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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Introduction To "Clean Shares"
    Here's larger list ... have inquiry into Lipper, which shows them as having separate portfolio id number from the legacy funds of same name:
    FAPCX Fidelity International Capital Appreciation K6
    FBCGX Fidelity Blue Chip Growth K6
    FCLKX Fidelity Large Cap Stock K6
    FCMVX Fidelity Mid Cap Value K6
    FDVKX Fidelity Value Discovery K6
    FKICX Fidelity Small Cap Stock K6
    FKIDX Fidelity Diversified International K6
    FLCNX Fidelity Contrafund K6
    FLKSX Fidelity Low-Priced Stock K6
    FOCSX Fidelity Small Cap Growth K6
    FSKGX Fidelity Growth Strategies K6
    FTKFX Fidelity Total Bond K6
  • Does a Reversion To The Mean Follow Big Up Years?
    FYI: With just a few hours left in the trading day, the S&P 500 is on track to deliver a hefty gain of over 20% to investors for 2017 and the ninth straight year of gains on a total return basis. In the S&P 500’s history, there has only been one other period where the S&P 500 was in the black for nine straight years, and that was from 1991 to 1999. A big difference between that streak and now, though, is the magnitude of the gains. During the 1990s streak, the S&P 500’s total return was 450% compared to a relatively meager gain of 261% in the current period. If the S&P 500 does make further gains next year, it will be the first ten-year winning streak for the index ever. With such a big gain this year, though, can investors really expect to see gains in the year ahead?
    Regards,
    Ted
    https://www.bespokepremium.com/think-big-blog/does-a-reversion-to-the-mean-follow-big-years/
  • Infrastructure ETFs See Slight Bump On Report Of Coming Trump Proposal: (PAVE- (IGF)- (TOLZ)
    FYI: Exchange-traded funds tied to infrastructure-related companies have seen modest gains this week, following reports that President Donald Trump would make an infrastructure stimulus package a legislative priority next year, renewing a campaign pledge that had moved to the back-burner in his first year in office.
    Regards,
    Ted
    https://www.marketwatch.com/story/infrastructure-etfs-see-slight-bump-on-report-of-coming-trump-proposal-2017-12-28/print
  • Bitcoin - Is there an investment case for the cryptocurrency?
    @MikeM
    Maybe rebranded beverage companies are the way to go!
    This week, two beverage companies—Long Island Ice Tea Corp and SkyPeople Fruit Juice—saw huge stock gains after renaming their companies with cryptocurrency terminology.
    https://qz.com/1163073/beverage-companies-are-juicing-their-stocks-by-rebranding-with-cryptocurrency-jargon/?mc_cid=8b7d0c9026&mc_eid=858fcae90a
    Circa 2000: "But it's different this time!"
  • Buy, Sell and Ponder December 2017
    Old_Skeet's barometer report week ending 12/22/2017
    This week Old_Skeet's market barometer finished the week with a reading of 136 (the same as last week) indicating that the S&P 500 Index remains overbought. Generally, a higher reading on the barometer's scale indicates there is more investment value in the 500 Index over a lower reading.
    In review of my sector compass, even with the recent pullback in utilities (XLU), I am finding there are currently no sectors (from a technical basis) that have undervalued or oversold readings. The three best performing sectors for the week were energy (XLE), financials (XLF) and materials (XLB). For the quarter the three best performers are consumer discretionary (XLY), financials (XLF), and technology (XLK). Year-to-date the three best performing sectors have been technology (XLK), consumer discretionay (XLY), and industrials (XLI).
    In review of my global compass the three best performers for the week were Asia ex Japan (AXJL), emerging markets (EEM) and metals (CEF). For the quarter the three best performers were Japan (EWJ), S&P Mid Caps (MDY), and S&P 500 (SPY). Year-to-date the three best performing have been emerging markets (EEM), Asia ex Japan (AXJL), and Japan (EWJ).
    A good number of my mutual funds have now paid their year end capital gains ... and, with this, I am sitting on some excess cash as I take most fund distributions in cash. My worst performing equity sleeve thus far this year has been my small/mid cap sleeve with a year-to-date return of 12.8%. With this, I did some equity buying in this sleeve, this week, and raised it's weighting in the growth area of my portfolio. I'm thinking the smids should have a better year in 2018.
    Currently, year-to-date my portfolio's investment returns have been 13.9% and in comparison the Lipper Balance Index is up the same (13.9%) while a static 50/50 Index allocation that I track is up 11.8% and a professional run 50/50 adjustable mix Index fund is up 12.4%. My portfolio's allocation mix is 50/50 +/- 5% and gets tweaked form time-to-time. According to my equity weighting matrix I am overweight equity by 5% over what the matrix is currently calling for due to a seasonal investment strategy.
