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.

Why do doomsayers like Rodriguez always focus on debt to GDP as a primary ratio to measure financial strength or weakness? That's like looking at a company's revenue and it's total debt and assuming that the principal has to be paid back tomorrow instead of just interest. It also ignores the company's assets on the balance sheet in favor of just cash flow. It seems like a facile analysis. Wouldn't it make more sense to analyze the ratio of GDP to interest payments on the debt to see if revenue is covering interest? And then look at the total assets of the nation relative to the total debt. 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.

thank you. Very informative article. Another article mentioned from 2008 time frame before the housing bubble burst.
http://www.fpafunds.com/pdfs/commentaries/Crossing_the_Rubicon.pdf
Below is a recent article on FPA Capital fund and its 40% weighing in oil.
http://www.businessweek.com/news/2012-02-16/fpa-s-bryan-tops-peers-betting-on-volatile-oil-riskless-return.html

http://fpafunds.com/pdfs/commentaries/Caution_Danger.pdf
CAUTION: DANGER AHEAD
Speech to Institute for Private Investors
By Robert L. Rodriguez, CFA
Managing Partner and CEO
February 15, 2012
*
"I hope that this brief historical review of my career should help allay fears that what follows
does not come from the likes of a perennial pessimist and doomsayer. Neither does “CAUTION:
DANGER AHEAD” spring from recent capital market volatility. Oh, No! When I left to take my
sabbatical for a year in 2010, I conveyed to my associates and clients that the current crisis was
only Phase 1, and the coming year would prove to be simply an interlude. If the nation’s unsound
fiscal policies persisted, within 3 to 7 years, it would face another financial crisis of equal or
greater magnitude, and it would emanate from the federal level. I wish I had said sovereign level,
covering all my bases, but I did not arrive at this conclusion until once away on sabbatical when
my attention and thinking shifted to the international area--European sovereign debt in particular.
Phase 2 is now beginning and I think we are on the cusp of a decade of extreme economic and
financial market turbulence. Uncertainty as to the effects of high system wide
financial leverage and the outcome of the battle to determine what the proper roll and magnitude
of government should be within an economy are key elements in this future turmoil."
"In stocks, we are cautious -- defensive but opportunistic."

