@hondo. Same boat here. My wife has no interest in this stuff and I think more and more about a vastly simplified portfolio going forward. As my CD’s and treasuries mature it might be time to build a position in Wellesley or some such thing. At least in the IRA accounts. That and sell the boat

Same here concerning the wife's interest. Actually, I already have a fairly simple portfolio, so I should not be so concerned. Two balanced and one bond fund in the IRA/Roth and two balanced and one bond fund in the taxable accounts plus MM and some CDs. I could but don't want to change the taxable funds because of the large capital gains involved. We have owned them for a long time. I suppose that I should stop looking at this stuff so often and let it ride.

How long will it last, and where will it peak? Those are the questions. The consensus seems to be that it will only last for about a year, not more than 2, and that it will peak around 6%, maybe a little less and not more than 6.25%. That's a very strong consensus, and it seems that many take it as a forgone conclusion. That's not to say that it's wrong.
If I really believed in it strongly, I would try to go out as long as I could within the next year at anything over 5.5% -- but really I'm not so sure. I'm afraid inflation might get out of control. If we go out one year now, I think rates will still be this good or better in a year.
btw, there is no reason to buy CDs with an early withdraw penalty. Buy a brokered CD. My broker tells me that he has been able to sell CDs for clients for very minimal losses or even with small gains. (The seller keeps all accrued interest).

I am not seeing that very optimistic CD scenario for longer term CDs, but CD investing involves projections for rates, and I did choose a short term laddering scenario in 2022, with many CDs maturing in 2023 and early 2024. The first 6 months of 2024 will be a major test for me, to make CD investing decisions, possibly choosing longer term CDs if the rates are higher than today.

How long will it last, and where will it peak? Those are the questions. The consensus seems to be that it will only last for about a year, not more than 2, and that it will peak around 6%, maybe a little less and not more than 6.25%. That's a very strong consensus, and it seems that many take it as a forgone conclusion. That's not to say that it's wrong.
If I really believed in it strongly, I would try to go out as long as I could within the next year at anything over 5.5% -- but really I'm not so sure. I'm afraid inflation might get out of control. If we go out one year now, I think rates will still be this good or better in a year.
btw, there is no reason to buy CDs with an early withdraw penalty. Buy a brokered CD. My broker tells me that he has been able to sell CDs for clients for very minimal losses or even with small gains. (The seller keeps all accrued interest).

Think it was premature to say that US may not enter a mild recession, i.e. soft landing. It is a question of when and how severe the recession will be. Many conflicting data right now with the tight labor market, low unemployment rate, falling CPI, slowing service cost and an inverted yield curve. So take you wild guess…

Agree. Most younger investors probably don’t really know what a recession is. Have to go back to 2008. ISTM everything’s been going up since March 2009. OK - not the case for China, Russia and EM economies. Scary dip in early 2020 - but I wouldn’t call it a recession. The Fed raced to the rescue, even back-stopping some corporate bonds. Lowered interest rates. Printed money. And under 2 different Administrations “rebate” / “stimulus” checks were mailed out to taxpayers. Furniture stores couldn’t keep up with demand. Ships were backed up in ports waiting to unload. Crazy.
Yes, nasty market sell off last year. Interest rates rose rapidly. Some sold equities out of fear of recession and moved to cash, etc. But the economy continued to run hot.
I don’t know if there will be a recession this year or not. But I suspect we’re in for a really nasty one one of these days. ‘23? ‘24? ‘25?

Taking income and doing Roth conversions are just two of many ways that you could wind up in a high tax bracket. Another way is simply getting paid a lot of money. Taking IRA distributions (whether for RMD or for other reasons) is likewise just another way to wind up in a high bracket.
What matters is your effective tax bracket, not how you get there.
Then there are quirks in the tax rules that distort tax brackets. For example, if some but not all of your capital gains are taxed at 0% because your taxable income is low enough, then every dollar of ordinary income you add will likely cost you an extra 37¢ in taxes. That's 15¢ tax on a dollar of cap gains that used to be taxed at 0% plus 22¢ on the extra dollar ofordinary income. So your effective tax rate is 37%, even though you are nominally in the 22% bracket.
Again, why that extra dollar of income is taxed the way it is doesn't matter. All that matters is whether that last dollar of income gets taxed a lot (high effective tax rate) or a little (lower effective tax rate). If the effective rate is not high enough, munis are useless.

