FYI: U.S. stocks fell Friday on global growth worries, but major indexes were still poised to close the week with modest gains after a strong kickoff to corporate earnings season.
The Dow Jones Industrial Average dropped 255 points, or 0.95%, in afternoon trading, dragged down by Boeing and Johnson & Johnson. The S&P fell 0.39%, while the Nasdaq Composite declined .83%.
Are three indexes are within 4% of all-time highs reached this summer, showing the resilience of the U.S. stock market despite concerns about slowing growth at home and abroad.
Friday’s declines came after fresh Chinese growth data sparked concerns about the world’s No. 2 economy and a slew of negative headlines pummeled some of the biggest U.S. companies.
Among Friday’s movers, Johnson & Johnson slumped 4.7% after the company said it was recalling a single lot of baby powder after tests found small amounts of chrysotile asbestos. Boeing tumbled 3.5% after Reuters reported that the aircraft maker’s employees may have misled regulators over the safety of the 737 Max.
Technology stocks were broadly lower, with Netflix down 6% after several analysts cut their price targets for the streaming-video company. Chipmaker Micron Technology tumbled 4.4%, while Microsoft fell 1.7%.
But the S&P was still poised for a 0.5% increase for the week--its second consecutive week of gains--largely due to upbeat quarterly earnings reports, including from banks like JPMorgan Chase and Citigroup.
Of the 73 companies in the S&P 500 that have reported earnings through Friday morning, more than four-fifths have topped analysts’ expectations, according to Refinitiv. That’s largely because expectations came down so much in recent months.
Coca-Cola, United Airlines Holdings and health-insurance giant UnitedHealth Group are among the stocks that rallied this week on better-than-expected results.
Overseas, Chinese stocks dropped sharply after data showed the Chinese the economy slowed further in the third quarter. The benchmark Shanghai Composite Index fell 1.3%, its biggest decline in a month.
Fresh data showed that China’s economy grew 6% in the quarter as business activity continued to deteriorate. Each quarterly slowdown in Chinese growth has pulled the country’s economic performance to new lows not seen since the current measure of output was adopted in 1992.
The benchmark Stoxx Europe 600 fell 0.3%. In the U.K., the FTSE 100 dropped 0.4% and the pound climbed 0.4% against the dollar.
Investors are watching developments closely before U.K. lawmakers vote Saturday on a draft Brexit agreement struck with the European Union. Prime Minister Boris Johnson is trying to muster enough support for the deal in the U.K. Parliament.
The yield on U.S. 10-year Treasurys fell to 1.741% from 1.757% on Thursday. Bond yields move in the opposite direction from prices.
In commodities, U.S. crude futures fell 0.6% to $53.59 a barrel. Gold futures slipped 0.2%.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-18/your-evening-briefing
MarketWatch:
https://www.marketwatch.com/story/stock-index-futures-struggle-for-direction-after-weak-china-growth-2019-10-18/print
WSJ:
https://www.wsj.com/articles/chinese-stocks-slide-after-economic-growth-cools-11571389552
Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-17/asia-stocks-set-for-mixed-open-before-china-data-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/stock-market-bad-day-continues-these-two-stocks-took-down-the-dow/
CNBC:
https://www.cnbc.com/2019/10/18/stock-market-wall-street-in-focus-amid-corporate-earnings.html
Reuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-pressured-by-jj-global-growth-concerns-idUKKBN1WX1FV
U.K:
https://uk.reuters.com/article/uk-britain-stocks/ftse-feels-ihgs-pain-amid-caution-ahead-of-brexit-vote-idUKKBN1WX0QO
Europe:
https://www.reuters.com/article/us-europe-stocks/string-of-weak-earnings-leave-european-stocks-barely-up-on-the-week-idUSKBN1WX0PS
Asia:
https://www.cnbc.com/2019/10/18/asia-markets-october-18-china-gdp-brexit-oil-and-currencies.html
Bonds:
https://www.cnbc.com/2019/10/18/treasury-yields-tick-higher-as-investors-digest-china-data-brexit-developments.html
Currencies:
https://www.cnbc.com/2019/10/18/forex-markets-brexit-deal-chinas-economy-in-focus.html
Oil
https://www.cnbc.com/2019/10/18/gold-markets-brexit-deal-in-focus.html
Gold:
https://www.cnbc.com/2019/10/18/gold-markets-brexit-deal-in-focus.html
Current Futures:
https://finviz.com/futures.ashx

Surely you're not suggesting that 3M does most of its mining and manufacturing in Minnesota, or that US Bank does most of its lending to midwest businesses. I might grant you midwesterners consume a lot of processed meats (Hormel). But enough of this Spam :-)
Mairs and Power says that it invests in (local) companies it knows about. That's an argument for investing in global funds where the managers live abroad (close to the companies they invest in), not for investing in companies that do business close to home.
Counter example to regional investing: FKCGX, formerly Franklin California Growth Fund. One would think that California would be a broad enough market that a fund could easily limit its investments to that state. (Franklin is based in San Mateo, Calif nearly midway between San Francisco and Silicon Valley, and a stone's throw from Oracle.)
But it first dropped its 80% California requirement to 50%:

It has been a policy of the Franklin California Growth Fund, under normal market conditions, to invest at least 80% of its net assets in equity securities of California companies. Effective September 1, 2002, Franklin California Growth Fund will change its name to "Franklin Flex Cap Growth Fund" and will eliminate the 80% investment policy. ... [replacement strategy] The Fund normally invests a majority of its assets in California companies

Apparently that wasn't "flex"ible enough.

