Any limits per regulation as to how much a single open ended mutual fund can lose in a single day?
I suspect the answer is No. But thought it an interesting question after looking at my watch-list today and noticing that OPGSX, a fund I once owned, fell 14.67% for the day. A big Ouch!. Suspect that's more than most are prepared to lose in a year's time. Gold was off $36 today at last look. Off about $100 since the election.
Nasty stuff to play around with.
FWIW
Comments
Gold, man.
That 14.67% drop is the combined drop over two days. (From my handy dandy calculator)
To put this in perspective, there are just 19 funds in the M* category of equity precious metals. Several of these are purely gold funds. Obviously (from its name alone), OPGSX invests more broadly. There are 10 funds that invest in equities involved in gold and other precious metals. The two top rated funds (4*) of these ten are VGPMX and FGLDX.
While the Vanguard fund did better than Oppenheimer over the past two days (down 10.94%), Invesco was more in line with Oppenheimer. It dropped from an initial price of $4.98 to close at $4.67 on 11/10, and $4.38 today. That's a combined loss of 12.05%.
I'm afraid you may be looking at Yahoo's "daily" performance figures, which are (as I write this) reporting two day drops, not the supposed daily returns.
Another factor - there's a difference between gold funds and gold mining company funds. See, e.g. ETF.com, Commodity ETFs: Gold Miners Vs. Gold
Yahoo Will be right back...
Thank you for your patience.
Our engineers are working quickly to resolve the issue.
Sorry for the misleading info. (I thought a lot of their reporting for my own funds seemed off last night as well.) But yes - gold (and gold funds) are getting hammered this week. Not to dismiss the desirability of some limited exposure to the metal (IMHO), but these types of funds are nothing to play around with.
I'm a long term investor and do not frequently monitor the value of my portfolio. For me, a rough quarterly check serves my purposes with at least one annual,exception. In early December I do check more often as I prepare for my annual mandatory required withdrawal. At that time, my final decision is probably most heavily weighted by a goal to rebalance to my planned asset allocation percentages.
Checking a portfolio too often can be hazardous to the overall health of that portfolio. Sudden downdrafts might encourage an overreaction that does more harm than good. Here is a Link to advice offered by Investors Business Daily:
http://www.investors.com/how-to-invest/investors-corner/biggest-single-day-point-loss-may-signal-time-to-sell/
One common decision criteria recommends selling if a single day drop is the maximum one in the current cycle. Lots of diverse opinions on this controversial subject. Whatever makes you most comfortable that you consistently execute is likely a reasonable tactic.
I fully recognize that many of you are far more attentive to your portfolios then I am. I take advantage of hiring only mutual fund managers who mostly relieve me of that arduous duty.
Best Wishes.
(2) Baloney. Checking your portfolio won't harm it any more than taking your temperature with a thermometer (pick your entry point of choice) will harm your health.
But if you insist on repeating this sanctimonious crap enough times, I'll feel obligated to label any future posts I make with a disclaimer that it is "not intended for (your) reading or consumption."
Sorry if my submittal got under your skin and irritated you. By no means was that my intent. Blame it on my amateur writing style.
My posting purpose this time was to document my investing practice. I surely was not suggesting that anyone else should duplicate that practice. At all times, to each his own.
I just about never post to recommend or reject a specific fund or to advocate an investment approach. Again, I believe in a to each his own approach. Magic investment bullets simply do not exist. If it works today, it may well be a disaster tomorrow.
I consider myself a pedestrian investor with rather pedestrian outcomes. Over a very lengthy timeframe I have evolved (devolved if you prefer) into a more passive mutual fund holder. That's just me.
Whatever makes you a more comfortable and happy investor is terrific. Registering a faulty thermometer reading can indeed be harmful to your health if it encourages you to take imprudent and unnecessary health actions. Bad data can do damage in that limited sense.
Best Wishes.
Can’t read Morningstar’s “analyst ratings” because I don’t subscribe. But they offer a tantalizing opening bit of their write-up for free. Here’s the lead-in from Morningstar’s site …
”A middling Parent Pillar rating and a subpar People Pillar limit Invesco Gold & Special Minerals A to a Morningstar Quantitative Rating of Neutral.”
But when you look at their overall rating for the fund, displayed more prominently at the top of the same page, it shows 5 stars.
This turkey aside, what is it about Morningstar’s methodology that causes a “middling” fund, in their own words, to receive a 5-star rating? Also, if anyone knows, I’d be interested in whether anything about this fund’s management changed after Invesco assumed control of the former Oppenheimer funds? Wondering to what extent those 5 stars represent a legacy from the days when Oppenheimer ran the fund?