July 28th Episode:

Discover the future of AI investments with Michael Lippert, Head of Technology Research at Baron Capital. He believes AI is now at its transformative inflection point.
Join us for an insightful discussion on his recently published report, ‘Investing in AI: Opportunities and Risks,’ where we explore the potential of AI as a game-changing technology.
As the Portfolio Manager of Baron Capital’s high-growth stock-oriented Baron Opportunity Fund, he shares his strategies for identifying companies with durable competitive advantages and cash-generative business models, fostering double-digit multi-year projected annual returns.
Gain valuable insights into the growth potential of AI investments from a seasoned expert’s investment perspective.

https://www.sec.gov/Archives/edgar/data/1096344/000119312523197702/d486209d497.htm
FAIRHOLME FUNDS, INC.
The Fairholme Allocation Fund
(the “Fund”)
Supplement to Prospectus and Summary Prospectus
Dated March 30, 2023
Supplement dated July 28, 2023 to the Prospectus and Summary Prospectus of the Fund dated March 30, 2023.
On July 27, 2023, the Board of Directors (the “Board”) of Fairholme Funds, Inc., at the recommendation of Fairholme Capital Management, L.L.C., the investment adviser to the Fund, approved the liquidation and termination of the Fund. Effective at market close on July 28, 2023, the Fund will suspend the offering and sale of its shares. The Fund expects to make the final liquidating distribution on or about August 31, 2023 (the “Liquidation Date”).
At any time prior to the Liquidation Date, shareholders may redeem shares of the Fund, or exchange shares of the Fund for shares of the Fairholme Fund or the Fairholme Focused Income Fund, both of which will remain open to investors, in the manner described in the Fund’s Prospectus. In connection with the liquidation, the Board has approved the waiver of the redemption fee of 2.00% imposed on Fund shares redeemed or exchanged within 60 calendar days of their purchase.
Shareholders should be aware that the Fund may convert assets to cash and/or cash equivalents before the liquidating distribution is made to shareholders. Accordingly, the Fund will no longer pursue its stated investment objective or engage in any business activities except for the purposes of winding up its business and affairs, paying its liabilities and distributing its remaining assets to shareholders. If a shareholder has not redeemed his or her Fund shares prior to the Liquidation Date, the shareholder’s account will be automatically redeemed and an amount equal to the shareholder’s proportionate interest in the Fund’s assets will be distributed to the shareholder on the Liquidation Date.
The redemption, sale, exchange or liquidation of Fund shares may be a taxable event to the extent a shareholder’s tax basis in the shares is lower than the liquidation proceeds per share that the shareholder receives. Shareholders should consult with their personal tax advisers concerning their particular tax situation.
If you hold Fund shares in a tax-deferred retirement account, you should consult with your personal tax adviser or account custodian to determine how to reinvest your liquidation proceeds on a tax-deferred basis.
* * * * * *
YOU SHOULD RETAIN THIS SUPPLEMENT WITH YOUR PROSPECTUS AND SUMMARY PROSPECTUS FOR FUTURE REFERENCE.

Notable, sure ---- but how long did he have to hold the position to see that gain? IIRC that's been a dog stock for well over a decade and I suspect he's been underwater for most of it as their largest shareholder.

Given the fact that it's now almost 80% of the FAIRX portfolio, what does Bruce do now? If he pats himself on the back and moves on, can you imagine the year-end Capital Gain distribution to look forward to? He'll probably sell it and buy FNMA, and then sit back and wait a few years.

There's a limit to what the guys are allowed to talk about just now. I did ask about two things that I thought were permissible. First was why they delayed in 2017 and the second was why the fund is flagged as closed to new investors.

