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..... Speaking of looking around ! I can with clarity. I note this as I have had a 2nd eye lens implant within a month's time. Don't know about the sometimes discussed "all seeing" third eye. That one seems to be without problems most of the time...:):):) Back to the lens implant to discard the cataract burdened eyes. Will these procedures help with investments decisions? I can not say at this time; but the previous frustration with the ability to properly see all that we should read regarding investments surely must become a positive. I had chosen to write this week regarding this surgery and technology; but this will have to find another day. A small side effect of the numerous eye drops I must use for several weeks, four times a day; is drowsiness. This should only be a concern for this next week. None the less, further notes about investments with this write are at the near limit. I have added a few blips related to our portfolio and market observations at the below SELLs/BUYs and Portfolio Thoughts.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
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
SELLs/BUYs THIS PAST WEEK:

---All of FCVSX, FFGCX and a portion of FSAGX were sold and the proceeds moved to FTBFX. May in March? Okay, you're asking why these? Fair question, indeed. FCVSX and FFGCX have had decent runs, and nice YTD's. FSAGX is a bit more on the rocky path right now. Our house is not assured that there are not more investment sparks nearby; which may continue upward pressure on the $ which would likely surpress commodities and the metals. The same applies to the convertible securities sector; although our other equity holdings would also be exposed to down moves. We don't move monies around very often; and we may be off the track with these changes, but this is where we are for now.
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 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 3.1% - .21 week
PRPFX ....YTD = + 6.1% - .43 week
SIRRX .....YTD = + 1.8% + .0 week
HSTRX ....YTD = + .49% - .32 week
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a - .18 % move this past week. Greece may be given the old credit card rework; but all of the holders of debt are still in place; just wearing bond clothing made of a different fabric. Some CDS (Credit Default Swaps) will be trigged by losses on Greek bonds. Soon enough we will discover whether these psuedo insurance contracts written among bond holders and those stating they will cover losses are worth the electronic pages the words are noted upon. Between our Federal Reserve system and the European bank system; a form of what I will name as "halograhic" money has been formed. I suspect if one tries to touch the monies; that one's hands would merely pass through the image of what appears to be real money. These monies appear to mostly trapped within a tight circle of circulation; rotating among the central banks, the state banks and whomever may be the holders of government, state or soverign bonds. How much of this hot, halographic money is actually moving out into the consumer public is probably anyone's good guess on any given day. Where and when will all of this protective money find its landing place? So, many global and the state banks within countries are in place to note that their balance sheets are better. I don't know better than what? Also in the mix is the continued large amounts of bonds being issued by and for, everyone and his brother. One can not argue that bonds do indeed have a place in the public company sector allowing a business to raise monies for operations and/or expansion. Based upon some writings over the last six months; it appears that much of the bond issuance by emerging market governments or companies has been the result of European banks not willing or able to provide traditional loans; as their exposure to non-performing bonds is already too high; and I would suspect these banks really don't have the kind of balance sheets that one would hope for from a well capitalized bank. It appears that many of the European banks still have too much junk on the books; and they ran, did not walk for big pieces of cheap money when the ECB and friends opened up the LTRO halographic money doors, a second time at a 1% borrow rate over a 3 year period. "Such a deal I have for you"; as the old saying goes.
All of the new, cheap money would not be unlike our house having a large outstanding mortgage, the current house value being well under the remaining cost of the mortgage and being offered 2 new lines of credit against the value of the house. I take the money gladly at 1% interest and continue to pay down the mortgage. At least that is what all parties involved are hoping will happen. 'Course, in the fine print of the new credit line; one also discovers that some payment is also expected to be made against other underwater mortgages in the neighborhood. Credit, credit everywhere. Will it, the money; find its way into the public sector for spending? I sure don't know, but will presume those on the issue end sure hope so. Whether the global public continues to deleverage or spend a bit more into the economies is a most critical consideration going forward.
Bond prices at least relative to the U.S. Treasury 30 and 10 year areas have had a bit of upward yield creep over the past few weeks. The 30 year area is seeing continued downward price moves. This is not killing any broadbased bond fund holdings in my opinion; but is none the less, a movement I continue to monitor more today than six months ago. Some yet unknown days, weeks or months into the future; may find such a saturation of bonds of all flavors, that there will not be enough buyers; from either public (governments) or the private citizen. I do not know that this point would also indicate the buying of equities to replace bonds. Perhaps nothing more than a sideways and stalled equity market(s) finding the big traders swapping the ups and downs against the best laid plans of their computers algorithms. A bit like recent markets.
Enough blabber from this person...................
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.
---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"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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 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
FSAGX Fidelity Select Precious Metals
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

Is Jayme Wiggins really only turning 32 years old this year?
Mr. Wiggins returned to Intrepid Capital Management in 2010 after earning his MBA from Columbia Business School, graduating with highest honors. Mr. Wiggins was with Intrepid Capital Management for 6 years, originally joining the firm in 2002. Before leaving for business school, Mr. Wiggins managed Intrepid’s high‐yield bond portfolios from 2005 to 2008 and the Intrepid Income Fund (ICMYX) from inception. Prior to this, Mr. Wiggins served as a small cap analyst from 2002 to 2005. Mr. Wiggins graduated summa cum laude from Stetson University where he earned a BBA in Finance in 2002.
http://intrepidcapitalfunds.com/media/PR_081010.pdf

