Our Publisher’s Letter takes on Bill Gates, the Great Depression, shifts in Snowball’s portfolio, and wooden-headedness.
Lynn Bolin refines his conservative retirement strategy in two complementary essays that blend rigorous quantitative analysis with practical portfolio construction. In "Refining My Conservative Retirement Target Portfolio," he uses Excel Solver optimization across 36 carefully selected funds to create "Conservative" and "Moderate" portfolios designed for the challenging conditions ahead—frequent bear markets, modest inflation, and elevated valuations.
His companion piece examines sector performance through "Risk Off" and "Yield" lenses, spotlighting utility and infrastructure funds like Virtus Reaves Utilities ETF (UTES) and Lazard Global Listed Infrastructure Portfolio (GLFOX) as potential conservative portfolio complements. Both essays reflect Lynn's measured response to current uncertainties, unprecedented tariffs, high deficits, and stretched valuations, as he methodically builds a conservative subset portfolio while maintaining his traditional 60/40 allocation with financial advisors for the majority of his assets.
Following up on a short note, we review the logic (and research) behind T. Rowe Price’s surprising or not-so-surprising decision to file a Multi Crypto ETF prospectus with the (currently shuttered) SEC.
GMO has launched a vehicle for contrarians who think that Nvidia & co. will not be the unbeatable story forever. GMO Dynamic Allocation ETF just launched and is an actively managed, low-cost, global multi-asset ETF. Using the same discipline embodied in the 30-year-old GMO Global Asset Allocation Fund, the ETF has access to assets across the globe and will lean into those whose valuations are most compelling. It’s profiled in this month’s Launch Alert.
The Shadow, as ever, catches us up on the industry’s various machinations, including an ongoing rush of launches and fund-to-ETF conversions, in “Briefly Noted.”

Action in the taxable: Sold PEY and CSB. They just aren't doing anything for me besides going sideways.

With the proceeds of the sale 2/3 went to IDOG and 1/3 went to EISIX. So my exposure to foreign value is roughly equal to my position in VWIGX. For a dividend fund I like the fact that IDOG isn't too heavy in any particular sector.
I also have foreign exposure in the taxable through SEQUX, GLFOX, GRID, and VMNVX to name a few.

Only fortunate because I know it would drive me crazy obsessing over every detail all the time. So I'm not as crazy as I could be. :-D
I bought SMH for the taxable in February 2024 when some poster here was talking about chips. So I put a few bucks down. And zowie! I already had TDIV, FSCSX, and CSGZX.
So it keeps me comfortable owning my old fogies like DODGX, SEQUX, VEIRX, FSMEX, and POSKX; plus the fliers on FMIMX, GLFOX, RWJ, VSMIX, etc.
There are some duds mixed in there too. I'll be rearranging those deck chairs overboard in the near future.
If you already have tech, why buy the rest of the S&P 500 willy nilly when you could focus on SPHQ or SPGP?

I'm not buying stocks anywhere at the moment. But three of the top four performing funds in my taxable account--SEQUX, GRID, and GLFOX--have a healthy exposure to stocks located in Europe.
Make of that what you will. But it's a crazy world when a fund like GLFOX returns 19%.

Just looking at a few other funds in PRWCX’s league - perhaps not as good:
From M* 15 year average annual return:
PRWCX 11.96%
GLFOX 10.98%
DODBX 10.24%
10 years
PRWCX 10.86%
GLFOX 9.30%
DODBX 8.76%
5 years
PRWCX 10.94%
DODBX 10.71%
CPLSX 10.42%
GLFOX 10.24%
I’ve owned all 4 over the years. CPLSX, the only one I currently hold, is 9 years old. Surprising, has held its own among this distinguished crowd over that time. It’s a long/short fund with a substantially higher cost. Perhaps a safer bet for us ”late middle-aged” folks. Inception April 2016 / 8% average annual return since.

BILT started trading today. I bought a 1/4 position.

Thanks for the tip. Its holdings are quite solid, though I wish there were some more concentrated positions and fewer airports. As to the former point, I'd probably still lean toward GLFOX.
Other than WMB, its top 10 holdings don't overlap with my stuff in this area, so it'll go on the watchlist for now.

