Talking here about financial markets, not politics - although it's hard to separate the two.
The Sell in May folks still appear to be somewhat out of the market and still waiting for the big correction - and it may still happen. Meanwhile, DJI holds stubbornly above the 18,000 mark - NASDAQ & S&P at similar heights. If today follows past patterns, markets will rally in the morning and than swoon after 2 PM as uncertainty about what the Fed just said begins to dominate the discussion. Would rather that not happen, as green screen is always preferable to red.
The year leading up to the Pres. election historically tends to be pretty good; the year after not so good. My gut (admittedly not a very good predictor) tells me to stay about neutral in outlook. I make few adjustments based on outlook but do juggle the cash level a bit. Neutral is 10%. I sit at 10.65%. Some of the excess cash is related to annual distributions planned for early '17. (Cash held indirectly thru allocation funds is not reflected in stated figure.)
Nice morning in commodities. And they've had a very good year. Oil up. Gold up. Silver soaring this morning (+2%). Yesterday nat gas crossed above $3.00 - a level it hasn't reached in at least a year. Seems to me it was under $2.00 early in the year. And I note with interest that DODBX has been slowly gaining on much revered PRWCX. Both good conservative funds. For the year, DODBX now leads by about 1% - and has narrowed the gap for the 5-year period to just over 1%.
If you don't follow markets or ever make any changes to your passive investments this thread is not for you. I respect that approach. But was wondering what those who take a more hands-on approach are thinking?
Comments
As you know I am an active retail investor who throttles my asset allocation (through a process) from time-to-time based upon how I might be reading the markets plus I also adjust for seasonal strategies along with some known upcoming events (such as the fall elections).
Currently, based upon the markets being richly priced along with the fact we have not yet entered the traditional fall seasonal stock market rally along with the upcoming elections has caused me to await a sizeable pullback before I put any new cash to work. In addition, we could soon face a rising interest rate environment before yearend. Currently, I am about 25% cash, 25% bonds, 30% domestic stocks, 15% foreign stocks and 5% other assets according to a recent Xray analysis of my portfolio. Within cash and of the 25% allocation held, I currently hold 20% in liquid form and my mutual funds are holding the remaining 5%. I am looking for cash within my mutual funds to rise as we approach yearend to meet capital gain distributions plus possible redemption request should the markets pullback and reach correction territory. In addition, my cash position will rise as I collect 3rd & 4th quarter distributions along with yearend mutual fund distributions.
Right now ... there is not much for me to do with my style of investing but to let the markets come to me. If not, then I'll continue as I have and awaiting a good pullback. I am more of an investor and not so much a trader; however, when the markets pullback and become oversold, by my matrix, I'll put some money to work and when they rebound and become richly priced and overbought (by my matrix) I'll sell down my equity allocation parking the sell proceeds in cash, or bonds, while I await the next pullback. Then repeat the process. Some folks call this process rebalancing. I call it throtteling my portfolio's asset allocation within established ranges, of course. Currently, I am heavy in cash, and light in both bonds and stocks from their neutral positions.
Not knowing with any great certainty where the markets are heading I am rocking along with what I call an all weather asset allocation that provides good participation, from my perspective, in the major asset classes of cash, bonds and stocks along with some speciality type assets held classifed by Morningstar as other in their Xray analysis tool.
And, so it goes ...
Old_Skeet
The election? I'm not all too certain we'll even have a "winner" after Nov. 8.
Umm ... PRNEX is up about 20% YTD - Crazy, as the fund's manager in his last (June) report repeated earlier warnings that he believes we're in the early stages of a prolonged multi-year bear market in commodities (which weigh heavily in his fund's holdings). Sounds like even the fund's manager thinks you should sell it. I'm all for truth in advertising. Gotta hand it to T. Rowe.
Might lob off a little more from this fund and raise additional cash.
Regards
A: Higher.
But can't ignore the growing chorus of caution. Some from folks here at MFO like Ed Studzinski. A lot from the folks at T. Rowe Price, including David Giroux of PRWCX. Add Blackrock's Larry Fink lately. Am sure there are many more. I'm not suggesting radical changes to one's plan. Just increased caution.
Have heard a lot of smart people suggesting that Sven's 2-3% appraisal above is about what we can expect going forward for the next decade. I'm not buying that - and expect to do better. But will consider all voices in making decisions - even those I may disagree with.