A1: The postponement of the launch of Capital Appreciation and Income Fund launch in 2017 was due to an internal job transition involving the fund’s then co-portfolio manager. We wanted to be sure that all necessary support resources for the fund, including investment personnel, were firmly in place, so a decision was made to delay.
The answer on the closure was, as I suspected, a typo. I think they were copying and pasting from the PRWCX perspectus.

I'm a little confused. Roger about VOO. But I'm looking at funds I was in in the first decade of this century, charting TWEIX, JENSX, FPACX, JABAX, and FASMX from the century's first trading day through the end of 2010.
(You could move the start or endpoint to make it an even 10y if desired and make the performance a bit worse, I believe.)
For the 11y span I specify, though, the growth ranges from up almost half (Fidelity, not so great, but sure better than SP500's nominal breakeven) to >~60% (Jensen and Janus) to way more than doubling (TWEIX, +133%) and finally to First Pacific, winning at +215%.
As always, I was inconstant, not a faithful or steady investor, as I recall, so I did not see all of these gains. But this active management was often pretty impressive for such a tough time.
Inflation over my span was ~31% total, 2.5%/yr.

Back to the original topic…
Amy Zhang was supposed to be a star SCG and MCG manager at Brown Capital. She got hired away by Alger. However, her record there leaves a great deal to be desired. Not that her former fund BCSIX has shot the lights out since she left; its total return for the past 5 years is only 7.5%. OTOH, AGOZX has racked up a 5-year loss of 3.07% under Zhang’s tutelage. Her Alger MCs haven’t done any better.

Not much on this that I can dig up. Perhaps ETFs are too new to have much of a track record.
Question: Under market stress (2008 / 2020 / 2022) are ETFs more likely to see large and rapid outflows? If yes, than that puts added pressure on management and might lead to more pronounced distressed selling of assets, thereby detracting from long term performance disproportionally compared to similarly invested mutual funds. Obviously, there are more restrictions on buying and selling traditional open end mutual funds than there are regarding ETFs - and the reason I’m prompted to ask.
Not merely academic. In choosing between a managed ETF and a managed mutual fund the stability of investor base might be an important consideration for long term investors.

I agree that it is open with Schwab, but it should not be.
From January 31, 2023:
https://www.sec.gov/Archives/edgar/data/1494928/000139834423001516/fp0081525-7_497k.htm
Excerpt:
Purchase and Sale of Fund Shares
Sales of Retail and Institutional Class Shares of the Fund are closed to new investors except as noted below. Existing shareholders of the Fund (including clients of any financial adviser or planner who has client assets invested in the Fund) and certain eligible investors may purchase additional shares of the Fund through existing or new accounts and may reinvest dividends and capital gains distributions. New shareholders may open Fund accounts and purchase shares directly from the Fund (i.e., not through a financial intermediary). Further, any trustee of RiverPark Funds Trust, or employee of RiverPark Advisors, LLC or Cohanzick Management, LLC, or an investor who is an immediate family member of any of these individuals may also open new accounts and purchase shares of the Fund. The Fund reserves the right, in its sole discretion, to determine the criteria for qualification as an eligible investor and to reject or accept any purchase order. Sales of shares of the Fund may be further restricted or reopened in the future.

@rforno: CGDV certainly looks like a good idea based on what it’s done in its short lifetime. What I find surprising is that last year’s dividend darlings SCHD and GQHIX, to name a couple I have followed, are really sucking air this year by comparison. That team at Capital Group is doing something right. VIG has outperformed Schwab and GHQ funds over the past year, but it hasn’t done nearly as well as CGDV.

