Hi Kaspa,
Perhaps I should have used a different word set.
I will note that I fully understand the upward limit of my thinking capacity and have studied/reviewed some very complex (at least for me) charting functions. I do stop at points in this understanding and move back to the most simple of trends. You are more aware than myself of the volume of trending indicators any number of folks use. If these folks are able to improve their money growth, I salute them.
Your call on your sells was on the money. Looking back, one finds around April 9 as a start point, with some other equity areas holding their own through about April 23, with a lot of flip flops since then.
And your saving money from your money moves is money you will have in the future, with which again to obtain gains.
Hats off to you.
Selling is a tough consideration; let alone where to place the sold monies.
Take care,
Catch

Reply to @AndyJ: It's not necessarily trade in treasuries for div-paying stocks - I don't think the answer is necessarily black or white, simple or obvious. I think in the scramble for yield, there are a lot of people who bought into MLPs (for example), seeing the high yield but not doing research on the potential volatility. A fair amount of other dividend plays were likely piled into without careful research because everyone and their cousin was/is scrambling for yield.
Treasuries are fundamentally weak, but the demand could continue for months or years. That said, I think the move into treasuries will reverse at some point sooner than later, and I think that move may be sudden and severe.
From a Citigroup Analyst: "We also believe, when we look at the setup of the US ten-year yield, it suggests we could actually be seeing levels as low as 1.15% to 1.2% on US ten-year yields also. Overall, when we look at these bond market charts, and in particular when we look at the US charts, the indication of the type of levels we may go to, on yields and on the yield curve, are levels that are very hard to justify when you look at the underlying fundamental backdrop in the US.
So our bias is to believe these moves that are going to come, are going to be people who are actually trying to preserve capital. The most likely cause and effect on this is going to be further turmoil (in the markets). Essentially, in that instance, the beneficiaries would tend to be German bonds, US bonds, the US dollar and the Swiss franc.”"
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/10_Stocks_to_Crater_27,_Bonds_to_Rally_&_Gold_to_Remain_Firm.html
And other take:
"“If you look at the following weekly chart of the US Ten-Year Note, notice the yield has never closed, on a weekly basis, below the 1.8% level. It has penetrated that level on more than once occasion, but always recovered to close back above that level by Friday.
If we were to see a weekly close below the 1.8% level, that would definitely confirm the market would be expecting a serious bout of deflation. When the Citibank analyst, Fitzpatrick, mentioned in his KWN interview that the US Ten-Year yield could fall to as low as 1.15%, people have to understand that the conditions around the world would have to be absolutely horrific for that to occur (see chart below)."
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/11_Norcini_-_If_This_Happens,_It_Will_Signal_A_Collapse.html
Finally, an extreme take on the longer term from Marc Faber, but not one that I think is entirely out of the question in this day and age:
"Look at the history, for example, of Germany, for the last 100 years. They had World War I. They had the hyper-inflation in World War II. The bond-holders got wiped out three times. If you owned Siemens, and you still own Siemens today, it was not a fantastic investment, but at least you still have something. You were not wiped out. I think that in equities you will be better off because you have an ownership in a company, than by being the lenders to companies, and the lenders, especially, to governments."
http://www.zerohedge.com/article/marc-faber-i-think-we-are-all-doomed
As for corporate bonds, an environment that allows things to happen like the Chesapeake issue in the article earlier in this thread is concerning - that's absolutely not to say that it's a large-scale problem and I do think corporates are a good choice overall. However, I think there is the potential for a negative flipside of all of this corporate debt issuance and it would not surprise me if there were a lot more companies in a situation similar to what Chesapeake is currently doing. The scramble for yield will result (and has resulted) in people looking at yield over credit risk.

Well, I know this thread was originally on low risk EM funds, but the comparison and comments about ARIVX bug me a little.
The comment "...including investors rushing to get in before the fund closed (...which by the way ARIVX is underperforming its peers YTD)".
I switched my small cap holdings to ARIVX back in spring-summer of 2011, so I guess I was one of those that went rushing in. I contend that investors that went rushing in before the fund closed were smart investors. There aren't many managers in the small cap category with the record of Eric Cinnamond. This is a 'preserve capital first' fund that is easy to hold onto in bad times and good. The fact that ARIVX didn't jump out of the gate YTD doesn't mean anything over the the long term. But if short term numbers are important, it has actually been pretty impressive in the last few months as the stock market has cooled. Heck, it's even on the positive side for the week (+.74%) when most all equity funds are down - especially it's small cap benchmark. ARIVX is beating it's benchmark in any time range you look at, except the YTD #. One week, 1 month, 3 month, 1 year. If you look at Cinnamond's previous fund, ICMAX, that funds record beats the index for the 3 and 5 year periods handily. I'm more then happy I made the switch.
So, that's my 2cents on "...those rushing in..." to ARIVX. Not sure why, but I felt compelled to stand up for this terrific fund manager.

