What Happened to Diversification? (CathyG) Thanks, MJG, for your very interesting comments and links. I LOVE the Merriman chart showing hypothetical 40 years of returns (with Annualized Return for each) under different asset allocations! 100% Equity is the winner over that period of time with 12.4%, so it seems that, if one has 40+ years before retirement (and the nerve to hold on to them during the down years), that would result in best gains.
But for those of us that don't need those kind of returns, the 7.5%-8.2% (10% to 20%Equity) asset allocation (with far less downturns) sounds good enough for me - especially since I'm not likely to be around in 40 years (at least I hope not).
I have been "acclimating" myself with my 11%+ in low, med and higher risk equity funds (YACKX, APPLX, ICMAX, FSCRX), as well as VERY small positions in commodities, precious metals, real estate and natural resources. I wanted to get more used to the much larger ups and downs of these without letting it bother me - so far so good for most.
I am familiar with RiskGrades, and am sorry to see it go. Though their total Risk Grade for the funds I kept track of missed quite a few times, they have some very interesting other rating criteria that I haven't found on any other site.
I do find statistics interesting - and comforting - even though I am fully aware that "past performance.....". I created Excel charts for each fund I was seriously considering using statistics from M*, Yahoo Finance, GoogleFinance, MarketWatch, RiskGrades and MaxFund (another very interesting site). I included columns for each containing lots of data (like 3, 5, 10 yr return, #years up/down, best and worst 3months and 1 year, how performed last bear and bull markets, 5 year after tax, Lipper ratings, expense ratio and 5 yr cost per 10k, yield, risk and return vs categ, ytd to 5 yr rank, MaxFund rate with Best and Worst case, then columns for every year from 1999 and every quarter performance from 2002 (entering was a lot quicker and easier than it sounds). Added at end RiskGrades Win & Lose periods 1 year to Full dates. Way overkill for most people, but I really found it interesting going up and down the columns comparing each fund for specific criteria depending upon what I am looking for.
What Happened to Diversification? (CathyG) Thanks, Matt, nice to hear from you again. I'm much more conservative than 50/50. Only have 15% or so in U.S. equity funds. Since I'm more than happy with 4% YTD and 13% 12 months return so far, I don't need to go for higher gains - am just hoping to keep 5%+ annual after what I expect to be a strong market change downwarn.
Cathy
What Happened to Diversification? (CathyG) Thanks so much, Scott, for your continuing great responses! Always informative and interesting.
I don't think I'm ready for the London market yet. I sold SCPZF quite a while ago - but only because M* wouldn't track continuing gains/losses so threw off my totals. Had only a small amount, but made a nice gain on what I had - thanks!
I'll check out GTAA, MERFX, Pimco Fundamental and AQRNX, as well as the Rivernorth fund. I'm not looking for large gains with this part of my investements - instead just hoping for 4%+ annual IN DOWN markets where I can be pretty sure the fund will go UP when stock markets go down. Hard to tell how my Intermediate term bond funds will do in coming economy - but all made small gains in 2008, which is what I'm looking for in this particular case. I gave up on Hussman HSTRX - he could very well be right at some point, but really missed the boat in the last 6+ months, and it kept annoying me when this would frequently go down when market went down as well as go down when market was up. And, interesting to me, I have been quite surprised at the poor returns of the so-called "Conservative Allocation" funds - almost none that I'm tracking do well in poor markets, which I would have thought they would have some protection from.
If possible, I would just like to add to one of my existing funds mentioned above - I'm trying to narrow down the total funds for this portfolio (Mom's) to 15 or less.
Cathy
Vanguard's Fund’s Investor Shares has been lowered from $10,000 to $3,000 (lip). Vanguard Energy fund is on the list. New minimum is $3,000, down from $25,000. And it's open, unlike the Primecap funds and Capital Opportunity, which remain closed with the new $3,000 minimum.
Rono, Scott, JohnN, Ted - other gurus - Are you holding, selling, or (gasp) buying? "Own" a little of Jardine, myself, it turns out: American Funds Capital World Growth & Income (CWGIX)-
JARDINE MATHESON HLD (SINGAPORE) 9,598,800 / $427,530,552, 0.52%
Lessee now... if CWGIX is 4% of my holding, and Jardine is .52% of CWGIX, then my share of Jardine is.... not a lot, I guess.
Seriously, American Funds is a pretty conservative, almost stodgy, outfit. I suspect that makes Jardine a pretty decent bet.
A different question about everyone's holdings: Largest PRPFX Permanent Portfolio
Next Largest holdings in approximate equal holdings
FPACX FPA Crescent
PRWCX Price capital Apreciation
BERIX Berwyn Income
MAPIX Matthews Asia Div.
A different question about everyone's holdings: Largest holding is in a Trad. IRA: Matthews Asia Div. fund at 41.35% of total. I may be re-jiggering things soon. May become semi-retired before too long.