Effective October 1, 2004, the section "Goal and Strategies" ... is replaced with the following: ...
Under normal market conditions, the Fund invests primarily in equity securities of companies that the manager believes have the potential for capital appreciation. The Fund has the flexibility to invest in companies located, headquartered, or operating inside and outside the United States, across the entire market capitalization spectrum from small, emerging growth companies to well-established, large-cap companies.

The successor fund was merged into FGRAX in August 2016.

1999 NYTImes feature on FKCGX. Like Mairs and Power, emphasizing knowledge of companies near where the managers are:

Call it the home-team advantage.
"We're able to keep close tabs on our investments," said Conrad B. Herrmann, lead manager of the $1.58 billion Franklin California Growth fund, which focuses on California companies. "We read local newspapers in California and socialize and interact with people who might be employed in the companies in our universe."

FYI: The S&P 500 rose Thursday, stoked by solid earnings reports from Netflix, Morgan Stanley and others, as well as a preliminary Brexit deal that has the potential to remove a major obstacle facing investors.
More than a tenth of the companies in the S&P 500 have reported results so far and numbers are mostly coming in ahead of analysts’ expectations. That gave the stock market some support a day after weak retail sales data raised concerns that a major component of the economy, American consumers, were slowing their spending.
Investor sentiment in the U.S. and Europe also got a boost after U.K. and European Union negotiators reached an agreement on a new Brexit deal. However, mounting concerns about U.K. lawmakers’ support for the accord tempered the market’s reaction and led to some reversals.
Shares of health-care providers also resumed their rally after The Wall Street Journal reported Tuesday that several of them, including McKesson and Cardinal Health, would pay $18 billion to settle opioid litigation. 28
That combination pushed two-thirds of the stocks in the S&P 500 up on Thursday, giving the broad index a 0.28% gain.
The Nasdaq Composite also rose, adding 0.40%. The Dow Jones Industrial Average, meanwhile, hung onto a small gain, rising 0.09%, or 23 points, to 27025 despite a pullback in shares of International Business Machines. The Dow component weighed on the blue-chip index after reporting lackluster earnings a day earlier.
Among the biggest gainers, shares of Netflix climbed 3.1% after the online video-streaming service posted solid earnings late Wednesday and expanded its subscriber base domestically and abroad, although growth fell short of its own target.
Morgan Stanley added 2% after it handily topped analysts’ profit forecasts.
Dover also notched a big gain, rising 5.3% after the industrial conglomerate raised the low end of its guidance and reported better-than-expected quarterly profits and revenue.
Meanwhile, Cardinal Health added 4.2%, while McKesson shares rose 3.8%. They are up 8.9% and 12%, respectively, for the week.
Of the 64 companies in the S&P 500 to post results so far, 52 have topped estimates, according to FactSet. Companies have a lower bar to beat, however, after analysts cut profit estimates in recent months. They lowered expectations across all 11 sectors of the S&P 500 to account for waning global growth and the U.S.’s prolonged trade fight with China.
The companies in the index are still on track to report a 4.7% decline in profits from a year earlier, the biggest profit pullback of the year, according to FactSet.
In Europe, assets ranging from the British pound and the euro to European stocks initially surged on the draft Brexit deal. But most of those assets gave up their gains following signs the deal will face some opposition in the U.K. Parliament.
The pound fluctuated between gains and losses against the dollar and was recently up 0.2%. The U.K.’s FTSE 250 index, a gauge that includes local companies with significant domestic operations, pared back gains to 0.2%. The broader Stoxx 600 closed down 0.1%.
Regards,
Ted
MarketWatch:
https://www.marketwatch.com/story/stock-futures-point-higher-after-uk-eu-strike-tentative-brexit-deal-2019-10-17/print
WSJ:
https://www.wsj.com/articles/pound-dips-as-brexit-talks-hit-a-roadblock-11571303767
Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-16/asia-stock-futures-mixed-treasuries-advance-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-led-by-unitedhealth-walgreens-ibm-earnings-weigh/
CNBC:
https://www.cnbc.com/2019/10/17/stock-market-economic-data-trade-war-fears-in-focus-on-wall-street.html
Reuters:
https://www.reuters.com/article/us-usa-stocks/wall-street-edges-higher-on-robust-earnings-brexit-deal-idUSKBN1WW1MV
U.K:
https://www.reuters.com/article/us-europe-stocks/tempered-brexit-hopes-drag-european-stocks-into-red-idUSKBN1WW0SB
Europe:
https://www.reuters.com/article/us-europe-stocks/tempered-brexit-hopes-drag-european-stocks-into-red-idUSKBN1WW0SB
Asia:
https://www.cnbc.com/2019/10/17/asia-markets-economic-data-brexit-negotiations-trade-war.html
Bonds:
https://www.cnbc.com/2019/10/17/us-bonds-traders-monitor-economic-data-trade-concerns.html
Currencies:
https://www.cnbc.com/2019/10/17/sterling-soars-to-five-month-high-as-brexit-deal-is-agreed.html
Oil
https://www.cnbc.com/2019/10/17/oil-markets-us-oil-inventories-in-focus.html
Gold:
https://www.cnbc.com/2019/10/17/gold-markets-us-economic-data-in-focus.html
Current Futures:
https://finviz.com/futures.ashx