Reply to @scott: I guess the thing I wonder about the initial portfolio is why the fairly long startup process for the fund (after he'd gotten Seafarer Capital organized) wasn't enough time for him to do at least some DD to come up with a somewhat more geographically diverse portfolio.
So I don't own it now, but would love to see Sfgix move toward becoming a solid, broad-based, core EM fund - and I'd likely be a buyer if/when that comes about.

Hi Guys,
In its May 10, edition, the WSJ honored great stock analysts on an annual basis. The Journal prepared and published an extensive series of articles that featured a listing of the three top master stock pickers in 44 sub-sector equity categories.
These top performers were granted Olympic-like status, similar to the newly minted gold, silver, and bronze metals now awarded by Morningstar in their second ranking formulation. This second Morningstar scoring procedure is purportedly forward looking in character, and supposedly contrasts with its famous “star” system which is fully rear-mirror looking by design.
The WSJ rankings share the same attribute as the Morningstar Star system. The Star formula has revealed its mutual fund selection shortcomings over time. How useful is the WSJ assessments with respect to individual stock picks?
On an individual stock picker basis, the WSJ listings show impressive results for the few category winners. But this is using hindsight bias; the champions for 2011 clearly established their superior records for that calendar year. But could the Journal identify these potential winners before the record was accumulated and evaluated? How persistent is performance over time? An overarching question is how skilful are the stock picker elite as a group? Do they really benefit their clients as a total?
All stock analysts hired by financial firms are smart folks. They have great educations, super support staff, considerable on-the-job experience, and are highly motivated by personal pride, institutional recognition, and financial incentives. If anyone can successfully project future stock price movements, these guys should be the chosen ones.
Intelligence, training and experience do matter. But the impact of these positive factors are muted if the price movements are chaotic by nature because of unknowable exogenous events and by internal complex feedback loops that are not modeled, perhaps not even recognized. The problem is further aggravated by irrational and inconsistent public behavioral responses. Investors reactions change remarkably when confronted with identical decision scenarios. Patterns get distorted over even short timeframes.
Additionally, as Nassim Taleb and Daniel Kahneman observed in their respective “Black Swan” and “Thinking, Fast and Slow” books, luck is a key element in investment outcomes.
Therefore, it is not shocking to discover that, although winners always exist in the stock selection marketplace, that same space also includes a substantial number of losers. The WSJ metal awards do not address the other end of this results spectrum.
But I do. Here’s how.
Besides showing the three superior stock pickers for each of the 44 sub-sector equity categories, the Journal also provides the class median performance for each of these categories. I used that data to complete a simple statistical analysis that yields an overall assessment of the entire host of stock analysts who were included in the contest.
The WSJ scoring system is a little complicated so I have appended a Link to the Journal article that addresses the scoring methodology. It follows immediately:
http://online.wsj.com/article/SB10001424052702303404704577307901542943884.html?mod=WSJ_Investing_MoreHeadlines
In general, a positive score means that the stock pickers generated a net positive return for investors following their recommendations. Prescient sell signals were also incorporated into the evaluation by reversing the sign on the returns. The higher the net analyst score, the higher the likely client wealth enrichment potential. Note that many individual analyst and category scores were negative for the year, a wealth depleting likelihood.
My simple analysis did not incorporate any weighting factors to adjust for the very disparate expert numbers who populated the various sectors. That refinement would improve the analysis but requires additional work. Given that I’m a bit lazy and out of training after two decades of retirement, I punted on that task. Perhaps a more energetic MFO participant can carry that ball across the goal line.
Unfortunately, you must subscribe to the Journal to gain access to the overarching article titled “What Makes a Great Stock Analyst?” . Sorry about that. Perhaps you can identify an indirect avenue to secure access.
My simple global statistical assessment shows that the analysts as a complete cohort did not add wealth for their clients. All of us have been exposed to similar findings for active mutual fund management. Market experts and pundits promise much, but frequently deliver little.
The mean net return (gains minus losses) for adhering to the analysts’ recommendations was -1.11 units for 2011. Performance variability (standard deviation) was an unattractive 10.31 units. The maximum gain was 16.07, but the maximum underperformance was -23.33. Only 21 out of 44 category groupings (47.7 %) produced positive rewards. These results are disappointing given the talent and resources committed to uncovering attractive stock possibilities. Once again, luck seems to be a dominant factor.
Overall, the WSJ awarded 132 (3 X 44) metals. The awards were scattered among 66 institutional and research firms. Goldman Sacks collected the most metals, 9 out of 63 analysts who qualified from Goldman for the competition. From a research corporate perspective, Morningstar came in third place with 6 metals from a recognized 63 entries.
That concludes a summary of my crude statistical analysis of the WSJ survey. Now some interpretation.
All analysis must be placed in a context framework. How tough was the equity marketplace for the stock picking army? Was there major tailwinds or headwinds? With the benefit of perfect hindsight, it was a mixed bag. In the US, this is appropriately measured by the mixed Index returns for 2011. The S&P 500 returned 2.1 %, the Wilshire 5000 delivered 0.6 % on the positive side of the ledger. The NASD composite absorbed -0.8 % while the Russell 2000 eroded -4.2 % of wealth on the negative side. The recorded returns demonstrated that the marketplace was not easy pickings during the previous year. Perhaps that was anticipated by customers and encouraged them to more fully implement expert advice. Of course, that’s speculative on my part.
However, remember that the WSJ challenge was focused solely on a stock pickers ability to select specific stocks, not overall market behavior. His stock instincts and intuitions were being tested to determine his skill set in that arena alone. He was credited with a positive score both if his buy picks delivered profits and if his sell signals were properly aligned with subsequent performance. The WSJ constructed a fair test to gage stock picking acumen. They formulated a valid scoring method independent of the broad market direction.
Even with my incomplete statistical analysis, we are now in a better position to answer one of the original questions posited earlier: Do stock picking gurus globally reward their clients? My answer is “No”. Some do, but slightly more do not.
This analysis did not consider the costs associated with their task. That cost is a lot of money out of the pockets of the customers and into the deep pockets of the star pickers and especially into the coffers of their resident firms. That’s yet another drag on customers who often underperform annual market returns.
The WSJ’s series honoring star stock pickers is misleading since it highlights the winners but mostly ignores those pickers who subtracted from their client’s wealth. The rating and ranking game is a double-edged sword that demands a broad statistical interpretation that is frequently omitted when promoting an agenda. In his book, Daniel Kahneman described it as WYSIATI (what you see is all there is). The WSJ articles perpetuate this tendency to only deploy the intuitive portion of the brain when making investment decisions while ignoring statistical data that establishes a base rate to make a more informed decision.
So, I am under-whelmed by these findings as presented. Expert knowledge has its limitations, especially in a complex, chaotic environment with few consistent investment rules that survive time, and an unruly, emotional investing public. My analysis morphs the buyer beware bromide into a reader beware context.
What do you think?
Best Regards.