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..... Today and with the past few weeks; the markets, I suspect our house may fall within the "lucky" area of investing for this 2012 year. I seldom do not have a feeling about some flow of intuition about where the monies should be, based upon our risk and reward sentiment. I find little guidance at this time. Perhaps it is just me, the phase of the moon or the doldrums one periodically encounters with any task of thinking. I recalled the lines of Clint Eastwood/Dirty Harry asking whether the punk felt lucky or not. Lucky and chance of draw to being in the right place at the right time is my best guess right now for the markets. I have placed a short list of recent items that have caught my attention. There are many other areas and items, too. I do not attempt to show the list as negative in aspect; only to a few items that are floating around and in global events. Not that there isn't always something going on in some part of the world which may affect investments.
Random thoughts, no particular order of priority:
1. Who is really doing the deal in Europe, and why?
a. ECB okay with breaking existing rules for bond holders, who may bend over and take the medicine.
b. Dear EU, take the medicine and let Greece go its own way. If you (EU) mess this up in a bad way;
many others will be in line for the same handouts. The trap is already set.
2. Some EU countries agreed to sanctions and not buy Iranian oil beginning July 1.
a. Opps, Iran announces; well, you may all bite our back side, we'll stop shipping to you, March 1.
*****update, Feb 19; Iran announces crude ship stoppage to France and England
b. Iranian sanctions are supposed to stem flow of U.S. dollars to Iran.
c. Not so fast, say some countries; we need the oil and we'll pay with gold (India reported story).
d. Iran reportedly needs grains (poor crop production) and is willing to do a swap/barter.
e. Russia smiles, a "crude" smile indeed !
f. The big, "uh-oh"; will global trades in commodities move away from a $US basis?
3. What to do about Syria? UN gives the voted hand slap; excluding China and Russia votes....uh-oh.
4. Social economists express, housing problem will be helped from the young ones and family formations.
a. Okay, but familes can not form without real and lasting employment; other than minimum wage.
b. "a", a catch22; if I have ever seen one.....
5. Cheap money, U.S., Japan and more coming in Europe, where central bank rates have to move down again.
6. Elections coming in many places; with some likely changes in "styling and profiling" by candidates.
a. one French contender states that he will undo the Euro-Pact agreements.
b. Germany......well, who knows, eh?
c. U.S.; take your best guess. Politicians, most of whom are not business oriented; but lobbied by those who are.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$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 = + 2.6%
PRPFX ....YTD = + 6.5%
SIRRX .....YTD = + 1.3%
HSTRX ....YTD = + .65%
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 + .16 % move this past week. For the better part of 2011 the investment grade bonds in our portfolios supported weakness in the equity and high yield bond holdings. The early part of this year shows a partial reversal forming; in particular since around January 17. No, investment grade bonds/funds have not become trash; but within the last month, a small sideways movement seems to be taking place. I have read this and that to find some knowledge about this; as usual one may find any number of conflicting viewpoints. Flows to many bond areas are still reported to be very large. New issues of bonds in many sectors are also very large. Perhaps a balance of money flows is meeting an issue flow. One still must consider how many big traders are watching Europe to find and know about a true agreement related to debt there. Very large holders (pension funds)of bonds will also maintain some long term positions in various bonds. Too many things in place right now to get a good feel for where equities and many bond types will be at the end of March. I note the month of March; as I feel this may begin to tell more of the story; as in theory, we may know about a resolution regarding Greece. I note this particular piece of writing to some bond sectors; but the equity sectors may be affected no less. Our house is not selling any bond funds at this time; as this area still may prove to be a smoothing factor again in 2012. I find little to convince this house that 2012 will be any less difficult to navigate than was 2011. A quick look at my words seems to find, at least for me; that I have not really written much of note. Me thinks I'm having an off-month for thinking. A summary may find: watching investment grade bonds for near term trends and sitting tight with all of our holdings until the end of March; barring a nasty event; and finding that this year, our house may just plainly be LUCKY. I better stop now; before the writing becomes more confusing. 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 bonds 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

tgeno, I just now caught your additional remark about getting OUT in time. Makes sense to me! Except--- where to go after that? Unless the grave? My EM Bond fund, for example, is PREMX. At this point, I'm merely continuing to re-invest all divs and cap gains. It's a default position, cuz at the moment, there is no better thing to do, given my circumstances. I wish there were a magic recipe, but there's not.
Anyhow, PREMX gets just three stars and no "precious metals" rating from Morningstar at the moment. It's been that way for at least a few years. But I believe it is behaving and performing in a way which will earn it higher grades and more stars. Turnover is low, so volatility is low. The portfolio is very spread out, to mute volatility, too. Gov't and Corp. debt accounts for the lion's share, and now, there is local currency debt in the mix. In a volatile category, it behaves well and steady. I originally held it in a 403b, but it's now in a rollover IRA. I chose it to begin with because it was available and not completely lousy: the available choices for 403b investors are diminishing every day. And its ER is quite good, too. Rather low for its category.
PREMX:
ER = 0.95% ("Low" per M*)
YTD: 4.99%
1 year: 9.07%
3 years: 18.67%
5 years: 7.32%
10 years: 11.06%
...4% cash. Biggest holdings:
1. Russia
2. "Reserves SBI" (what is that, exactly?)
3. Brasil, Brasil and Brasil.
20.34% in top 5 holdings. But holdings are spread-out from hell to breakfast: Venezuela, Credit Default Swaps. (??????!!!!!!!!!!) Plus, Mexico, Vietnam, Turkey, Indonesia, Serbia, Iraq, Peru.......