Ignore the swings if you're a longterm investor. Volatility is a natural part of the markets and is not necessarily something to be feared. Going nuts at every wiggle, even a short-term violent one, is a recipe for disaster. If anything, embrace the volatility to accumulate shares that go 'on sale' or get so overpriced you can lock in more profits and reposition things if you like.
Folks freaking out about every market spike/drop are probably the same folks who expect to get a participation ribbon just for being in the market and expect the very fact of that participation to result in immediate gains. IMO the past 12 years artificially-induced and sustained 'bull' market conditioned folks that there is only one direction that markets can ever go, which is disturbing.
Speaking of Seykota, don't forget his 'Whipsaw Song' -- which I still play now and then. :)

FYI: Six investment experts highlight promising areas to deploy cash.
Regards,
Ted
https://www.bloomberg.com/features/how-to-invest-10k/?srnd=etfs

I tend to agree with Terri Spath on junk bonds although my conviction isn't very high. Their allure is if stocks rise more than expected because of a strong economy that should be favorable for junk. If instead stocks tank, 10 year rates should fall also making junk attractive as an income generator. I am buying an inconsequential amount of a junk fund today (5%). and add if necessary.
Edit: Unlike this year, I worry that 2020 may be a real challenging year for bond investors. Hope I am wrong.

History may make me look foolish but I don't think the market will be in serious trouble unless and until its clear that Trump will leave office which seems unlikely in the next 6 months. Since you are conservative I would go with 25% oakbx 60% the capital preservation fund and 15% the PIMCO fund or other fund you think looks best.
You will surely be following Buffett's advice
Rule 1 Don't lose money
Rule 2 Don't forget rule 1
remember that even when conservative your retirement account should provide a real return (i.e beat inflation)
I think my suggestion will meet that goal and I hope your desired future investments will do that.

Shadow must be taking the day off :-)
https://www.sec.gov/Archives/edgar/data/915802/000139834419017760/fp0046737_497.htm
The fund just reopened a year ago. I wonder if it will reconsider that decision now.
https://mutualfundobserver.com/discuss/discussion/45333/seafarer-capital-partners-announces-reopening-of-seafarer-overseas-growth-and-income-fund
https://www.seafarerfunds.com/message-to-shareholders/2018/11/13/
Fund tickers: SFGIX (closed), SIGIX (open, $25K min)

I am retiring at end of March, 2020. Fund choices in workplace 401 are few. I am slowly exiting existing positions in order to preserve principal. Once I retire I will move monies somewhere where my options are more suitable for a someone in retirement. My question is, Which funds of my 401 choices would you leave money in the next 6 months.
AMRMX, VFINX, VIGRX, OAKBX, OAKIX, FSCCX, VMVAX, PTTRX, ODMAX and a preservation trust fund.

Nice day in the markets as of 3 PM. Oil’s also up a couple % along with big gains for stocks. Gold holding its own - off about $10. Politicians of all stripes like to “play” the markets where they can. Often they try to get the inevitable recession “out of the way” early in the first term of their President (either party). The perfectly normal tendency to want to game the markets is the reason Congress in its wisdom created an independent Fed and sought to insulate it as much as possible from political interference.
Back to investing ... Note that today’s current DJA at near 27,000 isn’t that far above the 26,617 reached in early 2018. A lot of this year’s gain is simply retracing the steep losses which occurred later in 2018.
Records Highs Set in 2018
“The Dow hit three 1,000-point milestones in 2018.
It hit two of them in the first few weeks in January. It closed above 25,000 on January 4, and it breached 26,000 on January 17. The index set 15 closing records in 2018.
The records set in the fall were the first ones since the Dow reached 26,616.71 on January 26, 2018. After hitting that peak, the Dow went into free fall, dropping 4% the next week.
On February 8, it entered a market correction when it fell 1,032.89 points to 23,860.46.
On August 27, 2018, the Dow ended a six-month correction when it reached 26,049.64, which was 10% above its closing low of 25,533.20, reached on March 23.”
From The Balance.com
https://www.bing.com/search?q=2018+U.+S.+market+highest+average+reached+dow+s&p&go=Search&qs=n&form=QBRE&sp=-1&pq=2018+u.+s.+market+highe&sc=0-23&sk=&cvid=5BE2D3B980CC4BFBBD8CC0F49A32C4DD

Even 2.5 to 3% on the 10 year in 2020 would be quite low by historic standards. I just don't see what might cause rates to move substantially further than that to the upside in the near future.