    With most assets currently being richly valued I remain in my cash build mode; but, doing a little buying around the edges. Thus far in December I have bought some muni's and smids. Looking at putting some money to work in a hybrid fund before year end.
    And, so-it-goes ...
    Thanks for stopping by and reading.
  • Bitcoin - Is there an investment case for the cryptocurrency?
    @MikeM
    Maybe rebranded beverage companies are the way to go!
    This week, two beverage companies—Long Island Ice Tea Corp and SkyPeople Fruit Juice—saw huge stock gains after renaming their companies with cryptocurrency terminology.
    https://qz.com/1163073/beverage-companies-are-juicing-their-stocks-by-rebranding-with-cryptocurrency-jargon/?mc_cid=8b7d0c9026&mc_eid=858fcae90a
  • Buy, Sell and Ponder December 2017
    I've been both rebalancing (mostly taking tax losses as I'll rebalance gains in Jan) and getting rid of individual stocks that I've concluded (its about time) I don't have enough success with. Most of the stocks were energy related that I tried to buy when it tanked and a little healthcare too, like VRX (ugh!)
    I also sold the last bit of FSCRX I had, a decision that was made when Chuck Myers announced his retirement but I took plenty of time implementing in a bunch of small steps.
  • DoubleLine To Make Its Own Brand Of Mortgage-Backed Securities
    FYI: DoubleLine Capital is embarking on a plan to originate and securitize mortgages, seeking to fill a niche that has traditionally belonged to banks and brokerage firms.
    The Los Angeles-based money manager, headed by Jeffrey Gundlach, is starting an investment adviser called Mortgage Opportunities Capital, according to regulatory filings. It will be an integral part of DoubleLine’s plan to raise capital from institutional investors to originate or buy commercial and residential real-estate loans and package at least some into securitized debt.
    Regards,
    Ted
    https://www.bloomberg.com/news/articles/2017-12-21/doubleline-to-make-its-own-brand-of-mortgage-backed-securities
  • Couple Big Doughnuts Today - OAKBX, PRWCX

    Appendix: I struggled to uncover the options trading in which PRWCX engaged at one point. Geez - had to go way back to their December 31, 2011 Annual Report to locate it.
    FWIW - “Before we review the portfolio, we want to briefly discuss the Capital Appreciation Fund’s covered call overwriting strategy, which we have employed for more than three years. Covered call overwriting involves buying a stock and then selling a call option—a contract whereby we agree at a future date to sell the stock at a predetermined (strike) price if the stock is above the predetermined (strike) price. In return for selling this call option, we are paid a premium (typically 3% to 6% per annum) that provides extra income to the fund and its investors. While this strategy caps our upside in an individual stock (usually 10% or higher), it provides incremental income that can enhance total returns and lower our downside risk. Over the last three years, this strategy (return combination of underlying stocks, call income, and dividend income) has generated a stronger return than the fund itself and has done so with materially lower risk. As of December 31, 2011, a little more than 20% of our equity holdings have calls written against them. Given the excellent returns and even more excellent risk/reward profile of this strategy, we believe it will continue to play a meaningful role in your fund.”
    Good find @Hank!!
  • Polen Capital Launches U.S. Small Company Growth Mutual Fund: (PBSRX)
    FYI: The Polen U.S. Small Company Growth Fund (PBSRX) intends to base the management and make-up on the existing U.S. Small Company Growth strategy. The Fund’s strategy aims to outperform by investing in stocks of businesses that the adviser believes are positioned to capitalize on long-term growth opportunities and have strong financials, a sustainable competitive advantage. We also focus on the potential for durable five-year earnings growth.
    Regards,
    Ted
    https://www.businesswire.com/news/home/20171219005516/en
    M: Snapshot PBSRX:
    http://www.morningstar.com/funds/XNAS/PBSRX/quote.html
    Polen Capital Management Website:
    https://www.polencapital.com/pdf/Media/USSmallCompanyGrowthMutualFundLaunchPressRelease.pdf
  • Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
    For most tax purposes, all traditional IRAs are lumped together into a single total. So segregating nondeductible contributions into a separate IRA doesn't simplify taxes. You're nontaxable fraction of an IRA distribution, as calculated on Form 8606 is:
    total of all nondeductible contributions across all trad IRAs / total value of all trad IRAs
    There is a rational desire not to "eat into principal". You don't want to deplete your assets that generate future dividends and growth. That said, it should make no difference whether you harvest your profits (while leaving principal untouched) in the form of interest, dividends, or capital gains.