Thanks Ted,
A strategy I am trying to refine goes something like this...
Zero Coupon and Extended Duration LT Bond prices (not yield) can be a very choppy ride just like any investment. I use EDV, Vanguard's Extended Duration ETF in combination with other Vanguard ETF Equity holdings together as a "paired investment". I have found this "paired investment" strategy helps with the "ying and the yang" of bonds and equities. I try to re-balance between these "paired investment" as they move 10% opposite one another.
Here's an example over the last three months. If I owned VTI, Vanguard Total Stock and EDV, Vanguard Extended Duration US Treasuries as a "paired investment" there would have been a sell signal on 3/18/2012 because the difference between the two funds reach 10 percent (4% gain by VTI and a 6% loss by EDV).
The idea is to sell a little bit of the winning of one long term holding (in the example 4% of VTI and buy a little bit of the other long term holding (in this case EDV).
The Math on this chart:
Feb 3rd you hold $10,000 (143.143 shares) of VTI. On 3/19/2012 VTI gains 4% = $10,400.
Feb 3rd you hold $10,000 ( 89.032 shares) of EDV. On 3/39/2012 EDV losses 6% = $9,400.
At Vanguard I have to buy and sell whole shares of ETFs so I would sell 6 shares of VTI (6*72.73=$436.36). I would buy 4 shares of EDV (4*105.63=$422.52). There is a need for a cash position to allow both transaction to happen on the same day.

Reply to @Old_Joe: I'd agree with that, and I think the more I have CNBC on in the background and the more I hear, "WHY ISN'T THE RETAIL INVESTOR PARTICIPATING OMG!", the more I agree with that. They don't get why people are upset, they don't get why many retail investors have lost trust and the anchors stare blankly when they are told that some retail investors would honestly rather go to Vegas than put money in the market and trust Vegas more. They also - as you said - don't get the reality many people are facing.
Either they don't get it, or - and Jim Rogers said it - CNBC is primarily a PR firm for the market. (http://www.zerohedge.com/article/jim-rogers-calls-cnbc-market-pr-agency-whose-sole-purpose-make-stocks-go-higher) CNBC just said people's anger at banks was "unfocused" and disorganized and are whining about the occupy movement and how they don't "get it." "I know people are frustrated, but why take it out on the financial services industry?" lol.
Meanwhile, CNBC is facing its lowest ratings in many years.
I think there are exciting companies that I want to be involved in, especially in the developing world. People aren't going to be pulled into risk again, and those hitting retirement age are going to value capital preservation over appreciation and it wouldn't stun me if you see continued movement into fixed income. That's not to say that people shouldn't invest in stocks, but I do think people have to keep expectations in check and the volatility is going to continue to cause people to exit.
I do think that the emerging consumer has the potential to do better over time, and that's part of the reason why you're seeing moves like you are in some of the Brazil consumer names (AMBev) and Mexico's FEMSA and elsewhere. That'll be a bumpy ride, but the emerging consumer - I think - remains a potentially very good long-term theme (ECON etf is a broad way to play.)