Hi @Junkster
I remain in the "this time is still different" crowd.
Couple of items with this.
Watching the interest rate calls from 2011 or there about from the big houses. They all had and still have a hell of a time getting used to things these days.
Aside from all of the trade and political turmoil; I have kept trying to weigh big house thoughts and actions on market directions.
There are many possibilities, of course; but I try to place these next pieces together for today (meaning the last 8 years to date). Not in any order:
1. machine trading
2. large houses, and their traders and technicians not thinking this time is different and continue to have adjustment difficulties.
3. technology in the work place and EVERYWHERE
4. the large group of baby boomers and the affects they have in so many market sectors, from consumption or not, down sizing everything, which includes shifts in housing and what type
5. perhaps some folks buying too much expense items with low interest rates on loans.
6. Everything else..... a longer list to be sure
Add to the list if you choose.
Below is the German 10 year bond set for PRICE. This chart defaults at 3 months, but click on the other time frames just above the chart to follow pricing from earlier periods to date.
The reason for the look here, although very narrow and set to one country; is an attempt to discover when yields travel to 0 and below, as to what happens to the PRICE, i.e.; anyone buying?
My thoughts being that there is a point where one can no longer obtain a profit from PRICE gains and obviously no gain above inflation from the yield. Coming to the point of when is it no longer of consequence to invest in bonds of some form or other.
Help me with this thinking, as needed; your insight to this is appreciated.
10 yr German bond PRICE
Pillow time here.
Catch

Can’t offer any special insights. If the crowd is right and this time it is different and rates are headed towards zero that will buoy bonds that offer a higher yield such as junk, non agencies, emerging markets, and more. I remarked the other day that from a contrarian point of view at some point over the next year rates will be higher on the 10 year in the 2,50 to 3% range. I hope that isn’t the case but it would not surprise me at all. Stocks would also be much higher and confound all those thinking a recession is at our doorsteps. You are thinking more based on fundamentals while I am thinking more based on sentiment and the counterintuitive nature of the markets.

Hi @Junkster
I remain in the "this time is still different" crowd.
Couple of items with this.
Watching the interest rate calls from 2011 or there about from the big houses. They all had and still have a hell of a time getting used to things these days.
Aside from all of the trade and political turmoil; I have kept trying to weigh big house thoughts and actions on market directions.
There are many possibilities, of course; but I try to place these next pieces together for today (meaning the last 8 years to date). Not in any order:
1. machine trading
2. large houses, and their traders and technicians not thinking this time is different and continue to have adjustment difficulties.
3. technology in the work place and EVERYWHERE
4. the large group of baby boomers and the affects they have in so many market sectors, from consumption or not, down sizing everything, which includes shifts in housing and what type
5. perhaps some folks buying too much expense items with low interest rates on loans.
6. Everything else..... a longer list to be sure
Add to the list if you choose.
Below is the German 10 year bond set for PRICE. This chart defaults at 3 months, but click on the other time frames just above the chart to follow pricing from earlier periods to date.
The reason for the look here, although very narrow and set to one country; is an attempt to discover when yields travel to 0 and below, as to what happens to the PRICE, i.e.; anyone buying?
My thoughts being that there is a point where one can no longer obtain a profit from PRICE gains and obviously no gain above inflation from the yield. Coming to the point of when is it no longer of consequence to invest in bonds of some form or other.
Help me with this thinking, as needed; your insight to this is appreciated.
10 yr German bond PRICE
Pillow time here.
Catch