    Own a bond, and you get interest while the principal remains intact (though shrinking in real value).
    Own a bond fund, and you get that same interest, but for legal reasons payments are called "dividends".
    Own a stock, and you get cash dividends while keeping the same number of shares (which may go up or down in value).
    Own a stock fund, and you those cash dividends passed through to you as fund dividends.
    Buy 100 shares of a stock @$20 ($2000 principal), sell 20 shares when it goes up to $25, and you've got $100 in cap gains and also your original principal (80 shares @$25).
    If that stock is in a fund and the manager sells those 20 shares, you get the $100 cap gains in the form of a fund "dividend", and your fund shares are worth what you paid for them (no change in principal).
    If the fund manager doesn't sell and distribute the profits, then the fund shares go up 25%. You sell 20% of your fund shares, get the same $100 capital gain, and your remaining fund shares are still worth what you paid originally (no change in principal).
    All of these retain your principal investment - whether you get interest, dividends, cap gains dividends, or take capital gains yourself. Yet somehow it feels different when the fund manager sells a stock (generating a cap gains div) vs. when you sell a fund share yourself.
    I'm guessing that therein lies the source of differing perspectives.
  • Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
    Trailing comment.
    Thanks to all that have made comments on this thread.
    I now have a few trailing comments that I'd like to make.
    One of the things that goes back to a comment I made was that "some distributions are taxed while some are not" is that non deductable contributions when removed in a sense are not taxed but become factored in with the normal distribution thus reducing the part that gets taxed. Since, I made some non deductable contributions to my traditional ira through the years this is something my accountant has to deal with each year as I take distributions. (I do not think this was covered in the link I provided).
    Again, since I hold enough income generating securities that kick off a good amount of interest, capital gains and dividends (I take all fund distributions in cash.) thus far I have not been forced to take any in kind distributions. In addition, I use that sleeve system and KCMTX would become a member of the global hybrid sleeve which is found in the growth & income area of the portfolio. Although, the size of the position when it comes to the overall portfolio would be small it would have a greater influence within its sleeve which now consists of CAIBX, PMAIX & TIBAX. I would build KCMTX's position over time through excess income generation over and above the required needed for RMD's. So, having a good income stream is beneficial because it provides the opportunity to add new positions without having to sell other securities to make the buy (from my perspective).
    On my comment about how certain types of income gets taxed this applies more to taxable accounts; but, since interest, dividends and capital gains are a part of total return along with capital appreciation I felt it worthy of comment.
    One of the great things about investing is that choices can be made in a fashion that allows each of us to obtain our goals. The comments I made center around what I do; and, by no means was I saying that they would be right for others to follow. With this, there is no one right way (or wrong way) to have success (or failure). We can each govern as we feel best.
    I wish all well this Holiday Season ... and, most of all "Good Investing."
    Skeet
  • Couple Big Doughnuts Today - OAKBX, PRWCX
    Just finished reading 'The Wizard of Lies' aka Bernie Madoff, and got to wondering if PRWCX could be a.....nah? Or could it.....nah.
    It’s a small niche mostly mid-cap fund that morphed into a bloated large-cap mostly blue chip fund than transformed itself into a pseudo hedge-fund trading options on its equity positions for defensive purposes. Some call it balanced. Price says it’s closed - but otherwise isn’t saying exactly what it is.
    Who was Madoff? Did money beat a path to his door?

    Appendix: I struggled to uncover the options trading in which PRWCX engaged at one point. Geez - had to go way back to their December 31, 2011 Annual Report to locate it.
    FWIW - “Before we review the portfolio, we want to briefly discuss the Capital Appreciation Fund’s covered call overwriting strategy, which we have employed for more than three years. Covered call overwriting involves buying a stock and then selling a call option—a contract whereby we agree at a future date to sell the stock at a predetermined (strike) price if the stock is above the predetermined (strike) price. In return for selling this call option, we are paid a premium (typically 3% to 6% per annum) that provides extra income to the fund and its investors. While this strategy caps our upside in an individual stock (usually 10% or higher), it provides incremental income that can enhance total returns and lower our downside risk. Over the last three years, this strategy (return combination of underlying stocks, call income, and dividend income) has generated a stronger return than the fund itself and has done so with materially lower risk. As of December 31, 2011, a little more than 20% of our equity holdings have calls written against them. Given the excellent returns and even more excellent risk/reward profile of this strategy, we believe it will continue to play a meaningful role in your fund.”
