are really holding 59% in cash with a 10% short position on US equities, it's no wonder the thing acts like a MMF. They cannot be doing what they did in 2019 and 2020. Thanks for finding that benchmark which helps explain what has been going on.
  • edited December 2021
    @hank, love the balance of forces image. You have some interesting physics concepts gong on there. Takes me back to the many college physics courses I had. I also like your input on TMSRX. I did purchase that fund as a bond alternative but maybe expected more. Maybe expected too much. It's still a keeper for me but I may have over-played the expectation and the amount I allocated to it.

    I don't expect to change overall equity percentage much from 2021. My self-managed portfolio has been about 50% equity. I have been adjusting that balancing act though like hank's image. I've had about 30% in 3 balanced funds for years, mostly PRWCX, and plan to stay at that ratio. My biggest change for 2022 will be to go with a higher percentage of alt-funds, 3 of them equally weighted at 8-10% each. They are TMSRX which I've reduced and JHQAX, CTFAX which I have been increasing. The choices we have for alt-funds is of course many, but I think these 3 are all different enough to work well together. All, fingers crossed here, should hedge an equity bear which is my intent. I also have held ETF's, DBC (a commodity basket) and IAU (gold) at about 10% combined as an inflation hedge. I don't plan a change there.

    Thanks for starting the post @MikeW. Always interesting to hear others ideas. Good investing to all in 2022.
  • Roy
    edited December 2021
    Recently reduced our equity % by around 5%. Did so by selling shares from an all-equity fund and added to TRAIX and our holdings in PRFRX.

    Really part of rebalancing as our equity stake had risen higher than desired.
  • edited December 2021
    I'll review my portfolio next weekend.
    Bonds comprised 24% of my holdings a few months ago.
    My portfolio will be rebalanced to slightly increase bond (and possibly "cash") exposure.
    Reducing equity risk is a goal since I plan to retire in a few years.
    I'm also contemplating replacing an existing fund in my Roth IRA with either PRILX or SCHD.
  • It currently looks like my overall portfolio stock % per Fido will be about 65% after my once a year cash distribution has been completed at the start of 2022 (vs. about 67% in stocks at the start of 2021).

    A couple of OEF updates. The Bond sleeve now includes SVARX, RCTIX, PEGAX, and ARTUX (a very new OEF with experienced managers). And, the Mixed Asset #1 portfolio sleeve has been partially updated -- holdings here are selected based on a combination of anticipated overall returns and anticipated volatility during significant market corrections. That sleeve now includes VWINX, BGHIX, PRSIX, and SUNBX (another very new OEF with experienced managers that I'm guessing makes sense to include in this sleeve.)

    I don't know if it means anything. But, the total distributions from my OEF holdings were up substantially in 2021 -- perhaps as a result of OEF manager activity this year resulting from a combination of market anxiety and exuberance. The last similar annual uptick in my distributions was in 2007. And, 2008 turned out to be an eventful year!

  • We will focus more on the balanced fund bucket in 2022 since we had hard time with our bonds this year. In order to fight inflation, the Fed has announced tapering in early 2022 following by several (3) rate hike from 0.25% short term rate. Which asset classes will do well in rising rate environment?

    This year we are fortunate to have a modest gain above the inflation rate, and that is good enough for us. The balanced funds we used as a lower risk approach have provided steady gain throughout the year and would like to expand further globally. Several defensive ETFs as tactical allocation including health care, REIT, and energy have paid off. Rotation from growth to value domestic and international funds have been worked well. Our small alternatives and gold positions did not contribute much but that is okay. The main challenage we had is bonds - high quality government and corporate bonds lagged badly to those of junk bonds. So we will rely on the balanced fund managers to pick the bonds instead.
  • edited December 2021
    I believe that 2022 will end higher than 2021 concludes, but it certainly won't be a smooth ride. It should be volatile during the first half of the year particularly.

    With only a few exceptions, none of my year-end OEF distributions were reinvested. In early January I plan to trim 25% from a few individual stocks which ran up nicely the past 2 or 3 years. I plan to put the sum of these dollars into NVHAX, FRA and FRFZX, and then when the FED moves and the market vomits in response, I'll move that into a few holdings geared towards increasing my dividend income to include RQI, BME, EVT, DIVO, FLC, JPS and possibly ETNHX to make up for a down 2021. Other than floaters and preferreds, I have no conventional bond funds.
  • @PRESSmUP, you must hold a sizable cash position since you are not holding any conventional bond funds? Can the other positions generate adequate income?
  • It’s been mainly value for me with a bit of growth just to participate and scratch the itch. 2020 was a fun ride for tech, but I left it in Sept and spent the majority of time in DODGX through my 401k and some other value based funds in a couple IRAs - MXXVX, PARWX, DHPAX, LZFOX. I have had some GPGCX and recently decided to load up on GPGEX as my main world stock fund. I don’t see another wild tech rally for a while outside from some IPOs in the next year that keep up their sales numbers.
  • @gmarceau : By loaded up ,from your post, more than 5% of your portfolio ?
    I bought a toe hold , less than 1% of my portfolio in GPGEX. It's nice to get in on the ground floor, but some worthy question have been ask about this new addition by the MFO community . The limited AUM was good news to hear.