FYI: U.S. stocks rallied Thursday after President Trump said he would meet with a key Chinese official for talks Friday, the latest example of trade hopes boosting global markets.
The Dow Jones Industrial Average rose 150points, or 0.57%, to 26496, after earlier climbing more than 250 points. The S&P 500 added 0.64%. The broad equity gauge entered the session down nearly 2% so far in October and roughly 3.5% below July’s record, though it was still up 16% for the year. The tech-laden Nasdaq Composite advanced 0.60%.
The gains came after Mr. Trump said on Twitter that he would meet with Chinese Vice Premier Liu He, the head of the Chinese negotiating team, at the White House Friday, contradicting earlier media reports that Chinese leaders would be leaving Washington Thursday, a day earlier than expected.
Thursday’s moves were the latest example of trade-induced volatility in markets. Global indexes and stock futures swung between gains and losses overnight on conflicting reports. Fears that the U.S. and China won’t reach a ceasefire on tariffs have led to projections that a global economic slowdown will ripple to consumers, denting spending and crimping corporate profits.
Negotiations continued Thursday after the White House signed off on special licenses for some U.S. companies to do business with Chinese telecom giant Huawei Technologies Co., a possible sign of goodwill. At the same time, the U.S. adding 28 Chinese entities to an export blacklist earlier in the week also prompted caution among investors.
Trade hopes also boosted commodities crucial to transportation and manufacturing by easing worries that softening demand will result in supply gluts. Both copper and oil rallied nearly 2%, trimming some of their recent losses.
Earlier in the week, figures showed that prices businesses receive fell unexpectedly in September from the previous month.
Treasury yields rose following the data Thursday, with the yield on the benchmark 10-year U.S. Treasury note rising to 1.651%, according to Tradeweb, from 1.585% a day earlier. Yields have fallen in recent months as investors have sought safety in bonds.
Among individual stocks, shares of Delta Air Lines slid 2% after the company’s quarterly results added to concerns about rising carrier costs. Third-quarter reporting season for large companies begins in earnest next week, with S&P 500 firms expected to post a drop in profits from a year earlier.
Bed Bath & Beyond soared 21% after the struggling retailer tapped Target’s Mark Tritton as its next chief executive.
And PG&E tumbled nearly 30% after the judge presiding over its bankruptcy handed shareholders a loss, opening the door to a competition over the best path out of bankruptcy that pits the troubled utility against bondholders led by Elliott Management Corp.
Elsewhere, the Stoxx Europe 600 climbed 0.6%. In Asia, the Shanghai Composite Index gained 0.8%, while Japan’s Nikkei 225 rose 0.4%.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-11/your-evening-briefing
MarketWatch:
https://www.marketwatch.com/story/us-stock-index-futures-drift-lower-as-beijing-washington-tariff-talks-take-focus-2019-10-10/print
WSJ:
https://www.wsj.com/articles/u-s-stock-futures-slip-as-concerns-about-trade-talks-mount-11570697193
Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-09/asian-stocks-set-to-rise-on-trade-talk-optimism-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-today-moves-higher-as-trump-tweets-plan-for-trade-talks/
CNBC:
https://www.cnbc.com/2019/10/09/us-futures-drop-after-chinese-media-reports-that-us-and-china-have-made-no-progress-in-trade-talks.html
Reuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-rises-on-hopes-of-u-s-china-trade-deal-idUSKBN1WP1QB
U.K:
https://uk.reuters.com/article/uk-britain-stocks/recharged-hopes-of-brexit-deal-trade-truce-power-uk-shares-idUKKBN1WP1QX
Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-rise-on-brexit-trade-deal-hopes-lvmh-shines-idUSKBN1WP0ST
Asia:
https://www.cnbc.com/2019/10/10/asia-stocks-october-10-us-china-trade-talks-oil-currencies.html
Bonds:
https://www.cnbc.com/2019/10/10/bonds-treasury-yields-in-focus-as-investors-await-us-china-trade-talks.html
Currencies:
https://www.cnbc.com/2019/10/10/brexit-uk-and-irish-leaders-say-there-is-a-pathway-to-a-possible-deal.html
Oil
https://www.cnbc.com/2019/10/10/oil-markets-us-china-trade-talks-in-focus.html
Gold:
https://www.cnbc.com/2019/10/10/gold-markets-us-china-trade-talks-in-focus.html
Current Futures:
https://finviz.com/futures.ashx

Schwab index funds are cheaper than VG.

Expense ratios are just one part of the equation.
On the cost side there are tax costs. When you buy an OEF share class of a Vanguard fund you benefit from the fund's ability to dump any cap gains via the fund's ETF share class.
Vanguard 2018 YE distributions (no cap gains for index funds, except institutional funds that have no ETF class shares)
Schwab 2018 YE distributions (see p. 3)
On the revenue side, there's security lending. "Consistent with Vanguard’s client-owned structure, Vanguard returns all net lending revenues—after subtracting program costs, agent fees (on non-U.S. securities), and any broker rebates—to the funds."
https://personal.vanguard.com/pdf/ISGSL.pdf
As it turns out, Schwab has a similar policy. But unlike Vanguard, with Schwab would you be confident of that without checking?
https://www.schwabfunds.com/public/file/P-7549969
The point is that there is much more going on than is reflected in ERs. Relatively speaking a basis point one way or the other is just noise. How much tracking accuracy will the fund trade off for better pricing? DFA does this so extensively that it says its funds are actively managed, albeit indexed. Full replication vs. sampling; quality of sampling methodology. And so on.

How long can a bad fund look good? Consider HSGFX
Inception July 2000
“During the 2000-02 bear market the Hussman’s fund posted phenomenal performance by sidestepping most of the carnage and posting gains.”
https://awealthofcommonsense.com/2014/02/curious-case-john-hussman-understanding-biases-process/