Howdy Ted,
What is Off-Topic? What is an area that is not directly related to funds; but may be Off-Topic, yet may be of great value in protecting one's assets?
Do you consider events related to the Euro problems or actions of the Fed. or Treasury to not have an impact upon our investments?
What about discussions regarding the possible changes coming to tax policies upon capital gains and dividends? Would this not affect your portfolio; or at least your portfolio positioning? Do you think if this noted area of taxation does change for the worse; that this may impact equity market selling at the end of 2012?
Has there been any subject matter in Off-Topic from which you have benefited from the information?
The "ignore" the Off-Topic" is always a choice, eh?
I would like to know the answers.
Regards,
Catch

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..... I know you know, those little steel balls in the handheld games where one tilts and moves the flat base around to drop the balls into holes, or pass through a maze or some other quest. You may have one of these stashed away in a drawer at home. Well, I envison such a game from time to time and presume my game board and the holes represent investment choices. There are 20 holes in the base board representing the investment sector choices; but there are only 10 steel balls. Hey, I can do this with enough time, practice and experience. Cool, I got the balls into the holes of choice. Whoops, who bumped my board? Ah, that's it. While I slept, someone else was messing around with my game board. As you may assume by now; after placing the steel balls into the investment sector holes of my choice; I find during one practice event with the board, the sensation of other hands also attempting to move the board. Now this hole alignment thing is hard enough; let alone another set of hands trying to override my moves. I'm sure your understand my connective note about this board game and the others who are also playing with our game; even while we sleep. Keep your thinking caps in place, be patient and continue to assess your own risk and reward behaviors. There always will be others who are messing around with your game.
#72 There also exists rules 69 and 70. These, of course; are the simple, quick and dirt methods using head math to rough guage investment return rates; although these may be used for other caluclations, too. I know some here question why I would bother with such a note about the rule of 72. I will note that there have been more than enough adults whom I have encountered over the years who have never heard of the rule; so I will assume this may apply here, too; and that I/we have no way of knowing how many first time and young investors may be reading through the posts here at MFO. The number 72 has many of the easy factor numbers from multiplication that most folks learn in the 4th grade. So, one conjures that their portfolio is able to return about 6%/year with proper management. How long before one may be close to doubling their monies, from a set value? Divide 72 by 6 (annual % return); and one finds about 12 years are required to double the worth of the original investment dollars. Now, if one is really good with money; and gathers returns of 35%/year; the money will double in worth in just about 2 years. Okay, enough for this.
Sideways, with a twist. This is what our current portfolio could be named. A little bit of this and a little bit of that, with a yield average of about 4.7%; awaiting to find if there is more than sideways markets in our near future, and where and what may be the sectors.
Well, just some out loud thinking and writing.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
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
SELLs/BUYs THIS PAST WEEK:
NONE
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 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 3.3% + .4 week
PRPFX ....YTD = + 6.6% - 1.3 week
SIRRX .....YTD = + 1.5% + .3 week
HSTRX ....YTD = + .81% + .2 week
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a + .34 % move this past week. A M* returns list I really like. Click the link just below.
http://news.morningstar.com/index/indexReturn.html?msection=IdxReturns
Many equity markets were just kinda hanging around this week; with the exception of the U.S. small/mid cap area, which received a slight haircut. Treasury yields still indicate a bit of an edge for some investors; or at the very least a parking spot for some extra cash. Yields in most Treasury durations ended the week in the down range, with prices reflected upward. The old Funds Boat is at anchor, riding in the small waves; watching the weather and keeping the existing cargo. 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.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
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"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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 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)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
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

Hi msf,
I should have had that extra cup of coffee. You are correct. I reversed my fee numbers between the old and new VA accts offered at Fidelity.
And has been mentioned, and too which I agree; there may be a place for using the Fido VA's when other avenues are not available.
The current list of funds (54) does provide a fairly decent choice of investments.
I have not looked at all of the funds for ER; but a quick glance and guess would indicate about a 1% average ER.
Our current retirement accts holdings ER average is .70%; and we know there are numerous folks who are paying much higher than 1%, especially if also paying adviser fees.
Anyhoo, if I was using the Fido VA; I suppose I would prefer to take my chances of compounding the non-taxed earnings each year; versus the monies being taxed at current rates for cap gains and dividends. Maybe a coin toss for the winning totals at the end, eh?
Thank you for your input, msf.
Regards,
Catch