Number 2---second-largest holding: RYDVX Royce Dividend Value at 17.66% of total holdings. It's done pretty well, despite the fact that its promised dividend is a smelly, stinky, lousy, ridiculous ONE Cent. (X4/year, plus whatever cap gains there are, annually.)
A different question about everyone's holdings: Three balanced funds, each about 10 of my portfolio:
OAKBX-Oakmark Equity and Income
PRWCX-T Rowe Price Capital Apreciation
MACSX-Mathews Asia growth and Income
This fall I plan to add VWELX (Vanguard Wellington), thereby completing my own, personal "bunker" in which I will ride out the next bear market.
Cee
Rising Dividend Growth fund Hi Alex,
I'm not convinced that M* is unbiased, as it does have advertisers who are generally mutual fund companies, and I have detailed questionable objectivity by M* in the past on their forums.
Even though ICRIX and FCNTX are in different categories, clearly ICRIX has outperformed FCNTX over the past 1- and 3-year periods, and since inception of ICRIX on 3/21/2007. Furthermore, ICRIX has had lower standard deviations and higher sharpe ratios over the past 1- and 3-year periods. If I had to invest in either of these funds, I would invest in ICRIX.
If you are interested in a fund which pays relatively high income and has potential for capital appreciation, I would favor Principal Global Dividend Income (PGDIX), JPMorgan Income Builder (JNBSX), and Thornburg Investment Income Builder (TIBIX) over ICRIX, in that order of preference. As discussed on the M* forums, these funds continue to be available for reasonable minimums at Wellstrade, Fidelity, or Thinkorswim.
Kevin
Cost Basis 2011 and beyond Howdy,
Good stuff and thanks MSF. Last year scottrade made me go thru and record the cost basis for all of our taxable securities. This has been coming. The IRS wants to better track the
gains on asset sales to maximize tax receipts. It's their job.
We were lucky to get the 1099 reporting requirement repealed
http://www.bloomberg.com/news/2011-04-14/obama-signs-law-repealing-business-tax-reporting-mandate-1-.htmlHey, I dislike the increasing invasion of my privacy as much as the next person, but you either have to get the law changed (as above with the 1099) or you have to move or otherwise attempt to insulate yourself.
peace,
rono
Annual return of Bond funds. What does that include? From footnote on CEFconnect.com:
"Annualized total return ... calculation assumes that all income and
capital gains distributions by the Fund have been reinvested at net asset value (share price) on the ex dates during the period."
From State Street's sheet on SPY ETF:
"All total return figures assume reinvestment of dividend and
capital gains at net assets value; actual returns may differ."
https://www.spdrs.com/product/fund.seam?ticker=spyWith securities priced on an exchange (e.g. ETF, CEF), you have to pay special attention to whether the return figure is relative to market price or NAV price. For example, iShare's Russell 3000 (IWV) sheet gives: "Average Annualized Total Returns (NAV)." When you go to the detailed performance sheet, you see two different return figures, one based on NAV (not labeled as such, but it's Total Returns), and one based on market price (labeled Market Price Returns).
http://us.ishares.com/product_info/fund/overview/IWV.htm (info sheet - NAV based)
http://us.ishares.com/product_info/fund/performance/IWV.htmGenerally speaking, "total returns" include reinvested dividends. But to be sure, you have to check the data definition for the source of the data.
I'm less sure about stocks. Then there are HOLDRs. HOLDRs are a weird hybrid, and I won't even attempt to speak to them, except to note that they are essentially "pass through" baskets - you are regarded as the owner of the underlying stocks, you receive dividends from each of the underlying stocks separately, and the sponsor (Merrill Lynch) only allows owners to hold round lots (multiples of 100 shares). This makes reinvestment problematic, which in turn raises questions about what "total return" represents for these vehicles.
Amana - Disturbing Information (note from David at the end) Hi Lynda. Like VintageFreak says, I wouldn't sell this fund due to this article. Actually I have not read this article, but I get the gist from the dialog in the posts. If you bought the fund because of it's very good performance during the market drop and you were sold on the "non-vice" concept (which is the reason it did well), there is no reason at this point to sell. Innocent until proven guilty so to speak. Be aware though, that the Amana funds dodged the worst when the market tanked because it considers financials one of those vices.
Personally, I could care less if my fund invests in tobacco, alcohol (I like my beer), financials... if that is where the opportunities to make money are. Financials have not gone up as much as other sectors to date. They will eventually and Amana may lag.
For the record, I own Yacktman Focus YAFFX and Parnassus Eq Inc PRBLX as my large caps. I'd recommend both. So happens that PRBLX is also labeled a socially conscious fund. I own it because of it's long term record and capital protection aspects - same for Yacktman.
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