FYI: Being a multiple—and repeat—winner isn’t a new experience for Joe Hudepohl.
As the youngest member of the U.S. swimming team at the 1992 Olympics in Barcelona, Mr. Hudepohl earned gold and bronze medals in the 100- and 200-meter freestyle relays. Four years later, he won another gold in Atlanta.
In similar fashion, Mr. Hudepohl just captured the “silver” and “bronze” medals in the latest round of The Wall Street Journal’s quarterly Winners’ Circle ranking of top mutual-fund managers. And this is the second consecutive round in which Mr. Hudepohl finished near the top of the rankings.
The gold medalists for the latest round are the co-managers of Akre Focus Fund (AKRIX), Charles “Chuck” Akre and John Neff. The I share class of their fund finished the quarter with a 12-month return of 20%. This year marks the 30th anniversary of Mr. Akre’s founding of his eponymous firm, Akre Capital Management, and the 10th anniversary of Mr. Neff’s arrival to join the team.
Regards,
Ted
https://www.wsj.com/articles/a-silver-medalfor-stock-picking-this-time-11570414320
M* Snapshot EAALX:
https://www.morningstar.com/funds/xnas/eaalx/quote

I always enjoy reading Dr. Madell's perspectives.
Because of possible downdrafts in the stock market Old_Skeet, now retired, carries more cash than perhaps most. There are several reason for this. They are 1) it provides me an additional safety net should I need additional cash for unexpected expenses where I don't have to sell securities in a down market and 2) it provides me the ability to do some equity buying during down markets.
I'm now running what I call my all weather asset allocation (20% cash, 40% income and 40% equity) because it affords me everything necessary to meet my needs now being in the distribution phase of investing. The benefit of this asset allocation is that it provides me sufficient income, maximizes my diversification, minimizes portfolio volatility, and provides for long-term returns.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback. In addition, cash helps stabilize a portfolio during stock market volatility.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type mutual funds.
The 40% held in the equity area provides me some dividend income along with some growth that equities generally provide which helps offset the effects of inflation.
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way principal grows over time.
Over the past five years, or so, the following years were up years for me. They were 2014, 2016, 2017, and thus far 2019 while 2015 and 2018 have been down years. With this, I now govern and invest with more caution than I did years back when I was in the accumulation phase of investing and had a higher allocation to equities.
So, for me, Dr. Madell's comments in this months newsletter offers up some good old sage thinking and wisdom. Hopefully, it will for you as well.
I wish all ... "Good Investing."
Old_Skeet

FYI: U.S. stocks rallied to end a volatile week, as the September jobs report and continued bets on interest rate cuts helped ease fears about an economic slowdown.
Job growth in the U.S. remains a bright spot, even as signs of weakness mount in the manufacturing and services sectors. Earlier this week investors worried about a potential downturn pushed the S&P 500 down more than 1% in back-to-back sessions for the first time this year.
But the index is now on track to end a rocky week with a modest 0.6% loss after rebounding Thursday and Friday. Stocks were buoyed by expectations that the Federal Reserve will continue to cut rates to shore up the economy and sustain the current expansion.
Investors are betting the Fed will slash rates as soon as October, and Friday’s jobs report did little to alter those views. Even though the U.S. economy has been more resilient than others around the world, surveys of manufacturing and service-sector activity have hinted at future weakness that could eventually trickle into the labor market.
The S&P lurched higher 1.42% Friday on broad-based gains, which accelerated later in the session. Only the index’s energy sector traded lower on the session. The Dow Jones Industrial Average added 371 points, 1.42%. The Nasdaq Composite advanced 1.40%. The S&P 500 and Dow remained on track for their third consecutive week of losses, while the Nasdaq turned positive for the week.
Among the concerning reports that rattled markets this week: U.S. factory activity contracted for a second straight month and hit a 10-year low and the pace of growth in the services sector slowed as well.
Investors’ reliance on the Fed as a backstop was on display Thursday, when the Institute for Supply Management said its nonmanufacturing index hit a three-year low. Stocks initially dropped sharply, but then swung higher as investors ramped up bets that the Fed will slash rates again this year after two cuts in the third quarter.
Traders are betting on a roughly 42% chance of the central bank lowering its benchmark short-term interest rate two more times by the end of the year, according to the CME Group, up from 20% last week.
Friday’s jobs report showed the economy added 136,000 jobs in September, slightly missing estimates of 140,000 jobs. But the jobless rate dropped to 3.5% from 3.7% in August, marking a 50-year low.
Elsewhere, the Stoxx Europe 600 added 0.7%, after suffering heavy losses earlier in the week. Japan’s Nikkei gained 0.3%. And Hong Kong’s Hang Seng dropped 1.1% after the city’s chief executive said a ban would be implemented on wearing masks at public gatherings, with penalties of up to a year in jail and a fine.
Stock markets in mainland China were closed.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-04/your-evening-briefing
MarketWatch:
https://www.marketwatch.com/story/dow-set-to-open-lower-in-turbulent-week-as-wall-street-awaits-crucial-september-jobs-report-2019-10-04/print
WSJ:
https://www.wsj.com/articles/global-stocks-pause-ahead-of-jobs-report-11570177046
Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-03/asia-stocks-to-edge-higher-treasuries-climb-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-surges-300-points-stocks-rally-time-to-buy-apple/
CNBC:
https://www.cnbc.com/2019/10/04/dow-futures-nonfarm-payrolls-due-october-report.html
Reuters:
https://uk.reuters.com/article/us-usa-stocks/sp-500-dow-headed-for-best-day-in-a-month-after-goldilocks-jobs-data-idUKKBN1WJ1CB
U.K:
https://uk.reuters.com/article/uk-britain-stocks/ftse-100-snatches-gains-at-the-end-of-its-worst-week-in-a-year-idUKKBN1WJ0OM
Europe:
https://www.reuters.com/article/us-europe-stocks/u-s-data-lifts-european-shares-but-they-log-worst-week-in-one-year-idUSKBN1WJ0PR
Asia:
https://www.cnbc.com/2019/10/04/asia-markets-october-4-us-payrolls-global-economy-currencies.html
Bonds:
https://www.cnbc.com/2019/10/04/treasury-yields-cautious-ahead-of-nonfarm-payrolls.html
Currencies:
https://www.cnbc.com/2019/10/04/forex-markets-us-economy-in-focus.html
Oil
https://www.cnbc.com/2019/10/04/oil-markets-global-economy-in-focus.html
Gold:
https://www.cnbc.com/2019/10/04/gold-markets-us-economy-in-focus.html
WSJ: Markets At A Glance:
https://markets.wsj.com/us
Major ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitor
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures:
https://finviz.com/fut