  • Couple Big Doughnuts Today - OAKBX, PRWCX
    @bee: Although it does not post estimated annual cap gains until they actual happen, Morningstar does show dividends and cap gains over the past two years by date and amount under quote section if you input the symbol
  • Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
    Ol’Skeet said ...
    “Certain types of investment income receive more favorable tax treatment than others.”
    TRUE
    “Some withdrawls form (sic) ira's are taxable some are not.”
    TRUE - But it has to do with the type of IRA (for example Roth vs Traditional)
    “The below link will give more information as to how interest, dividends and capital gains are taxed as well for withdrawals from ira's.”
    https://investor.vanguard.com/investing/taxes/investment-income
    YES - But, the link (from Vanguard) does not say that income generated within an IRA is taxed differently from capital gains generated within an IRA. To the best of my knowledge, income and capital gains accumulated within an IRA are treated essentially the same at the time of distribution. If investing outside your IRA (or similar plan) there is a big difference income and cap gains in tax treatment at time of withdrawal. But within IRAs or similar plans there’s no distinction made when the fund’s are withdrawn.
    I understand @Old_Skeet ‘s point about not wanting to sell down his “capital” or “growth” assets (ie: equities) to meet his yearly income requirements. From an allocation standpoint that makes perfect sense. But, I agree more with @MikeM’s overall take that for most of us, it matters little whether our IRA distributions were initially generated thru income or capital gains. In fact, I’m not aware of any tax records maintained by custodians that would make this workable. Can I not exchange from my IRA ultra-short bond fund at Price tomorrow into their (identically registered IRA) blue chip or international growth fund without the transaction being reported to the IRS?
    Personally, I take annual IRA distributions pretty much “across the board”. Typically, I’ll pull from the better performing asset classes as a means of rebalancing.
  • Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
    Thanks @Junkster . For whom it holds interest, here is the government's income and cost structure for medicare payments. And I agree. I would also like to see more posts and questions about money matters and issues during retirement.
    https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html
    @catch22, I have been of the same page as you. For withdrawals from tax-differed plans it is total return that matters. I see nothing to the contrary or anything about breaking down growth returns versus income through distribution when taking withdrawals from and IRA/401k in any of my searches.
    Generally, my traditional ira account generates enough income (interest, dividends, capital gain distributions) to meet my annaul RMD.
    @Old_Skeet I'm still missing your point why this matters for withdrawals in general. I see where it is comforting to you to know you are drawing from an income stream only and aren't drawing down principle, but in general, why would it matter where the RMD or any draw-down came from if all taxed the same? Actually, you aren't drawing from your income, you are drawing from your IRA as a whole.
  • Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
    @MikeM, certain types of investment income receive more favorable tax treatment than others. Some withdrawls form ira's are taxable some are not. The below link will give more information as to how interest, dividends and capital gains are taxed as well for withdrawals from ira's.
    https://investor.vanguard.com/investing/taxes/investment-income
    Generally, my traditional ira account generates enough income (interest, dividends, capital gain distributions) to meet my annaul RMD. With this, my principal stays in tack and often times my principal grows each year. The ira distributions are taxed at my normal income tax rate.
    In my taxable account, certain types of income gets treated diffently for taxation. Again, the above link will provide more details on how investment income gets taxed. Some of it is below my normal rate while some of it is tax free ... and, again, some of it is taxed at the normal rate.
    I strive to have a good variety of it; and, I am also mindfull not to excced the medicare income threshold where I have to pay increased medicare premiums. I believe for 2017 for a single filer it is $70,000 and for joint (husband & wife) $140,000.
    Hopefully, others that are reading this will find benefit in our exchanges.
    Wishing you the very best this Holiday Season.
    Skeet
  • Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
    @MikeM,
    Thanks for making comment.
    What I favor about KCMTX is not it's total return although it is a leader in it's classificaton; but, its ability to generate income. This comes form it being actively engaged in the markets making a good number of buy and sell transactions (turnover 318%) thus generating capital gains. When you fully retire ... I'm thinking you will start to look for some more income generation over what your present portfolio generates. If my memory is correct it was in the 1.56% range when I Xrayed it.
    One of the great things about investing is that we can each configure our portfolio to fit our own desires. You seek more growth while I'm seeking income along with some growth. From a 2017 distribution yield perspective I compute PRWCX at 6.4% and KCMTX at 11.5%.
    Indeed, both are great funds with each carrying 5*'s from Morningstar.
    Thanks again for making comment.
  • Couple Big Doughnuts Today - OAKBX, PRWCX
    I wanted to thank everyone that contributed to the capital gains posts.
    Only CapGains Valet is the only other centralized location for capital gains information.