Agree with others that VA should not be used before some other forms of tax-sheltered investments (notably IRAs and defined contribution plans).
Catch - I think that what you were looking at was the older VA that Fidelity used to offer - Retirement Reserves. This had an 80 basis pt wrapper (it was originally 100 basis pts when it firts launched), plus underlying fund fees, and insured return of premium. The current plan, Personal Retirement Annuity, costs 25 basis points plus underlying fund fees. It is still technically insurance, and guarantees return of accumulated value (i.e. what you've currently got in the underlying funds). Now to you and to me, that doesn't sound like any insurance at all, yet it's treated as insurance, and thus regulated on the state level and not by the SEC.
A VA is like a cross between a non-deductible IRA and a 401k plan, taking the worst attributes of both. Like the non-deductible IRA you get no immediate tax benefit, and capital gains are transmuted into ordinary income. Like the 401K, you investment options are limited to what's in the plan. The calculations on whether it pays (after exhausting other options) are very similar to deciding whether a non-deductible IRA makes sense. And the answer is: sometimes, but generally only if you'll have money in it for decades. (Otherwise, the transmutation of cap gains into ordinary income costs more than the tax sheltering saves.)
Finally, note that there's nothing about "variable annuity" that says "deferred". There are immediate VAs, and given the low interest rate environment we're in, might even make more sense than the traditional (fixed) immediate annuity.

I was also concerned that this article didn't provide the big picture. If I were a professional writer; I surely would have provided as much detail as possible with a full list of the pro's and con's. My write will also not provide the big picture; but there are circumstances and some VA's that may provide another avenue for some investors.
---The tax status is not an invalid consideration, considering an ordinary income tax burden on withdrawals from a VA. A presumption would have to exist indicating that an investor would be able to operate a very tax efficient portfolio outside of the VA shelter to have a lower tax burden.
---Along this same line, the tax burden mentioned regarding lower dividend and captial gains tax rates on non-VA sheltered monies. This may true today, but these tax rates may be gone at the end of this year. True, this is an unknown; but is in place to change.
---As msf noted regarding fees; well, fees may be every which way depending upon what one may desire from a VA. Fidelity offers 54 fund choices within their VA accounts. There may have been some small chances since I reviewed this area last year; but this is a snippet from what I recall from a year ago: One would pay the the expense of whichever fund and an additional .25%. A fund with an ER of .75% added with the VA fee would =1% total fees. Today, with a quick look; I find indicated for the Fidelity funds within the VA to indicate what appears to be a flat fee of .80%. I don't know if this is a change from last year or not; and currently do not have the time for further investigation. Also, with a Fido VA; one is restricted to 4 round trip fund exchanges per year.
NOTE: the Fidelity VA account is not an insurance policy type of investment, so does not include an insurance guarantee or related as may be found with traditional VA products issued through a full blown insurance vendor. Also, there is not the traditional penalty period for withdrawals as is common with most VA accounts. So, if one pulls their monies within 1 year, there is not the common 7% penalty fee in place.
---I am not a fan of, or would recommend a traditional VA to many folks; I also am not a tax attorney, so there may be items related to taxes that would have to be sorted out by a professional dealing in taxes.
Just my inflation adjusted 2 cents worth.
Regards,
Catch

Reply to @Anonymous: I'm usually not in cash but have been increasingly moving in that direction. While many have predicted a continued rise due to election year, etc, that's not always the case. Additionally, geopolitical issues (Iran, China, Russia) could become a serious issue. I primarily sold a number of smaller-mid sized satellite positions, such as the SOIL and BRAQ etfs.
Looking long term/over the horizon, I do believe there will be considerable inflation and I do want to be in stocks (especially some specific sectors.) That said, I just think the market feels way too complacent. Retail money may move out of fixed income into stocks, but I don't know - I think a lot of people in fixed income are in fixed income.
There was a line in David's commentary about how the long bond would do if interest rates normalize - I'd be curious if 100 average investors (people who don't do a lot of research and essentially "check boxes" on their 401k, not that I'm saying anything against it, but just saying people who don't research their investments in detail) were polled as to whether they were aware if that would be the result if interest rates normalize or not.
Essentially, if people were told this: " Tim Krochuk of GRT Capital Partners volunteers the same observation in a conversation this week. “If rates return to normal – 4 or 5% – holders of long bonds are going to lose 40 – 50%. If you thought that a 40% stock market fall led to blood in the streets, wait until you see what happens after a hit that big in retirees’ ‘safe’ portfolios.” Folks from Roger Ibbotson to Teresa Kong have, this week, shared similar concerns."
How many would go, "But I thought bonds were safe?"
So, I do want to be in equities (funds, stocks, etfs, whatever), but I do think there will be better opportunities.