There are only a small number of American Funds/Capital Group. So, several are humongous and are team-managed. But those teams are internal - small groups of its analysts are given slices of big funds to manage. Typically, analysts only recommend/suggest stocks to lead manager(s) who make the final selections. But here, there is a combo approach. These teams at American Funds are different from those at Fido (many who led big Fido funds, but when that didn't work out, they were put on FBALX) or Vanguard (who farms out to multiple external and internal managers).
At one time, Bogle worried that some other firm like American Funds could go noload before he had the chance to implement his big new idea after being fired from Wellington Management (a load shop until then) - index and active funds that were and low-cost and noload. It seems that American Funds instead went in the direction of zillion classes - its Retirement R6 classes have the lowest ERs, and it now also sells F-1 classes on 3rd party brokers as noload/NTF (Fido, Schwab). It has also gotten into the ETFs that are farthest from load funds. Do its fund brokers and load fund holders like this? NO, but American Funds sees that as a declining pool of fools who unknowing pay a lot for the same stuff that is available for free in various channels.
I had American Funds R6 in my 403b until the plan changed to mostly index funds and TDFs - another disturbing trend.

@LewisBraham: re: the Capital Group ETFs. Did you find the same team approach as the American OEFs, or are there differences? I own CGGO and CGGR, both of which have four-person teams, but I don't know about those teams' access to research and analysts.

+1 for Capital Group, which holds a very large chunk of my money.

Think you meant CGGO, Capital Global Growth Equity; a sold global growth fund. The domestic version is CGUS. I bought CGUS and CGDV when they became available a year ago. Also looking at CGMS, a multi-sector bond fund.
Addition: excerpt from Lewis Branham’s article,

American Funds, which has had a multi-manager structure for its funds since 1958. Moreover, its 211 analysts actually manage a slice of each fund directly. Typically, equity funds have more than 10 co-managers.

For retirement account, the ER of the R6 shares (without the 12-b-1 fee) are reasonable. Now these actively managed ETFs are also competitive on their fees to other firms as WisdomTree.

From the article:
"As discussed in our 1Q23 letter, capital flows favor assets with the highest risk-adjusted returns. Investors that have been large buyers of investment grade CLO debt are now able to earn significantly better yields in newly issued commercial mortgage-backed securities (CMBS)15 debt of comparable quality. In the AAA tranche, CMBS debt offers slightly less spread for much higher credit quality based on loan-to-value (LTV). For tranches below the AAA tranche, CMBS yields are, on average, significantly higher with better LTV"
"At the same time, we are selectively nibbling in the CMBS market. Based on our expectation of increasing volatility, the portfolios are likely to continue experiencing above normal turnover as we adapt to reflect the changing environment"
Music to my years.

(https://humbledollar.com/2023/07/courage-required/)
William Bernstein | Jul 22, 2023
EVEN AFTER BEAR markets in 2020 and 2022, investors’ appetite for stocks remains as robust as ever. But what if stocks had not just a rough year or two, but a dismal stretch that lasted more than a decade? Below is an excerpt from the second edition of my book The Four Pillars of Investing, which was published earlier this month.
In August 1979, BusinessWeek ran a cover story with the headline “The Death of Equities,” and few had trouble believing it. The Dow Jones Industrial Average, which had toyed with the 1,000 level in January 1973, was now trading at 875 six-and-a-half years later. Worse, inflation was running at almost 9%. A dollar invested in the stock market in 1973 purchased just 71 cents of consumer goods, even allowing for reinvested dividends.
According to the article, “The masses long ago switched from stocks to investments having higher yields and more protection from inflation. Now the pension funds—the market’s last hope—have won permission to quit stocks and bonds for real estate, futures, gold, and even diamonds. The death of equities looks like an almost permanent condition—reversible someday, but not soon.”
Contrast today’s universal acceptance of stock investing with the sentiment described in the BusinessWeek article, when diamonds, gold and real estate were all the rage. The price of the yellow metal had risen from $35 an ounce in 1968 to more than $500 in 1979 and would peak at more than $800 the following year, equal to roughly $3,000 in today’s dollars. Still, there are similarities between the 1970s and today. Now the wise and lucky own houses in cities with desirable real estate. Back then, those who had purchased their houses for a song in the 1950s and 1960s were by 1980 sitting on real capital wealth beyond their wildest dreams. Stocks and bonds? “Paper assets,” sneered the conventional wisdom.