Reply to @VintageFreak: I do hold some individual stocks and a number of funds, as well as a few ETFs. I'm usually not that critical of most funds, but I strongly disagreed with Fairholme's bet on financials a while back on fundalarm and in terms of Sears I've detailed my dislike of it in a few threads. I wouldn't dislike or not consider a fund entirely because of one or two smallish positions , but in terms of Sears, whereas some continue to see the value case, I continue to see a retailer who has neglected the stores while competition has been given a green light to move clear ahead of them.
Meanwhile, Sears has taken one loss after another in the last several quarters. CEO Eddie Lampert was a tremendously successful hedge fund manager, but he's never made a real attempt to bring Sears into present day, neglecting the stores in favor of one buyback and short squeeze (see the recent ridiculous move) after another. He's wound up making a once great American brand increasingly irrelevant. People continue to believe in Sears because of the Lampert factor (and to some degree the real estate value factor, although I question whether mall real estate occupied by Sears is as valuable or has even the demand some may believe it does - retail is overbuilt in this country and technology is increasingly chipping away at B&M stores and forcing them to be increasingly competitive), but I believe the options for Sears are dwindling.
If Lampert (who owns a massive amount of shares, much of which were likely bought higher) can manage to sell the thing, good for him. I don't see the grand plan for taking the thing private. Everyone expected Lampert to turn the thing into his Berkshire Hathway, but while 2008 hampered those plans, he hasn't made any motion towards it since and I think anyone still waiting for that to occur will be disappointed.
The question becomes what is the intrinsic value of Sears. My view: every day that it's not a well-run retailer, it's less and less. Every day the brand becomes less relevant is a day the brand and everything that revolves around it becomes less valuable. I asked who would want to own Sears when it was trading over $100. It's now much less, but my question is, has anything changed about the company?
This fortune article also makes a more detailed case:
http://finance.fortune.cnn.com/2011/05/12/eddie-lampert-dementor/
I've said in other threads that I think - even if things are better - retail is going to have to really evolve in the next 5-10 years, with technology resulting in more and more people shopping online or online via their phone. Everyone thought Best Buy was going to do well with Circuit City gone, but they haven't and are planning to reduce store space.
http://articles.latimes.com/2011/jun/23/business/la-fi-best-buy-bigbox-20110622
"Big-box has already seen its heyday," said Brad Thomas, a retail analyst with Keyblanc Capital Markets. "Retailers just don't need as much space as they once did. Across the retail industry there is an effort to reduce the size of your stores as retail and purchases increasingly occur online rather than through brick-and-mortar stores."
Stores are increasingly subleasing portions of stores to other companies, but there's definitely both positives and negatives to that, as well as the question of how successful it will be. I question the value of non-prime commercial real estate in an environment where many retailers are continuing to downsize and look at things like subleasing.
I like the differentiation of the middle-or-high-end outlet concept, such as Simon Property Group's Prime Outlet subchain or Tanger Outlet Malls. I don't have an investment in either, but I think the outlet concept will continue to attract a following and you'll likely see more malls with stores like Nordstrom Rack and Saks Off 5th, among other similar concepts. I think the era of having 10 fairly generic strip malls all within a few miles of one another is over, as well.
Whereas retailers once had to go coupon-heavy to get people to try their online store, now I think retailers are going to have to get increasingly creative to get people in the B & M store. Shopkick is an app example that rewards people for going into stores, and PointInside, a mall app that shows mall directories and coupons linked to the directory for various retailers, is another example. Shopkick and things like it are at least a fairly creative way to get people into stores and based upon things like these, I think there is potential to use apps and other electronic means to get people into stores. I don't think it will solve the issue that retail will need to change in coming years, but they are an example of retail having to evolve and change and try to use these electronic tactics in their favor.
In terms of retail, I just see change as inevitable and necessary over the next decade (or less), whether or not things get noticeably better.
I definitely have funds where I have disagreements regarding some of the management's decisions (Marketfield being a main example, although at least Marketfield has significant flexibility and it acts as a contrarian view against a large portion of the remainder of my portfolio), but in terms of funds making *large-scale* (especially when it starts to become a matter of the fund being reliant upon a specific or very specific bet) moves into something I don't agree with, then I am more than happy to be critical or just not buy it or sell it if I own it. People do buy active management to have managers to make decisions for them, but people bring their own thoughts to the table and can take actions based upon that, as well - and sometimes the person making the disagreement call is right.
In terms of Leucadia mentioned above, I just thought that's a compelling way to get some exposure to Jefferies, as well as a number of other businesses under the Leucadia umbrella, and Berkshire-esque Leucadia (which co-owns a company called Berkadia with Berkshire) has demonstrated an excellent (2008 aside) long-term track record itself.
http://en.wikipedia.org/wiki/Leucadia_National