FYI: U.S. stocks swung sharply in another volatile session Thursday as investors bet a string of disappointing economic data would spur the Federal Reserve to continue cutting interest rates.
The Dow Jones Industrial Average dropped as much as 335 points—and then recovered all of those losses to turn higher—after data showed services activity softened in September.
The Institute for Supply Management said its nonmanufacturing index hit a three-year low, sparking fears a manufacturing slowdown had spread to other parts of the economy.
The blue-chip index had already tumbled about 840 points, or 3.1%, over the two previous trading sessions on worries about an economic downturn. Reports earlier in the week showed U.S. factory activity slid to a 10-year low in September and the pace of job creation in the private sector slowed.
Thursday’s services data added to the anxiety, prompting traders to increase their bets on further easing by the Fed.
Federal-funds futures show traders are betting there’s a 53% chance of the central bank lowering its benchmark short-term interest rate two more times by the end of the year, according to the CME Group. That’s up from 39% Wednesday and 19% a week ago.
The Dow industrials climbed 123 points, or 0.47%, swinging nearly 450 points from the high to the low on the day. The S&P 500 rose 0.80%, and the Nasdaq Composite grew 1.12%.
The services sector had previously been considered a bright spot in the economy, overshadowing signs of weakness in the manufacturing space. But cracks started to emerge last week after data showed consumer spending cooled in August.
Investors continued to seek the safety of government bonds and gold. The yield on the benchmark 10-year U.S. Treasury note dropped for the sixth straight session, to 1.534% from 1.594% Wednesday, as bond prices rose. Gold climbed 0.5%, up for a third consecutive session.
Within the S&P 500, technology and energy stocks were among the biggest gainers. The real-estate and consumer-staples sectors—generally considered havens for their steady dividend payments—were also higher. Financial stocks were the only group in the red, slipping 0.2%.
In corporate news, PepsiCo shares climbed 3.8% on a better-than-expected earnings report. The food-and-beverage company posted strong revenue growth, though foreign-exchange moves weighed on the business.
Shares of Constellation Brands dropped 5.4% after the Corona brewer swung to a loss in the latest quarter.
Meanwhile, disappointing manufacturing data out of the U.K. added to growth fears.
The Stoxx Europe 600 fell less than 0.1% as fresh data added to the gloomy outlook for the broader European economy.
The U.K. services purchasing managers index hit a six-month low of 49.5, below the 50 level that marks contraction. The figures reignited concerns that the economy is in recession, analysts at Capital Economics said, adding that economic performance will remain “well below par” while Brexit negotiations drag on.
In Asia, Japan’s Nikkei fell 2%, while Hong Kong’s Hang Seng rose 0.3%. Stock markets in China and South Korea were closed.
In commodity markets, oil prices slipped 0.2%, with the U.S. benchmark on track for its eighth straight day of declines.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-03/your-evening-briefing
AP:
https://apnews.com/47bc840fb74d4140bc9ba893c3ebe521
MarketWatch:
https://www.marketwatch.com/story/us-stock-futures-lean-higher-after-two-days-of-heavy-selling-2019-10-03/print
WSJ:
https://www.wsj.com/articles/global-stocks-slip-on-weak-data-tariff-threat-11570090333
Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-02/asian-stocks-set-to-slide-as-slowdown-fears-grow-markets-wrap?srnd=premium
IBD:
https://www.investors.com/market-trend/stock-market-today/stock-market-reverses-higher-amid-positive-signals/
CNBC:
https://www.cnbc.com/2019/10/03/us-futures-point-to-slightly-lower-open.html
Reuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-gains-as-services-data-raises-odds-on-fed-rate-cuts-idUKKBN1WI199
U.K:
https://uk.reuters.com/article/uk-britain-stocks/ftse-100-hits-eight-month-low-as-global-slowdown-fears-take-hold-idUKKBN1WI0J4
Europe:
https://www.reuters.com/article/us-europe-stocks/euro-zone-shares-edge-higher-on-rally-in-airbus-luxury-stocks-idUSKBN1WI0KK
Asia:
https://www.cnbc.com/2019/10/03/asia-markets-eu-tariffs-us-eu-trade-currencies-and-oil.html
Bonds:
https://www.cnbc.com/2019/10/03/us-treasury-yields-lower-amid-trade-turmoil.html
Currencies:
https://www.cnbc.com/2019/10/03/forex-markets-us-jobs-data-in-focus.html
Oil
https://www.cnbc.com/2019/10/03/oil-markets-global-economy-in-focus.html
Gold:
https://www.cnbc.com/2019/10/03/gold-markets-us-jobs-data-in-focus.html
WSJ: Markets At A Glance:
https://markets.wsj.com/us
Major ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitor
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures:
https://finviz.com/fut