While I am not on the bearish camp, there is not a whole lot of room for significant growth in stock prices from here given the earning growth has been flat for several quarters. Going forward interest rate is going higher in US while many foreign debts are in zero or negative range. Having said that there is just not much margin to cushion any unforeseen shocks. So I am keeping a long term view on investing and stick to my asset allocation.
Timely reminders for any action on these two M F O admired funds .Both effective at the end of market trading (4:00 p.m. EST) on September 29, 2016
Seafarer Overseas Growth & Income closing
By David Snowball
SEAFARER OVERSEAS GROWTH & INCOME (SFGIX/SIGIX) CLOSING TO NEW INVESTORS
http://www.mutualfundobserver.com/2016/09/seafarer-overseas-growth-income-closing/
Short Press Release from Wasatch
Wasatch International Opportunities Fund to Close to New Investors on September 29, 2016
(September 08, 2016)
Salt Lake City, Utah, September 8, 2016—Effective at the end of market trading (4:00 p.m. EST) on September 29, 2016, the Wasatch International Opportunities Fund (WAIOX/WIIOX) will be closed to new purchases, except purchases by new shareholders purchasing directly from Wasatch Funds, existing shareholders, and current and future clients purchasing through financial advisors and retirement plans with an established position in the Fund.
Contact Information:
Jody Lowe: 414.322.9311 / [email protected]
Steve Rung: 801.415.5523 / [email protected]
https://secure.wasatchfunds.com/News/Article.aspx?a=WAIOX Close 2016
Sold just a bit of WAIOX and ETNHX .Sold some losers,HCOAX,JAZZX.Raised cash to about 12 % level.
Stealing @catch22 quote from March 2015." We continue to play the game, looking over our investment shoulder; and still wondering about the outcome(s). Perhaps summer time will trip the sell lever; but it appears full ahead for now with the equity game, both here and foreign."
Same story today as then,lack of any sustainable growth.
Sweden cuts key interest rate to minus .25%, and the "whys" of it all.....
http://www.mutualfundobserver.com/discuss/discussion/comment/58923/#Comment_58923
@hank said
But can't ignore the growing chorus of caution. Some from folks here at MFO like Ed Studzinski. A lot from the folks at T. Rowe Price, including David Giroux of PRWCX. not suggesting radical changes to one's plan.Just increased caution.
I got into PRWCX just before it's closure,probably influenced by your comments about the fund. Mr David R. Giroux has actually reduced his cash position from 6/30/2016 . Percent of Portfolio in Cash 14.2%
Asset Allocation as of 08/31/2016
Domestic Stock 59.8%
Domestic Bond 22.9%
Cash 8.6%:I see Mr Giroux earned a B.A.,magna cum laude,in finance and political economy from Hillsdale College per M*.Great accomplishment.But here in Wisconsin we think the most accomplished alum of Hillsdale is none other than:
Czesław Bolesław "Chester" Marcol was the placekicker for the Green Bay Packers from 1972 to 1980. He was inducted into the Green Bay Packers Hall of Fame in 1987. Wikipedia
Born: October 24, 1949 (age 66), Opole, Poland
Education: Hillsdale College
Position: Placekicker
Chester Marcol Touchdown Packers Bears September 7, 1980http://www.dailymotion.com/video/x3rdas7
Payden & Rigel Week in Review
Targeting an overnight
interest rate to achieve an inflation rate is the strategy of yore. Using a large balance sheet to target macroeconomic objectives and interest rates
across the yield curve is the new regime.
Equities: The interest rate sensitive Real Estate and Utility sectors benefited the most from the no rate hike after finishing the week as the top performing sectors.
High Yield:
High-yield was firmer this week as investor’s appetite for risk returned and fresh cash flowed into the asset class. New issue was once again the main focus of the week as almost $5.5 billion was priced bringing the post-Labor Day total issuance to over $25 billion as issuers continue to take advantage of strong demand and historically low borrowing costs.
Municipals: Lipper reported a 51st consecutive week of inflows to municipal bond funds, which has helped fuel the rally in 10-year yields down to 1.51% from 2.23% a year ago. Tax-exempt municipals remain very attractive relative to Treasuries, with 10-year muni ratios at 95.15% and 30-year ratios at 98.34%.
https://www.payden.com/weekly/wmu092316.pdf