Reply to @catch22: "While I am sure there are enough here at MFO who may consider our portfolio mix a bit dim-witted; this house's full retire plan is just around the corner. Cash flow from and working wage will cease. We plan to stay away from any SS distributions as long as possible, as the payments find healthy increases when waiting past age 66; and we will be aiming for age 70 to start draws. Based upon my recall, the annual SS payment moves upward about 8% each year between ages 66 and 70, when one waits. Pretty tough to find an 8% annual return on money these days, eh?
As you are aware, at the very least; we will preserve capital to the best of our ability."
See, the thing is, you may not necessarily be wrong in your approach from a general standpoint and there's also the fact that there's going to be a LOT of people in your generation who are going to be doing the exact same thing - they are looking to preserve capital and will not be throwing the dice with risk again. Many people in your generation will not be taking risk, and many people in younger generations can't afford to (enormous student loans, etc.)
"I continue to be disappointed will some of the folks on the business channels. "
Every five seconds they blather about how retail investors aren't coming back. None of them appear to have an idea as to one reason why and can't comprehend that you have many people no longer willing or able to take risks - or at least to the same degree.

Hi hank,
Geez, if the 10 year travels below 1.5%; there would likely be many other nasty events taking place. I would much prefer to be an equity investor (again) to a much higher percentage.
While I am sure there are enough here at MFO who may consider our portfolio mix a bit dim-witted; this house's full retire plan is just around the corner. Cash flow from a working wage will cease. We plan to stay away from any SS distributions as long as possible, as the payments find healthy increases when waiting past age 66; and we will be aiming for age 70 to start draws. Based upon my recall, the annual SS payment moves upward about 8% each year between ages 66 and 70, when one waits. Pretty tough to find an 8% annual return on money these days, eh?
As you are aware, at the very least; we will preserve capital to the best of our ability.
I continue to be disappointed with some of the folks on the business channels. There are enough of them who are almost outright fools about the economy and finance on too many days. I don't know how they arrived at their station in life with some of the pronouncements that are made to the public air waves.
Sadly, I observed a conversation among 4 this morning; and all of these folks are nominally level headed and not loud mouths about anything. The discussion was about the 10 year T rate. Statement, more or less: "Your government is only going to pay you 1.8% to hold this note for 10 years." Others; blah, blah, yes............. I know these folks know better and any one of them could have interjected "the fact that as the yield moves down one is able to make money with the upward move of the underlying price; and when one feels rates are going to move upward; one sells. One may take advantage of this current yield fact with any of a number of active managed bond funds or etf's; and to not expect to hold onto such an investment forever."
So many of these people do a great disservice towards too many things investment related.
I can imagine that as the network moved to commericial break that anyone of them scratched their own asses and/or picked their noses. Hopefully, not in that order; or at the very least, used the other hand.
Their are days when any number of folks here at MFO could be on the phone with these folks and offer the old CBS network (60 minutes?) "Point - Counterpoint" to indicate there is indeed other things to consider.
Many IG bonds are negative yield or just slightly above, indexed to inflation. We don't really give a rip about that at this time. We're not after the yield with these bonds, we gather the price increases. The yield is just a bit of extra money. Hopefully, not unlike any equity investment, we will leave this area in a timely fashion, as needed.
Pretty sad stuff on too many days with these chatter box heads.
Take care of you and yours up "that'a way".
Catch

From my watch list....
Bruce Fund (BRUFX), easily. By an average of about 7%/yr
Westport R (WPFRX)
Eaton Vance Atlanta Capital SMID-Cap (EAASX)