ISTM Invesco already had an (inferior) gold fund when they bought out Oppenheimer. Did they essentially “axe” the superior Oppenheimer fund and its management and then apply that name to their own inferior fund - moving the invested assets into it as well?
Morningstar Ratings 101: What You Need to Know
"A 5-star risk rating indicates that a fund has been among the market's top performers in terms of risk-adjusted return over the past three, five, or ten-year period."
Gold-mining has been terrible for B&H and being top performer in category for 3,5,10 years doesn't mean much. * ratings are based on past performance only within the category, and overall * rating is a weighted average of *s for 3, 5, 10 years.
Analyst ratings take into account several factors besides the past performance. However, Analyst ratingsQ are computer-generated and are hard to read or make sense out of. It's NeutralQ here. May be M* can train ChatGPT to do a better job.
@ carew388, I believe SGGDX may be the only PM/miner fund that actually holds gold too, not all equities. I think it holds about 20% of the actual yellow stuff. That will smooth out volatility.
If I were to hold one of these funds it would be SGGDX - but I won't
As G.W. Bush infamously said:
“There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”
And @MikeM: hilarious! Thank you.
Somewhere I heard this fund was more volatile than most but also more profitable. I’ll confess to often reading a forum that’s quite focused on gold / miners. And while I’m strictly an amateur observer there, it appears from what I read that there are stark differences in how different p/c mining companies have fared in recent years. Apparently this relates to the “sporadic” quality of various mines they own. Some have prospered while others have lost tons. Possibly OPGSX is intentionally investing in the under-performers as a longer term play.
I guess it bothers me that M* allows fund houses to post its “4 and 5 star” ratings (I’d imagine in return for compensation) as testimony / advertisement for their funds on their websites and than undermines that very rating in publishing critical reviews for readers willing to fork over additional $$ to see what their analysts really think about a fund. ISTM they’re making $$ on both ends here.
Beyond that, I'm rather skeptical of the value of the parent pillar. That pillar encompasses a variety of attributes, some of which IMHO don't contribute to forecasting accuracy. (I've been meaning to do some more research here and write something up; may still get to it.) Here, the middling rating appears to be because the family's funds are all over the map, not showing many areas of strength.
The weak people pillar comes in part from the computer's assertion that the sole manager, Li, has not yet shown "themself" good at running this strategy. One wonders what a machine "thinks" it needs to recognize good performance beyond a 5* rating from someone who's managed a fund for a quarter century. A great example of why I pay little attention to M*'s 'Q' ratings. Yogi answered this. To complete the details: Invesco merged Invesco Gold & Precious Metals (FGLDX) into Invesco Oppenheimer Gold & Special Minerals Fund (OPGSX), not the other way around, near the end of 2019.
https://www.prnewswire.com/news-releases/invesco-announces-changes-to-its-us-etf-and-mutual-fund-product-lines-300974616.html Fork over money and you still won't get to see what their analysts think about this fund (or many others). You'll just get to see what their computers "think". For the very little that is often worth.
On rare occasions I’ll start tracking a fund’s recent performance (for no good reason). Might be one I own, or just one I know something about from past experience. I’ll hit several sites, including MarketWatch, Fidelity, Morningstar and Google (which pulls up fund performance stats as well). Sometimes others. This morning the M* issue caught my attention. Glad several here could shed more light on my querry.
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@MikeM - I’ll agree GWB looks better and better in hindsight. But he once badly garbled in public the quote you referenced! You might recall another old saying about curing a hangover with “a hair of the dog that bit you.” So maybe you need to indulge again.
ISTM it all depends on how much you have in that investment and how much/if you are hedged..
I'd ask what is the largest drawndown in a week...most flushes seem to take place over 3 days...some Friday night are tougher than others if you get the whammo down in your portfolio and have all weekend to fester on it...
I also remember reading something online where some "limit" what they are willing to risk in the market based on what they earn in 12 or 6 months or 3 months etc...my personal limit is 3 months but likely cause I am so risk adverse?
Good Luck and Good Health to all,
Baseball Fan
Therein lies the problem. How much to hedge and what instruments to use. @BaseballFan had good luck using HSGFX last year I believe. Some use (inverse funds) SPDN or DOG to hedge. I believe investment grade bonds AAA rated @ 10 years or further out might be a useful hedge. The problem with most hedges is they will lose you money during good times. (I haven’t forgotten cash either, which I’m sure some consider a hedge.)
Some articles I’ve read recently have mentioned CCOR as a good hedge against stock market downside. But I remain undecided on that. It does not have a long enough track record IMHO.