https://www.sec.gov/Archives/edgar/data/923084/000092308419000032/psbstatsticker10119-20194.htm
497 1 psbstatsticker10119-20194.htm
T. Rowe Price Personal Strategy Balanced Fund
Supplement to Prospectus Dated October 1, 2019
Effective January 1, 2020, the fund’s name will change from the T. Rowe Price Personal Strategy Balanced Fund to the T. Rowe Price Spectrum Moderate Allocation Fund. All references throughout the prospectus to the Personal Strategy Balanced Fund are replaced by reference to the Spectrum Moderate Allocation Fund. The portfolio manager, investment objective, investment program, and benchmark will remain unchanged.
Effective January 1, 2020, the first six paragraphs under the heading “MORE INFORMATION ABOUT THE FUND’S PRINCIPAL INVESTMENT STRATEGIES AND ITS PRINCIPAL RISKS” are replaced with the following:
The Spectrum Funds offer a professionally managed allocation of investments among a broad range of asset classes. To accommodate a wide range of investor preferences and time horizons, these funds offer six different combinations of the growth potential of stocks, the greater income potential of bonds, and the stability of money market securities. Some of the Spectrum Funds also offer the potential to temper volatility through alternative investments or derivatives. Because they invest in a variety of asset classes, including underlying funds, each Spectrum Fund is expected to benefit from diversification.
While there is no guarantee, the concept of diversification helps investors to reduce their overall risk by spreading assets among a variety of investments. Each type of investment tends to follow a cycle of its own and responds differently to changes in the economy and the marketplace. A decline in one investment can be balanced by returns in other investments that are stable or rising. Therefore, a benefit of the Spectrum Funds is the potential for attractive long-term returns with reduced volatility. Consider your investment goals, your time horizon for achieving them, and your tolerance for risk.
This prospectus only describes the specific investment program for this particular Spectrum Fund. The following information summarizes some of the basic differences between the Spectrum Funds. The specific investment program for each Spectrum Fund is described in greater detail in its prospectus.
For investors seeking broad bond diversification and can accept the possibility of moderate share price declines in an effort to achieve relatively high income, Spectrum Income Fund could be an appropriate part of your overall investment strategy.
For investors seeking broad bond and equity diversification for current income as well as potential for some capital appreciation from equities, Spectrum Conservative Allocation Fund could be an appropriate part of your overall investment strategy. The fund could be appropriate for an investor with an intermediate time horizon.
For investors seeking a balanced approach with broad equity and bond diversification that emphasizes stocks for potential capital appreciation and income to temper volatility, Spectrum Moderate Allocation Fund could be an appropriate part of your overall investment strategy. The fund could be appropriate for intermediate- to long-term investment goals.
For investors with a long-term horizon who want broad equity and bond diversification with significant exposure to stocks and can withstand market volatility in an effort to achieve potential long-term growth with income to temper volatility, Spectrum Moderate Growth Allocation Fund could be an appropriate part of your overall investment strategy.
For investors seeking broad stock diversification and can accept the possibility of significant share price declines in an effort to achieve long-term capital appreciation and some current income, Spectrum Growth Fund could be an appropriate part of your overall investment strategy.
For investors seeking broad international stock diversification and can accept the possibility of significant share price declines in an effort to achieve long-term capital appreciation, Spectrum International Fund could be an appropriate part of your overall investment strategy.
The funds are listed above in order of expected volatility, with Spectrum Income Fund offering the most conservative investment program (since it focuses primarily on bonds) and Spectrum International Fund offering the riskiest (since it invests primarily in international stocks). Generally, the potential for higher returns over time is accompanied by the higher risk of a decline in the value of your principal. Each Spectrum Fund’s broad diversification is designed to cushion severe losses in any one investment sector and moderate the funds’ overall price swings. However, the funds’ share prices will fluctuate as the prices of the fund’s underlying assets rise or fall with changing market conditions.
When adjusting the fund’s allocations among the asset classes and underlying funds, T. Rowe Price considers relative values and prospects for U.S. and international stocks, growth- and value-oriented stocks, and small-, mid-, and large-cap stocks, as well as the outlook for economic growth, interest rates, and inflation.
The date of this supplement is October 1, 2019.
F102-042 10/1/19