RBC Wealth Management
Michael D. Ruccio, AAMS
Senior Vice President -Financial Advisor
25 Hanover Road
Florham Park, NJ 07932-1407
(p) (866) 248-0096
(f) (973) 966-0309
[email protected]
michaelruccio.com
rbc investments commentary
Market Week: May 7, 2012
The Markets
The Dow hit its highest point in more than four years on Tuesday, but it was basically downhill for equities after that as investors decided to take some of their year-to-date profits off the table in advance of key European elections over the weekend. The S&P 500, Nasdaq, Russell 2000, and Global Dow all had their worst week of 2012, and the Dow's 168-point loss on Friday gave the industrials their second worst week of the year. The selling helped the 10-year Treasury yield hit its lowest level since early February as prices rose. Meanwhile, oil prices slid below $100 a barrel, while gold reversed the previous week's gains, falling almost $30 back to $1,634.
Market/Index 2011 Close Prior Week As of 5/4 Week Change YTD Change
DJIA 12217.56 13228.31 13038.27 -1.44% 6.72%
Nasdaq 2605.15 3069.20 2956.34 -3.68% 13.48%
S&P 500 1257.60 1403.36 1369.10 -2.44% 8.87%
Russell 2000 740.92 825.47 791.84 -4.07% 6.87%
Global Dow 1801.60 1946.39 1893.39 -2.72% 5.09%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.89% 1.96% 1.91% -5 bps 2 bps
Equities data reflect price changes, not total return.
Last Week's Headlines
Unemployment fell to 8.1% in April, according to the Bureau of Labor Statistics. However, that was not necessarily good news, as the drop was largely the result of people leaving the work force. The economy created only 115,000 new jobs; that's substantially lower than the 154,000 jobs added in March or the 252,000 monthly average between December and February.
Off with his head: The frustration about Europe's finances that has previously brought down heads of state in Greece, Spain, and Italy took its toll on French President Nicolas Sarkozy. The election of François Hollande, who campaigned against the fiscal austerity and budgetary discipline measures supported by "Merkozy" (German Chancellor Angela Merkel and Sarkozy), creates uncertainty about the future of those measures.
The political parties that comprise Greece's ruling coalition suffered losses in the country's parliamentary elections, raising questions about whether a reorganized government would support the austerity program required for future bailout assistance.
Spain's gross domestic product contracted for the second quarter in a row. That officially put the financially troubled country into recession; coupled with Spain's struggle to implement austerity measures, a recession could make it more difficult for the eurozone's fourth largest economy to reduce its budget deficit and meet sovereign debt guidelines. The country also received a second piece of bad news when Standard & Poor's downgraded the credit ratings of 11 Spanish banks. Meanwhile, the European Central Bank kept its key interest rate unchanged at 1%.
The Bureau of Economic Analysis said consumer spending rose 0.3% in March and incomes grew 0.4%, helping to nudge the savings rate up slightly to 3.8% of disposable income.
The U.S. services sector grew in April, but the 53.5% reading by the Institute for Supply Management was 2.5% lower than the one in March. However, the ISM's manufacturing index was up 1.4% from March for a reading of 54.8% and a 33rd consecutive month of expansion.
U.S. construction spending rose 0.1% in March despite a 1.1% decline in spending on public construction such as state and local highways and schools. According to the Department of Commerce, private construction was up 0.7% from the previous month, roughly evenly divided between residential and nonresidential projects.
Fixed-rate mortgages have hit record lows once again, according to Freddie Mac. The 3.84% average rate for a 30-year fixed-rate mortgage was almost a percentage point lower than the 4.71% of a year ago, and 15-year mortgages were at 3.07% compared to 3.89% last year at this time.
Eye on the Week Ahead
In a week that's light on economic data, investors will attempt to gauge the impact of French and Greek elections on the eurozone's willingness and ability to enforce austerity measures and debt guidelines.
Key dates and data releases: international trade, import/export prices, U.S. Treasury budget (5/10); wholesale inflation (5/11).

"Wonder what the major brokerage houses that were pumping stocks are going to say now? "Ooops"."
There's a real disconnect that seems as if it's growing larger between the Buffett "long-term" view, the screeching on CNBC every five seconds about the retail investor not being in and the reality of continued retail outflows. People (the average person) continue to be much more sensitive to movement in the market, and many of those who left the market aren't coming back, despite financial media talking about it. In terms of "Ooops", that's potentially more of a short-term thing, but it's something people can point to negatively about wall street. Much of the population is looking for a reason to not be in risk, and you see it every time the market has become more volatile this year and equity fund outflows just ramp. Bond fund inflows continue and continue and continue.
I'm sure the continued volatility that will likely be seen this week will almost certainly lead to yet larger outflows from stock funds.
Lastly, before everyone irritatingly jumps in about his recent record, I do agree with this from David Rosenberg about what people are doing. "The “baby boomers” are driving the demand for income which will keep pressure on finding yield which in turn reduces buying pressure on stocks. This is why even with the current stock market rally since the 2009 lows - equity funds have seen continual outflows. The “Capital Preservation” crowd will continue to grow relative to the “Capital Appreciation” crowd." Right or wrong, you have a lot of people (especially the older crowd) who are not going to be forced - en masse - into risk.
and (from Rosenberg)
Investment Stategy - Safety and Income at a Reasonable Price
Focus on Safe Yield - Corporate bonds
Equities - Dividend growth and yield, preferred shares
Focus on companies with low debt/equity ratios and high liquid asset ratios. The balance sheet is more important than usual.
Hard assets that provide an income stream - oil and gas royalties, REITS.
Focus on sectors or companies with low fixed costs, high variable cost, high barriers to entry, high level of demand inelasticity.
Alternative assets - that are not reliant on rising equity markets and where volatility can be used to advantage.
.Precious Metals - hedge against reflationary policies aimed at defusing deflationary risks."
http://www.zerohedge.com/news/strategic-investment-conference-david-rosenberg