Howdy David,
I peeked at Fund Reveal several days ago; and am curious as to the forthcoming MFO write regarding this site. Obviously, over the years and with the expansion of the internet; one may find 1,000's of investment wisdom sites that express "their" system is the best to maximize one's investment gains.
I remain open to finding a site with positive trackable results; knowing many sites use their own modeling criteria and perhaps a touch of the human element thrown into the mix.
Regards,
Catch

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..... Tinker: the archaic meaning generally reflects to a person who traveled the road and repaired household utensils....metal pots and pans and related. The older reference also indicates a person of the poor working class and uneducated. However, one must consider that this work required a broad-based knowledge of many areas; as one may consider that such a person was also employed to perform many other types of repairs while in the community or at a household. The tinkerer was only uneducated in some areas; not unlike the broad citizenery now. Today, many consider the word to also have the meaning: "To exert one's self for a purpose; to put forth effort for the attainment of an object; to labor; to be engaged in the performance of a task, a duty, or the like." While one's skill set may not be in a particular area of effort; we may still "tinker" around with something; be it planting flowers in the springtime of the year around the house, simple painting of the interior or exterior of the home or simple repairs around the household; be it replacing this or that or a repair of the lawnmower. While these areas may not be our primary knowledge area; we are bright enough to read and consider whether the task is within grasp of the efforts to attain a "decent" outcome; or whether to leave the circumstance to those skilled in the task; to hire someone.
This reflection upon tinker, reminds me of myself and others; we individual investors.
Although I do not know the composition of other's portfolios; I do assume there is "tinkering" in place; now and then.
This brings me to a recurring thought about portfolio tinkering at this house. Some days, tinkering is a lot of fun and one is always learning something. Our house doesn't tinker very much, with only a few funds changing in a year's time. This brings me to the active managed/traditional vs the eft fund. I will note a few quick and dirty numbers; although these eft's would not be my primary choices. Starting with year 2006 and including 2011 returns for these two eft's; VTI and BND , and one having 50% in each, the average return over this period = +3.35%. Our portfolio over the same time period average = +6.4%. To be fair about this compare; VTI is U.S. equity based and had a - 37% in 2008. We sold 84% of our equity portfolio in mid-June of 2008. Obviously, these two holdings views are not twins in construction; and the VTI and BND are indicated with a buy and hold position maintained.
As 1/3 of our account holdings are currently with Fidelity; we have access to 30 etf's that provide nominal exposure to numerous market sectors; and the price is right, too. Beyond this, the brokerage function of the accounts offer whatever etf we may choose, although at a higher cost (trading fees).
The next question this house must answer is whether we may provide similar results as in the past, using etf's for this function. Are we able to find and/or manage etf's that would replace managed mutual funds; several of which, have management skills with which we are most satisfied. Could we be more skilled than the management of FNMIX ? Or FLPSX ? Might it be just as easy and with acceptable results to hold TIP versus FINPX ? I am not assured of this. Even for monies invested in gov't tips bonds, active managers may move among the durations as they feel indicated. We could try to provide a similar exposure using STPZ LTPZ and TIP . Yow......too much work there, eh?
Another question. Would this house become more "twitchy" about moving monies around more frequently? We have not been a house which flips funds often, and we suspect this temperment would be maintained. Although one must consider the low cost of flipping among some etf's.
The question that becomes presented is whether to gather a basket of 12-15 etfs to attempt to match our holdings at any given time. At the very least, we could gather .30-.40% of reduced fund expense fees. M* indicates our current average expense ratio of .70%.
A fling it "here and there" could include lg cap, mid cap, sm cap of a blended and domestic/international flavor. Bond styles could be mix and/or matched to one's choices. Special sectors may be thrown in to suit one's market thoughts or trends. And no, I don't think this house would be or become a "lazy portfolio" of buy and hold. Although some statistics indicate a reversion to the mean for a given market area over time; I know we would still practice our own form of "reversion to our own mean"; attempting to minimize the downside and preserve capital. Time is not in this house's favor. Now if we were 30 years old again..............
A result into the future may be a mix of active managed funds and eft's, or perhaps an index here and there, too.
Well, just some out loud thinking and writing.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
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
SELLs/BUYs THIS PAST WEEK:
NONE
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 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 2.9%
PRPFX ....YTD = + 7.9%
SIRRX .....YTD = + 1.5%
HSTRX ....YTD = + .60%
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a + .62 % move this past week. The old Funds Boat is at anchor, riding in the small waves; watching the weather and keeping the existing cargo. 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.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
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"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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 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)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
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

Something to consider: DBLTX has 8% yield, and it is less sensitive to the possible growth of interest rates. DBLFX, RNSIX, and ADLIX have smaller yield, greater duration, and grow in part because of the capital gains. I am not a bond expert, but I suspect that when Fed will start rising rates (maybe not soon), these funds will be more vulnerable. Of course, at that time they may change their profile...