    Enjoy the ride, Derf
  • @Sven portfolio consists of 10% cash and FI holdings, 21% equity OEFs, and the balance being individual stock holdings along with CEFs and 2 ETFs (SCHD and DIVO). That last portion generates divi's of 4.5%. That, plus prudent fund profit taking generates sufficient cash for me.

    I understand that bonds are (were) effective ballast, but I think a few high quality healthcare or utility stocks (or even banks) serve the same function. That bull market in bonds we had for the past 30 years was pretty nice, but I see nothing conservative in bond purchases at present.
  • @PRESSmUP, Thanks you for the clarification and how you managed the FI part. It is great that you can get that high dividend yields from SCHD and DIVO. I also use healthcare and utility in ETFs to generate some income with the understanding of incurring additional volatility.

    I agree that bonds will face considerable headwind going forward while the FED will rise rates in order to fight off inflation. So far 3 hikes are forecasted in 2022. Also investors need to concern about how the tapering will effect the bonds. The stock market is no longer the same with government being part of it with all that QEs.
  • edited December 2021
  • PRWCX CTFAX as buy and hold ESGV JEPI SCHD DSTL to buy/sell as needed RPHYX for paltry income, VARAX BAMBX CVSIX HMEAX ADANX ARBOX at Fido/Schwab. My Vanguard funds are all buy and holds. I have no problem holding numerous funds, since the alternative is earning 1 basis point !
  • I suspect we are now beyond the 2020 crash rebound period, and I think we will have to accommodate more rising interest rate impact. I don't have strong predictions about particular funds, but I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.
  • edited December 2021
    dtconroe said:

    ... I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.

    Hi dt, it's happening as we type. IOFIX has slowed quite a bit in December, and Pimco even cited non-agency mortgage weakness as a negative impact on the Pimco Income nav in the latest monthly report. Also, munis have ~ flatlined in this historically positive time.

    The stakes in my port in allocation and alt funds are slowly heading up.

    Good luck with the next round of investing decisions.

    P.S. Good commentary from Junkster on IOFIX.
  • dtconroe said:

    I suspect we are now beyond the 2020 crash rebound period, and I think we will have to accommodate more rising interest rate impact. I don't have strong predictions about particular funds, but I am expecting bond oefs like IOFIX will come back down to earth and have more "normal" returns.

    Today’s 3 cent gain continued a recent pattern of outsized gains one to two trading days before ex dividend date. This is the reverse of the pattern in effect prior to 2020. Their portfolio is trading around 96 cents on the dollar up considerably from the 60 to 80 cents since 2017. So I agree its best days are behind it and thinking 2022 may only see a 4% to 5% total return. Hopefully I am dead wrong. Can’t think of many or any bond fund that had such a stellar return this year. The managers feel the fund has another 25% to 30% before the legacy non agencies play is over. I would probably cut those numbers in half if only because fund managers in general tend to be overly optimistic. Sure has been a unique and special bond fund over the years and if one was able to sidestep the carnage in March 2020 and return the following month.

  • AndyJ: "Also, munis have ~ flatlined in this historically positive time."

    Yep, HY Munis are not as compelling in this period as I have seen in the past. I have a chunk of money invested in this category, but the rewards so far have been tepid. I will re-evaluate my HY Muni holdings after the end of the month.

  • OP started conversation mentioning JENSX and I did not have that on my watch list. I have been watching PRBLX but struggling with moving funds from FXAIX to another “blend”. I’m trying to scale back a little on growth and have funds from sale of MSEGX. Looking for thoughts on these two blends. Already own PARWX and plenty of FDGRX.

    JENSX looks pretty impressive BUT… MFO screening - it has the lowest rating of all funds mentioned above over multiple time periods and is the lone one not a Great Owl. Perhaps it’s a Lipper category issue?
  • edited December 2021
    JENSX looks good on the surface but I haven't thoroughly investigated this fund.
    I like and own PRILX.
    The fund generated top quintile returns for the 3 Yr, 5 Yr, 10 Yr, and 15 Yr periods ending 11/30/21.
    PRILX also tends to have lower maximum drawdowns than its competitors.
    Two long-tenured managers (one is CEO, one is CIO) have invested over $1M each into the fund.
    Here's a PDF touting the performance of Parnassus Core Equity Fund.
  • edited December 2021
    Thanks @Observant1 - I seem to always appreciate and admire your choices and feedback on funds. Eye opening graph in that PDF you shared… volatility vs S&P during crisis.
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