Howdy,
Again, a thank you to all who post the links and also start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... The Big Hmmm... for we investors, eh? This weeks thoughts are prefaced with the assumption that the machines and/or those who use them for trading; reportedly, are major factors for 85% of investment markets activity. Whether you agree with this or not; the large market forces do move our investment fortunes. If we had a 4' x 8' lcd screen upon the wall that displayed the various sector groups; this is what I would see traveling the days of last week: The U.S. found strength in retail, biotech, housing, consumer staples, air trans., tele-com. and utilities, until Friday. Real estate, both U.S. and Int'l kept some strength for the week; with some utilities closing slightly positive on Friday. The biggest gains on Thursday & Friday were the inverse funds in almost every equity/commodity sector globally; followed with smaller, but positive gains in most bond sectors. Overall, it appears the largest U.S. equity sector losses were lg. and small cap value. Bonds found the largest gains in IG areas; being some corp., Treasury (including TIPS) and muni bonds, as well as surprising support for many HY types; with most EM bond areas maintaining. Recently arriving home early Sunday evening and also finding Sarkozy has lost his bid for renomination in France. Some of this outcome may be factored into markets last week; but may have other implications, come Monday.
Overall, many equity sectors globally are a little stinky; and many bonds the opposite direction. Obviously, the duration and strength of these moves will hold more short/medium term clues.
As to sector rotations below; for the past week: (Note: any given fund in any of these sectors will have varing degrees of performance based upon where the manager(s) choose to be invested.)
--- U.S. equity - 1.9% through - 5.3%, avg. = -3.2%
--- Int'l equity + .7% through - 4%, avg. = - 2.3%
--- U.S. eq. sectors + .1% through -5.4%, avg. = - 3%
--- U.S. IG bonds + .8% through +.0%, avg. = +.3%
--- HY bonds - .1% through +.8%, avg. = +.4%
The 5 best groups among the U.S. equity sectors: real estate, utilities, telecom, con. staples and air trans, although few finished the week positive; but with smaller losses. Int'l equity found China with slight positives, and Canada (commodity and U.S. exposure?) being the worst this week at about a -4%; with all other somewhere in between. There is an obvious large spread among some of the areas listed above. Now if we can only discover the forward paths.
You may consider our portfolio to be quite boring, but you may be assured that it moves and bends about each and every day; from forces beyond our control. We retail investors will find many interesting investment periods to ponder, as usual, in the coming years.
I have added a few blips related to our portfolio and market observations at the below SELLs/BUYs and Portfolio Thoughts.
SELLs/BUYs THIS PAST WEEK:

The remainder of FSAGX was sold on May 3 with the proceeds equally moved to FNMIX and FRIFX. FSAGX was purchased on 8-11-11 with the first half being sold on 3-16-2011 (- 9.8%) along with all of FFGCX, which is 1/3 each of energy, metals and agriculture companies. The remaning 50% of FSAGX was sold with a -26%. We have been in and out of this sector about 10 times since the mid-80's and are still ahead of the curve in this sector. Not unlike any fund area you choose to review, the cycles have been and remain in place; as this is the nature of the investment beast.
Portfolio Thoughts:
Our holdings had a + .22 % move this past week. Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = -1.72%, YTD + 8.09%). Still plodding along. We will retain our bond holdings; but will keep a close watch in the HY area, as well as any consideration of sells in the equity funds based upon recent and Monday market actions. Final note as to our funds. LSBDX and TEGBX did not react well with Friday's close. Both of these funds had downside pressures during similar market actions in 2011, but did recover. For we retail investors; it comes down to your risk/reward tolerance in conjunction with your skills, as well as how much money we can afford to lose and still maintain one's desired life style. We surely are not all in the same boat for this area. The so-called 1% and 99% exists here, and with other retail investors, too.
The old Funds Boat is at anchor, riding in the small waves and watching the weather. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
The first two links to Bloomberg are for their list of balanced/flexible funds; although I don't always agree with the placement of fund styles in their categories.
Bloomberg Balanced
Bloomberg Flexible
These next two links are for conservative and moderate fund leaders YTD, per MSN.
Conservative Allocation
Moderate Allocation
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 5 funds (below) we watch for psuedo benchmarking are the following:
***Note: these week/YTD's per M*
VWINX .... + .08 week, YTD = + 4.63%
PRPFX .... - .80 week, YTD = + 4.58%
SIRRX ..... + .43 week, YTD = + 3.14%
TRRFX .... - 1.00 week, YTD = + 5.90%
VTENX ... - 1.05 week, YTD = + 5.13%
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh? Hey, I probably forgot something; and hopefully the words make some sense. Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
---Below is what M* x-ray has attempted to sort for our portfolio, as of March 9, 2012---
U.S.Stocks 10.5%
Foreign Stocks 6.8%
Bonds 78.5% ***
Other 4.2%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"; which doesn't always imply the holdings, eh?
-Investment grade bond funds 26.8%
-Diversified bond funds 20.5%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 5.1%
-U.S./Int'l equity/speciality funds 6.6%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX.LW Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FDLSX Fidelity Select Leisure
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

My thoughts:
Housing will take years (and quite likely decades, depending) to really ramp up again in general. However, prices are likely close to a bottom in many areas. There's probably another 5-10% of downside and maybe a bit more, depending on if things start turning South again. Properties in major cities (in terms of condos) are in many cases at prices they have not been at in ages - in locations that many probably thought a few years ago would never be this affordable again.
Older generations looking to downsize will create headwinds, and they will likely not find buyers for larger houses at the prices they would like. The McMansions will have to come down, because the competition will be at lower price points and more manageable houses that will be of interest to both first-timers *and* an older generation who doesn't want the big house to take care of anymore. Maybe some of the McMansions could be revamped as duplexes. The other headwind is going to be getting a mortgage. Ease of getting one swung way too far one way, now it's swinging towards much more difficulty. While that's a good thing in some ways it means less available buyers, and other issues will create less buyers, such as people who short sold their prior house.
I've seen all manner of HGTV shows from a few years ago where the young couple just starting out wants some ridiculous 3,000 square foot place. People are going to be looking for what they need - maybe not in every case, but more often. Utility, convenience. Location, location, location. People are not going to buy beyond their means to the same degree, and wind up with a house that costs that much more to maintain and results in all manner of other issues, tax and otherwise. Taxes will be an issue, although I question whether of not the rise in property taxes compared to the drop in property values (making the tax burden a larger and larger % of house value) is sustainable.
Overall, I think you maybe have another 5-10% (maybe 12-15%, tops) down (which will take a while longer), and then it's flat-to-very slight (but it'll vary heavily) *at most* price gains for a few years, and then maybe a few years after that you get low single digit gains for a few years beyond that. Gradually, over time, housing starts rising again at a more moderate pace. As of right now, you have houses in some areas that are likely below their intrinsic value and it's cheaper to buy then rent in many areas (if you can qualify for a mortgage), but that doesn't seem to matter. Those who can buy now and have a long-term time horizon (they're going to be living there, it isn't a "flip") will probably do okay. It's going to vary a lot by place. Again, I think location and convenience is going to be big - a major city condo that is in the middle of everything and going for a price that people haven't seen in ages is going to have a lot more value and interest than a generic condo in an area where one has to drive everywhere and there's a million other generic condos like it. Location, location, location. Is it near good schools, transit, etc?
The other thing I've noticed, and maybe it's just me, co-ops don't seem to be moving, maybe because people just take one look at the high HOAs (despite the fact that they cover a lot) and move on. As for HOA's, I think that may also be an issue with some condos where they may look fine on the outside, but further investigation may reveal people not paying HOA's, etc.
I definitely disagree with the people in financial media screaming (not saying Kiesel is being Cramer-like about housing at all, but some keep hyping it) about buying a house (and much like the fact that they scream about how people aren't buying stocks every five seconds) - buying a house right now for those who can is not a bad idea, but I think one has to have a very long-term view and reasonable expectations. Certain things will do okay or reasonably well over the next decade. Certain real estate will take much longer.
I'm positive on real estate, but realistic and think it'll do okay for someone who has a long-term horizon. Anyone expecting some sort of price ramp over the next few years resembling anything close to what was seen in the housing boom is going to be disappointed.
As for those who have bought in the last couple of years:
"(Reuters) - More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and Federal Housing Administration loans that require only a tiny down payment are partly to blame.
That figure, provided to Reuters by tracking firm CoreLogic, represents about one out of 10 home loans made during that period."
http://www.cnbc.com/id/47191744
Anyone buying lumber can look at one of the Timber REITs, such as Potlatch (PCH) or Plum Creek. Potlatch is close to a 52wk low.