http://www.sec.gov/Archives/edgar/data/1370177/000137017712000004/rnf497.htm
RIVERNORTH FUNDS
RiverNorth/DoubleLine Strategic Income Fund
(Class I Ticker Symbol: RNSIX)
(Class R Ticker Symbol: RNDLX)
SUPPLEMENT TO PROSPECTUSES DATED FEBRUARY 1, 2012
Effective after March 30, 2012, the RiverNorth/DoubleLine Strategic Income Fund (the "Fund") is closed to new investors. Unless you fit into one of the investor categories described below, you may not invest in the Fund.
You may purchase Fund shares through your existing Fund account and reinvest dividends and capital gains in the Fund if you are:
·
A current Fund shareholder as of March 30, 2012;
·
An investor who has previously entered into a letter of intent with the Fund or RiverNorth Capital Management, LLC prior to March 30, 2012;
·
A participant in a qualified defined contribution retirement plan that offers the Fund as an investment option as of March 30, 2012;
·
A wrap fee program or financial advisory firm charging asset-based fees with existing accounts as of March 30, 2012 purchasing shares on behalf of new and existing clients; or
·
A client who maintains a managed account with RiverNorth Capital Management, LLC
Except as otherwise noted, these restrictions apply to investments made directly with the RiverNorth/DoubleLine Strategic Income Fund through its Transfer Agent and investments made through financial institutions and/or intermediaries. Once an account is closed, additional investments will not be accepted unless you are one of the investors listed above. Investors may be required to demonstrate eligibility to purchase shares of the Fund before an investment is accepted. Management reserves the right to (i) make additional exceptions that, in its judgment, do not adversely affect its ability to manage the Fund, (ii) reject any investment or refuse any exception, including those detailed above, that it believes will adversely affect its ability to manage the Fund, and (iii) close and re-open the Fund to new or existing shareholders at any time.
In addition, it should be noted on page 8 of the current prospectus, that because of different class level expenses, the returns for the Class R shares are lower than the returns of the Class I shares which is shown in the prospectus.
Dated: February 23, 2012
RIVERNORTH FUNDS
c/o ALPS Fund Services, Inc.
1290 Broadway, Suite 1100
1-888-848-7569
Please retain this supplement with your Prospectus for future reference.

Howdy msf,
I noted about the AMT a few years back at FA; but I recall no thread action. I have reminded our elected folks in DC of this antiquated tax code; but I guess they are too busy with other work.
A note from another recent post here from me:
"Given enough time, I can make most people appear to become rich upon the basis of inflation and tax code. If the current notation of $200K in earnings and above is rich; I can get you there eventually, if I never change the $200K level in the tax code. One may consider that a young couple who have studied their butts away to earn a masters degree and still paying off the student loans wonder why the government thinks they are rich with a gross income of $201K; solely based upon the fact that they are educated and have work that demands the wages they are making. Such a tax code kills incentive to become educated and work hard, eh?"
These are surely not the best constructed words I have ever written; but the matter of the situation is related to the perversion of the AMT section of the tax code, in particular.
Not surprising that permanent adjustments do not take place in such a code; as this favors the governments coffers. This code section needs at least a permanent adjust that is tied to CPI or similar.
As to the capital gains. Well, companies are taxed and then the individual dividend recipient gets taxed and given enough time; perhaps an estate (death tax) is taxed again.
Lastly, one may expect a most lively session this year from the "lame duck" period congress. 'Course that does not mean that I expect the best of actions from congress; but perhaps some interesting situations.
Thank you again for your time and thoughts.
Take care of you and yours,
Catch

1. For any tax changes to have an impact on the demand for muni bonds, the change would have to decrease the after tax return of taxable bonds to below that of muni bonds (adjusted for the additional risk). Traditionally, munis yield about 85% of treasuries (10 year maturities). The current spread (for 10 years) is half that (1.85% vs. 2.00% is 92% ratio), so even people in a 15% bracket already benefit from munis. A higher tax rate (especially on the top end) isn't going to create more investors looking at munis (though it may make existing shoppers more motivated).
2. We see the revival of an 18% long long capital gain rate - so the increase isn't as much as this would appear, at least for buy and hold investors.
3. The real killer for the middle class (remembering that middle class investments are largely tax sheltered) is the expiration of AMT patches. If they do expire, AMT taxes are projected to hit 4/9 of taxpayers reporting $75K-$100K of income

my own note about the below Perhaps 2013 will be another very good year of the "muni bond".
David Rosenberg On Taxation-Shock-Syndrome
Submitted by Tyler Durden on 02/21/2012 22:07 -050
While nothing is more certain than death and taxes (and central bank largesse), David Rosenberg of Gluskin Sheff uncovers The Unlucky Seven major tax-related uncertainties facing households and businesses that will likely lead to multiple compression in markets (rather than the much-heralded multiple expansion 'story' which appears to have topped the talking-head charts - just above 'money on the sidelines' and 'wall of worry', as 'earnings-driven' arguments are failing on the back of this quarter). As he notes the radically changed taxation climate in 2013 and beyond will have an impact on all economic participants as they will probably opt to bolster their cash reserves in the second half of the year in preparation for the proverbial rainy day.
First, the top marginal personal tax rate rises to 39.6% from 35% as the Bush tax cuts expire at the end of 2012.
Second, a limit on itemized deductions will add a further 1.2 percentage points to the top rate.
Third, a new 0.9% Medicare tax on incomes over $200,000 gets imposed ($250,000 for joint filers).
Fourth, the top 15% rate on long-term capital gains rises to 20%.
Fifth, dividends will once again be taxed at ordinary rates — 39.6% for the top income earners.
Sixth, a new 3.8% tax on investment income gets introduced for incomes over $200,000 ($250.000 for joint filers).
Seventh, the top estate tax rate goes from 35% to 55% (60% in some cases). The estate tax exemption falls to $1 million from $5 million (the gift-tax exemption also drops to $1 million and the rate adjusts hither to 55%).
Forty-one separate tax provisions expire this year — see page 32 of the Economist. Of course, there is always the chance that after the November 6th election, a Congress that can never seem to allow anything temporary to meet its expiry date will pass an extension — for more on all this, see More Uncertainty for 2013 on page B9 of the Weekend WSJ.
NOTE: click image to start and click again at start to open to a full window, if you choose to follow the lyric

