mutual fund strategy I dunno if I am even able to describe for you how I've done what I've done. Due to work/career surprises, in one sense, I've always been reacting rather than planning, playing catch-up rather than being even ABLE to be sitting where I want to sit.... But we all live through all sorts of variables. I wouldn't be able to invest at all without being lucky. I've mostly been using inheritance and 403b money.
The 403b is gone, it's now in a Rollover IRA. To reduce tax burden, I have no Roth. I went with Traditional IRA, all the way. In the lowest tax bracket, there's no advantage to paying Uncle Sam NOW rather than later. (Trad. = tax deferred. Roth= pay now, but free-and-clear later, when you claim the money.)
In broad terms, I did a lotta homework, listened to the tv talking heads and read the guys who write on money. Barry Ritholtz is good, and Danielle Park, in Toronto. But along the way, you need to pick-up on the buzzwords and twist-phrases. These tv guests and hosts, and the writers mostly SEPARATE money from anything having to do with ethics. Money can be used for good purposes or it can be a tool to screw others. We're in a dirty game. The very nature of the Market is one-upmanship. Digest that fact, and move on, or else you'll just have to look on from the sidelines...
I became aware of the various niches which together, comprise the Market. I have maintained the KISS Principle. I never went into an investment too complex for me to understand how it worked. Using the information at hand, I created my own Big Picture of what's going on in the Macro sense. But that's just background, not the basis for particular fund choices. I looked and looked and looked at a million fund profiles at Morningstar, starting with those recommended here at MFO.
-Always go "no-load."
-When one particular sector is swooning, that's when to buy-in. I don't mean strange, complex, arcane derivatives. I mean, when the Western World is booming, like S & P, Dow Jones and Germany & England, more than likely, EM bonds will be drooping, so get in THEN.
-Don't try to predict tops and bottoms. You should have a long-term horizon anyhow.
-Babysit, but don't micro-manage your holdings. Watch them ride up and down. Hopefully up, overall. If you hold a fund for, let's say two years, and it has been a "dog" all along, dump it in favor of something else.
-Watch the PROPORTION of your holdings toward one another. Try not to let winners become so big that they become their own source of risk for you. If you have HALF of your stuff in a single fund, a bad day will make you sick to your stomach. But after all, if you're not going to need the money soon and you are generally satisfied with Fund X despite a one-day disaster, don't unload it just on the basis of one bad day.
These days, my biggest holding is in EM Bonds: PREMX. I won't be using the money for at least a couple of years, so I'm still reinvesting the dividends. (That's another thing. You want your money to grow? Re-invest all cap. gains and divs.)
Bonds are inherently less volatile than equities. PREMX never is down more than 3 cents or so in a day. So although it's way too big a portion of my stuff, I can live with it. You'll learn to make these kinds of judgment-calls for yourself, too.
...So, I'm told that I ought to cover these bases: Large Growth, Large Value, Mid-Growth and Value. Foreign. Domestic, safe bonds. Investment Grade FOREIGN bonds. EM bonds. you can find all sorts of categories. DO NOT attempt to cover all these bases using an approach that treats the whole investment process like baking a recipe. You'll NEVER get anywhere by covering all the bases, just in order to cover them all. In my case, here's what I've got covered;
1) Asia dividend-paying equities, bonds and convertibles through MAPIX and MACSX.
2) Asia gov't and corporate bonds through MAINX.
3) EM gov't and corporate bonds including a larger menu of countries through PREMX.
4) Domestic large-caps and bonds through MAPOX.
5) Domestic small-cap via MSCFX.
*I just recently sold PFE Pfizer for a nice profit.
For an amateur, I have become knowledgable enough to be dangerous. Know your limitations. Don't bet the farm on ANY single play. I will make a point here as I finish by specifying just ONE specific fund to stay away from: OAAAX. It carries a big front-end load, and over the last ten years, $10,000 would have today become $8,300.00. I rescued a friend's account from there and put him into TRP. I don't remember ANYONE in here ever offering a NEGATIVE recommendation, but there it is.
'Happy Motoring,' said the old Texaco Tiger...
mutual fund strategy Laugh. Impatient and delirious. OK, I'll bite. I cannot claim to know all about the funds you've listed. Real Estate is doing beautifully, I hear, because it was in the crapper. Nowhere to go but up...And also, BOND funds, particularly EM bonds these days. But hey! I do believe this is a good time to get into equities. The shine on the EM bonds will surely fade soon enough. Unless you want to include "alternatives" like owning physical gold or Art, you have either bonds or stocks. And when interest rates rise---which they must, eventually, equities will do very well for a period of time, as opposed to bonds. ...If you're looking for a white-hot small-companies fund, look at MSCFX. I got in rather early, but could not afford very much, so it's a small position. Anyhow, y-t-d it is on fire. But look, if you get in NOW, you're "chasing performance." Best to wait for a bit of a fall, THEN buy. The fund's been in existence for less than a year, now.
***Best thing is to have a plan, then stick to it. That doesn't mean holding onto funds that turn out to be losers forever. But stick to your strategy, in light of your risk tolerance. And then, needless to say, there are the surprises: like losing a job, divorce, whatever. Then ya just gotta re-evaluate....I see that you own 7 or 8 funds. Some may tell you that you're too concentrated. For me, that would be the limit of what I'd want to be worried about keeping track of.
Stick with no-load funds, and try to buy funds with lower relative Expense Ratios. In my case, what I've done is to pull together a small bunch of non-core funds which will hopefully even-out each other's volatility. That's another thing. Try to avoid volatility.
The EU thing these days is scaring the Markets. It's artificially screwing everything up. Stocks (and bonds?) are not trading on fundamental values lately, they're trading on the latest headlines. I wish it would stop. But this is what makes a Market: if I happen to own stuff that will benefit from a slide in value somewhere else, it's difficult not to enjoy it.
Don't go "chasing performance." If you buy into a hot, rising fund near a top, be prepared to wait a while for it to come back up again, after the inevitable drop. None of these funds have performance histories that run in a straight line.
Well, I hope this doesn't sound condescending. And I hope it's not "old news." Just in case you might find it useful, here's what I own, though not in the proportions to each other that I'd prefer. I got a couple of bets in this list that are way too big, as compared to the size of my other positions. But I certainly am satisfied with my choices:
MAPOX
MSCFX
MAPIX
MAINX
MACSX
PREMX
...OK, then. "Break a leg."
Favorite buy and hold fund? Here's my list of long term equity mutual fund holds:
APPLX
MAPIX
MAPTX
MSMLX
PRPFX
Long term bond fund holds:
LSBRX
PEMDX
Added in 2012:
MFLDX (Likely to be sold when it goes load)
PAUDX
MAINX
CYS
FHY
FCG
IGR (I tend to trade in and out of this)
MOO (I tend to trade in and out of this)
