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!
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)
Also toying with playing the option premium game via Robinhood.
Best wishes to all for safe and healthy holidays!!
I pretty much got it where I want it. Looking forward to hearing others’ plans.
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.”
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.
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.
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.
Really part of rebalancing as our equity stake had risen higher than desired.
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.
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!
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.
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.
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
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.
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.
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.
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.
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?
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.