I'd like to allocate a portion of my portfolio to Mebane Faber's Ivy Portfolio with the 10 month SMA rule (move each asset class to cash when it drops below 10 month SMA). The problem with this strategy is that outside of a tax-advantaged account there will be constant short and long term capital gains (and possibly losses to be fair). I'm wondering for instance if there are any ETFs that use this strategy (or something quite similar) because I believe if it's in the form of an ETF it won't generate the constant taxable gains.

Howdy Anonymous OD,
I must state that I appreciate the discussion. We may or may not agree on some points; but I am always open to learning, too.
Note: >>>>> = my reply
First of all if you read Rodriguez's speech, you would know that the specific "entitlements" he and I are referring to are Social Security and Medicare. He states as much. Second, I would be willing to bet a decent sum that you or someone in your family or some of your friends or their families have received such entitlement benefits as Social Security and Medicare in the past or are receiving them today. Are they a waste of taxpayer dollars? I don't think so. They keep elderly people alive. And yet they account for a huge portion of government spending.
>>>>> Yes, I know of numerous folks who have or are using SS or Medicare. And I agree that these monies do indeed generate many other jobs and the monies do flow back into the economy. I will be in the Medicare camp this year; and if I play the investment cards properly, won't be using SS until age 70.
So how can your thesis that government spending is all wasteful and inefficient be true? As for economic stimulus goes, you say if more tax dollars are collected the government will just waste it and that it will stymie economic growth.
>>>>>I believe I stated along the lines of there being too much government spending that has been and is wasteful and very inefficient. I stated that there are items better suited to some government levels. Quick examples would be EMS, police, fire and related.
Since you are on this board, I will presume you have heard of the economic term called "the multiplier effect." Anyone familiar with the multiplier effect knows that this neocon canard that "the government can't create jobs" and "can't stimulate economic growth" is bogus. If the government collects taxes to pay for programs such as Medicare and Social Security well those Medicare and Social Security dollars are injected back into the economy and are economically stimulative. Elderly people collect their Social Security checks and buy groceries, etc. and that stimulates the economy. In fact, if the government takes tax dollars and uses it to build a road that is far better than say just allowing some wealthy person to keep his assets via a lower tax rate because building the road is definitely investing money in America.
Fully agree with projects such as upgrading the existing interstate highway system. I was a young boy when I-75 came in place in Michigan and I watched the big D-8 cats flatten a wonderful wild strawberry patch....another story. On the other hand, does the state of Florida need a high speed rail system between the cities of Tampa and Orlando? I don't think this is wise spending of monies.
Meanwhile, a wealthy person who keeps his assets might just use that money to buy a foreign made Mercedes or buy a villa in Italy or abscond with the money to the Cayman Islands. There's no guarantee that the money will be circulated back in the U.S. economy.
>>>>>I won't disagree with this. 'Course they may also buy a "beemer" made in the Carolina's. But, yes; there has been and continues to be the funny and cute little things that the ultra wealthy do; that are beyond our abilities.
As for waste and inefficiency, you seem so eager to point to waste in the public government sector, but make no mention of waste in the private sector. If you think the government is such a big destroyer of capital, what do you think of Enron, Worldcom, Adelphia Communications, AIG, Lehman Brothers, Bank of America, Countrywide, etc. Need I go on?
>>>>>I've worked for very small and very large public and private businesses over my years. The ones that are operated in an efficient manner are far and few. Sadly, with one organization of which I have long employment; the last president of the company who really cared, and really knew and wanted to know what was going on in the company beyond his office door, was in 1990. He would travel to all states and have meetings with the regular folks. That is all gone now, of course. It is a wonder some companies make a decent profit.
In fact, most would argue that we wouldn't be in this current economic mess were not for the misdeeds of certain elements in the private banking sector.
Won't disagree with this. Should already be many more prosecutions for misdeeds.
But finally and most important, none of what you're saying actually addresses my initial point--that analyzing the U.S.'s financial condition based on a debt to GDP ratio is shoddy incomplete financial analysis, that it's like looking at a companies revenue and total debt without considering the company's assets, interest payments as opposed to total debt or the maturities and nature of the debt. Nor does analyze the company's abilities to increase revenues to pay down the debt--in this case the ability to raise taxes on ample assets. If an analyst at FPA working for Rodriguez gave such a shoddy incomplete analysis of an individual company's financial condition, he would be raked over the coals. But because such an analysis serves Rodriguez's political and rhetorical ends, it is acceptable to him it seems. Why not really look at the debt as deeply as he does for companies?
>>>>> I did not address this area with your original write. I was most short of time earlier today. As I am not formally schooled in economics, I can not provide a likely, proper answer for the debt/GDP view. I would expect, however; than any number of skilled economists may have varied opinions about this topic. As to the measurement, I will suspect that for some economists, is the ability of a growing GDP to have the ability to continue to pay the debt the may be expanding faster than the GDP. This would apply in this case, as to the interest due now and growing. Greece would be a primary example of the likely inability of the country to have anythling more than an orderly default; as one may have a difficult task of finding their GDP growing at a rate to pay only the interest upon the debt.
As to the taxes upon estates and related in your original note; I find no faith or will in the current federal government actions to become efficient. Per the current "debt-clock", the debt burden per person is about $140K. I don't find how higher taxes will relieve any fiscal situations; other than the transfer of wealth via taxes to remove the discretionary spending of the citizen. I will note that current tax laws are out of whack, in my opinion; and favorable tax policies do exist that cause some serious misalignments.
Am ultimate tax package could set a 10% tax on all wages, capital gains/dividends and related; no hidden accounts.... blah, blah, blah. The tax would be adjusted for inflation via the CPI or 1.5% annually, which ever is lower. Eventually, the tax rate would rise to such a high level, that spending would stop; deflation would take place and all would be happy. Federal and state spending could not rise above 10% from a preset earlier level; without legislative language for a fix and reduction. If this could not be performed, the matter would have to be voted upon with a general, national election upon the matter.
Well, that is my "tongue in cheek" view of the tax jungle.
Take care,
Catch