Hi Art,
Sorry for your loss.
With inheritance I might suggest sitting down with an estate planner who could evaluate your goals and needs. There may be missing pieces such as, a 529 plan for educational expenses, annuities, Long term care insurance; hell, even a small life insurance policy that pays burial expenses for you or you loved ones. Many of these would either defer taxes or eliminate taxes while at the same time reduce capital risk in your portfolio.
As this experience of settling your loved one's estate "settles", maybe you have learned some things that were done well and some that you could improve on for your estate.

Hi Art,
I had the same thing to deal with a few years back. I configured the taxable account to hold a good portion of tax advantaged income producting assets and the tax deferred accounts, ira and 401k, to hold the other as much as I could. The CD ladder was held in the taxable account and there were still taxes to pay on the interest income it generated and the dividends form stocks along with some capital gains associated with profits form the sale of securities. You can somewhat reduce taxes form the type of assets you hold in the taxable account; but, at some point in time you are going to have to most likely pay the tax man. I sold some tax free munis off at a profit and had to pay taxes on the profits from the sale ... and, I had some called at a premium ... and, I still had to pay.
Have a good day ... and, I wish you the very best at sorting this out.
Skeeter

That's neat! How long do you suppose a loss "in share value relating to shifting
investor sentiment or other normal share price volatility" would have to last before it actually became a "permanent impairment of capital"? Couple of years maybe, or even longer?

http://www.firsteaglefunds.com/funds/globalincomebuilderfund.php
First Eagle Global Income Builder Fund aims to deliver a meaningful but sustainable income stream across all market environments. Through bottom-up fundamental analysis focusing on global income-producing securities, the team seeks to avoid the permanent impairment of capital by investing only where they believe an adequate discount to intrinsic value exists. While securities are considered because they generate income, they are purchased because we believe they offer a substantial margin of safety
===
Principal Investment Strategies
To achieve its objective of current income generation and
long-term growth of capital, the Global Income Builder
Fund will normally invest its assets primarily in common
stocks of U.S. and foreign companies that offer attractive
dividend yields and a range of fixed income instruments,
including high-yield, below investment grade (commonly
referred to as ‘‘junk bonds’’), investment grade and
sovereign debt, from markets in the United States and
multiple countries around the world.
Investment decisions for the Global Income Builder Fund
are made without regard to the capitalization (size) of the
companies in which it invests. The Global Income Builder
Fund may invest in any size company, including large,
medium and smaller companies. Under normal
circumstances, the Global Income Builder Fund
anticipates it will allocate a substantial amount of its total
assets to income-producing securities. That generally
means that approximately 80% or more of the Global
Income Builder Fund’s total assets will be allocated to
such investments, which may include dividend paying
equities, both high-yield (below investment grade) and
investment grade debt, sovereign bonds, and various
short-term debt instruments. The Fund may invest in
securities with any investment rating, as well as unrated
securities. The Fund may also invest (typically for hedging
purposes) in derivative instruments such as options,
futures contracts and options on futures contracts, credit
default swaps, and swaps and options on indices.
The investment philosophy and strategy of the Global
Income Builder Fund can be broadly characterized as a
‘‘value’’ approach, as it seeks a ‘‘margin of safety’’ in each
investment purchase with the goal being to avoid
permanent impairment of capital (as opposed to
temporary losses in share value relating to shifting
investor sentiment or other normal share price volatility).

I would suggest to putt tax-free income investments and low turn-over equities in your taxable account, and put your bond funds in your retirement accounts. Check the capital loss carryforwards (or gains exposure) for your equity funds. Many still have large losses that they are carrying so cap gains may not be an issue for a while.
Do you have a brokerage account for your retirement funds? If you're happy with them, keep it simple and stick with them. Many brokerages also have various fee breakpoints or premium service for meeting certain combined asset levels, so putting all the money in once place could be advantageous.
I have accounts at both Fidelity and Schwab and am very happy with both. Their websites are useful and easy to use, and their customer service is good. Scottrade has a good NTF mutual fund selection and their transaction fees for the non-ntf is reasonable, but their website isn't great.

Generally speaking, if the gains from a fund (any kind of fund) are tax-free, you'd want those funds in your taxable account, as this of course avoids paying tax on those gains.
It's been years since I've had a brokerage account, although at the moment I am looking at Schwab with respect to that. All of my dealings for many years have been directly with fund families themselves, so I can't be of much help on a brokerage house, but I'm sure you'll hear from lots of others on that issue.