Reply to @mnzdedwards: I don't think you need to apologize. This is a good question and it's something everybody needs to consider before investing in this fund.
Assume you have an asset allocation where you reserve a certain % in cash and a certain % to small caps. The purpose of this asset allocation is that you can periodically rebalance, with the goal that that you will buy more small caps when they are cheap and you cash in some gains when small caps are pricey.
If you are already holding cash and rebalancing then a fund like ARIVX may not be very suitable. In fact, the reason many funds stay fully invested in stocks is not because Eric Cinnamond is a smarter manager. It's because most funds believe it is their duty to stay fully invested -- i.e. investors pay them to manage stocks, not to hold cash.
This is just something to think about. Personally I like this fund, but I also hold PREOX which is more of a typical fully-invested fund with all the ups and downs (mostly downs). But as I mentioned above, I am hesitant about adding new money into this fund until the manager himself is convinced that there are new buying opportunities.

Reply to @kevindow: I certainly have nothing against ETFs and own a few of them myself, but I don't see them as "the future", but more as offering more options and in many cases more specific options than one can find in the mutual fund world. If I want to invest in fertilizer companies, there's not really a mutual fund, but there is the SOIL etf (and there is the FOOD/BARN etfs, although those apparently are ending.) Still, I have seen very few actively managed ETFs so far that have provided compelling performance - yet.
I'm looking forward to new ones, but there's been ETFs that have either been so far disappointing (Cambria Global Tactical) or funds that have turned in fine performance but have been so specific or eccentric - the TrimTabs Float Shrink etf (which is managed by TrimTabs head Charles Biderman, no less), for example, which has average volume of about 500 shares per day - that I can't see them continuing if they can't drum up more interest. While I think the amount of specific industries that one can invest in via ETFs is interesting and in many cases useful, many are going away because they aren't getting enough interest, either.
Do I think that there are many actively managed mutual funds that are too expensive and/or offer lackluster performance? Sure, but I guess I don't see how actively managed ETFs will not result in the same situation over time - tons of funds, some good, some bad, some expensive, some not (although given the industry, I think the "not"s will be the minority - I don't see actively managed ETFs being revolutionary, but more of a continuation.) I do think there's some interesting CEFs out there, such as tech private equity fund Firsthand Technology (SVVC), which someone mentioned the other day. The FPA-managed Source Capital (SOR) would be another, or even the recent Doubleline fund.

Hi Mike_E,
I would advise you not to worry about the cash position of ARIVX. Eric Cinnamond managed ICMAX from 10/3/2005 to 9/2/2010, and during this period an initial $10K investment appreciated to $17,613 vs. $10,391 for VBR. Since the inception of ARIVX, that same initial investment would have increased to $11,135 vs. $10,589 for VBR. These results indicate to me that he is a skilled investor. His skill was clearly evident when his ICMAX only lost 7% in 2008 and then managed to beat the SC indices in 2009 by gaining 40%.
I spoke with him over the phone when he worked at Intrepid Capital, and he was very friendly and patiently answered all of my questions as detailed here:
http://socialize.morningstar.com/NewSocialize/forums/p/243840/2697828.aspx#2697828
As you can see, Eric Cinnamond has had his doubters for a long time, and he continues to prove them wrong.
Kevin

Read Steven Romick's latest commentary dated 12/31/2011 for his current outlook on inflationary and deflationary arguments in the current investment environment.FPACX as most of you know is a go anywhere fund with a strong long term record of success and capital preservation.The fund currently has very minor positions in farmland ,an office building and residential mortgages which several posters have identified as inflation protections.The good thing about FPACX and it's newer sibling FPIVX is the opportunity for beginning investors to invest a smaller amount to start with. This from the fund's App. Minimum Investment Amount ($1,500 Minimum or $100 and establishment of Systematic Purchase Plan) Here: http://fpafunds.com/literature.html
Commentary here:http://fpafunds.com/hc_crescent.html