Catch,
First of all if you read Rodriguez's speech, you would know that the specific "entitlements" he and I are referring to are Social Security and Medicare. He states as much. Second, I would be willing to bet a decent sum that you or someone in your family or some of your friends or their families have received such entitlement benefits as Social Security and Medicare in the past or are receiving them today. Are they a waste of taxpayer dollars? I don't think so. They keep elderly people alive. And yet they account for a huge portion of government spending. So how can your thesis that government spending is all wasteful and inefficient be true? As for economic stimulus goes, you say if more tax dollars are collected the government will just waste it and that it will stymie economic growth. Since you are on this board, I will presume you have heard of the economic term called "the multiplier effect." Anyone familiar with the multiplier effect knows that this neocon canard that "the government can't create jobs" and "can't stimulate economic growth" is bogus. If the government collects taxes to pay for programs such as Medicare and Social Security well those Medicare and Social Security dollars are injected back into the economy and are economically stimulative. Elderly people collect their Social Security checks and buy groceries, etc. and that stimulates the economy. In fact, if the government takes tax dollars and uses it to build a road that is far better than say just allowing some wealthy person to keep his assets via a lower tax rate because building the road is definitely investing money in America. Meanwhile, a wealthy person who keeps his assets might just use that money to buy a foreign made Mercedes or buy a villa in Italy or abscond with the money to the Cayman Islands. There's no guarantee that the money will be circulated back in the U.S. economy. As for waste and inefficiency, you seem so eager to point to waste in the public government sector, but make no mention of waste in the private sector. If you think the government is such a big destroyer of capital, what do you think of Enron, Worldcom, Adelphia Communications, AIG, Lehman Brothers, Bank of America, Countrywide, etc. Need I go on? In fact, most would argue that we wouldn't be in this current economic mess were not for the misdeeds of certain elements in the private banking sector. But finally and most important, none of what you're saying actually addresses my initial point--that analyzing the U.S.'s financial condition based on a debt to GDP ratio is shoddy incomplete financial analysis, that it's like looking at a companies revenue and total debt without considering the company's assets, interest payments as opposed to total debt or the maturities and nature of the debt. Nor does analyze the company's abilities to increase revenues to pay down the debt--in this case the ability to raise taxes on ample assets. If an analyst at FPA working for Rodriguez gave such a shoddy incomplete analysis of an individual company's financial condition, he would be raked over the coals. But because such an analysis serves Rodriguez's political and rhetorical ends, it is acceptable to him it seems. Why not really look at the debt as deeply as he does for companies?

Howdy Anonymous OD:
You note: "A debt to GDP analysis ignores the fact that while the liability side of America's balance sheet has grown enormous so have its assets. There is immense wealth in America--well over $60 trillion--part of which could be used to pay down that debt gradually over time if capital gains, income and estate taxes weren't close to as low as they ever have been in the last 70 years. Rodriguez completely ignores this fact to attack entitlements and say they must be cut to save the nation. He never even mentions that maybe taxes should go up. "
>>>>> liability side The liability is in the current low interest rate environment. Wait until interest rates increase and the "minimum payment" due on the old credit card moves to newer highs.
>>>>>$60 trillion $60 trillion of what and from what time period? Part of which could be used to pay down the debt??? I presume that you consider that if each and every American paid their fair share of the reported $140 K liability of Federal debt burden; that the D.C. machine would reform and not piss any new money down the drain, eh? What would be a fair amount of monies to tax in the form of capital gains, income and estate taxes? And from whom would these monies arrive? Do you consider that any monies the taxing authority(s) choose to remove from the public are monies that are not spent into the economy? Where is the breaking point of no returns to this action? When governments choose to tax and spend; the consideration of enlightened spending must be a consideration that the government knows best of how to allocate the monies. Yes, there are functions of which a well run and efficient government is better able to provide for the citizens with a scale of volume. One may suspect that this type of government is only written about in books of theory.
>>>>>attack entitlements This covers a lot of ground. Which entitlements? Home mortgage deduction, child care credits, minimum earned income credit? Don't forget the almost tax free status of muni bond investments. Even retirement programs (401k's and related) are entitlements, eh? Lets get rid of those, too.
Too many in D.C. do the wrong things for the wrong reasons. How about the "clean energy" machine? Ethanol fuel? Oh, ya...........a real gem there. It requires more energy to produce, versus the benefit received. One may suppose a few new and temporary jobs have been created. Could or would you or I start such an operation based upon the merits of such an investment? I would not at this time.
In summary to your notes. Some group of folks need to pay more to operate the "monetary sink hole" in DC. Lets see: it is reported that about 50% of taxpayers pay no taxes, and the ultra rich don't pay as much as joe and jill sixpack. That only leaves what remains of a psuedo middle class. Given enough time, I can make most people appear to become rich upon the basis of inflation and tax code. If the current notation of $200K in earnings and above is rich; I can get you there eventually, if I never change the $200K level in the tax code. One may consider that a young couple who have studied their butts away to earn a masters degree and still paying off the student loans wonder why the government thinks they are rich with a gross income of $201K; solely based upon the fact that they are educated and have work that demands the wages they are making. Such a tax code kills incentive to become educated and work hard, eh? Our house is not rich, but I know our state and federal governments think we are today. 'Course they don't understand that we have to plan for the future and increased spending by our household. I am 64 years young. I have worked since I was 8 years old. I was pulled into a political war for 4 years of my young adult life. My spouse and I have been very prudent with our budget over the years; and those licking their chops over tax revenues of the boomer generation have a plan to grab a vast amount of wealth of this generation. This is money that will not be spent into the economy.
As you are here at MFO, I must presume you have interest in growing your invested monies. I will suggest that you should not work harder, or get more education or have monies in a 401k, 403b or IRA. Just spent the money now and enjoy. Don't even think about buying a home. In the end, your government will just take it all away from you. Why bother, eh?
Be totally aware of the flim-flam folks who speak with forked tongues and from both sides of their mouths in the "land of DC". Sadly, many "don't know, that they don't know". The blissfulness of ignorance.
Regards,
Catch

Again, a very good read.
More excerpts from the OP speech:
***
The final member of this trio of fiscal misfits is our own United States. Exhibit 5 below shows that U.S. total debt to GDP is nearly 350%, and this is before taking into account off balance sheet entitlement liabilities and guarantees that would bring it to more than 500%.
{...}
I have been highly critical of our nation's fiscal policies and budgetary trends for years. Both political parties disgust me because of their incredible fiscal ineptitude and unwillingness to be truthful with the American people. A chaotic future will be the result if our representatives continue to fail at their fiscal restructuring responsibilities. It is easy for me to speak of Europe and Japan in cold clinical terms, but not the U.S.; this is home and our nation's fiscal mess is like a life threatening cancer that is not being treated.
{...}
I believe 2013 is the most crucial year, of the past 80 years, for fiscal budgetary reform and the potential of new health entitlements makes a grand bargain more difficult to attain. Success or failure in this process will determine this nation's economic stability in the next decade.
{...}
Finally, tax reform is desperately needed. The following exhibit demonstrates, in a quantitative fashion, how the U.S. tax code has grown and become totally bazaar at nearly 72,000 pages and has nearly tripled since 1984.
{...}
If credible and material fiscal reforms are not implemented by the end of 2013, I fear that, between 2014 and 2016, this nation will confront a crisis similar to that of Europe. Time is running out because, starting in 2018 and continuing through 2024, various entitlement trust funds will be either depleted or beginning the process of liquidation. Budgetary financial pressures will explode.
{...}
Every additional year wasted beyond 2013 will increase the size and scope of the necessary fiscal response; furthermore, negative capital market reactions are more likely. Congress and the president should not become complacent, given today's low Treasury yields. Without reform, this is only a temporary calm before a much larger storm.
{...}
My bond market view is worse. Exhibit 8 on the next page demonstrates how much risk, and little return, there is if interest rates rise by 100 basis points in one year for the Barclays Aggregate Index.
{...}
Without a material improvement in the fiscal outlook, these low rates should prove to be unsustainable. Remember the suddenness and magnitude of the interest rate rise for Italian and Spanish ten-year sovereign bond yields this past year. Over the next decade, I expect low single-digit to negative total returns for intermediate and long-term bonds.
{...}
In stocks, we are cautious -- defensive but opportunistic.