Hasn’t been as bad a year as the headlines and talking heads on Bloomberg, etc. might lead one to believe. I posted elsewhere that both DODWX and DODFX are up double digit year to date. So is GLFOX which invests in infrastructure, mostly in Europe. The real assets category which usually includes commodities, energy, AG, real estate is also having a respectable year.
But how about less risky “run-of-the-mill” balanced / tactical allocation funds? I ran a few calculations factoring in the return YTD (M*) which represents 144 days thru Friday and projecting out what that rate of return would produce through an entire year. (No guarantees of course).
The first one, PRWCX, isn’t open to new investors, but is always interesting to watch.
PRWCX YTD: +1.91% .. Projected a full year = +4.85%
LCORX YTD: +2.84% … Projected a full year = +7.19%
DODBX YTD: +4.82% … Projected a full year = +12.25%
FKIQX YTD: +1.88% ..… Projected a full year = +4.78%
TRRIX YTD +2.55% .. .… Projected a full year = +6.46%
AOK YTD +2.45% …..… Projected a full year = +6.20%

too subtle i guess.

Yeah. That’s one word for it.
It might make me feel better to fling mud at the other side and enumerate all their shortcomings. But it doesn’t do a damn bit of good for my financial bottom line. Investing is about growing wealth or, minimally, maintaining the purchasing power of your liquid assets. My dollar bills all look the same. All green. Not red colored or blue shaded to indicate under which party’s Administration they were acquired.
Why distract yourself here from focusing on the ways to make money? The words of the old AA prayer, “Grant me the serenity to accept the things I cannot change. The courage to change the things I can. And the wisdom to know the difference” may well apply.
Funds that some here may own …
DODFX +17.78% YTD
GLFOX +13.90% YTD
CPZ +10.27% YTD
PRPFX +10.12% YTD
DODWX +9.9% YTD
FXF +9.82% YTD
LVHI +8.55% YTD
RAAX +8.41% YTD
FLJP +8.32% YTD
VPU +8.17% YTD
RAPAX +6.71% YTD
ASIA +6.43% YTD
CPLSX +5.71% YTD
QAMNX +5.30% YTD
One Stock
BRK-B +12.26% YTD

GLFOX gained .86% today. Sorry now I’d put in a small buy order late in the day thinking I’d probably add to my holdings at a discount.
I haven’t looked at ccor recently. But the VIX apparently has romped ahead in recent days. That + the flight into quality bonds has probably helped it.

Good topic. I don’t invest according to the factors listed in the OP (not that it’s a bad idea). But like Yogi Berra said - “It's tough to make predictions, especially about the future.” To a great extent it’s “business as usual” here.
I have trouble in my head separating “hedging” from just plain building cash for anticipated withdrawals. But have been slowly raising cash from 10% (all of last year) to 12.5%. Have a small sell order in for some shares of GLFOX Monday to seal that.
Only 34% in equities now with better than half of that in foreign holdings. For real more conventional hedging I use CPLSX (large sum) and CPZ (very small sum). I can tell by the way they behave most days that management has some shorts on - especially in the QQQ.
Discrepancy in above totals is owing largely to holdings like real estate, preferred stocks, precious metals, energy etc. which are considered neither cash nor equity. For the 12.5% loosely defined cash position I’m splitting the money 3-ways among SPAXX, JAA and VNLA

When "other" becomes a bigger part of the funds make up I look for "another" fund. :)
@bee - I like a lot of “other” as long as I understand what it is.
A good chunk is in LPXAX (Limited Term Preferred Stock + Income). So Mark seems to have hit the nail on the head. As noted elsewhere, on Friday I bought a modest piece in a real estate CEF. That may be what pushed “other” to such an eye -catching level. CEF’s play a lot of games. This one uses leverage. Maybe that leverage + derivatives is moving the “other” reading in hard to comprehend ways. Have long held GLFOX (global infrastructure) which probably contributes to “other”.
There seem to be times when I can pull-up the breakdown by fund at Fidelity and times when I can’t get it to work. Your responses suggest I need to keep trying.
Thanks guys for helping me make sense of it all.
I think my earlier question about oil companies is a worthwhile consideration when you consider the underground assets owned, plus port facilities, perhaps pipelines and in some cases tankers. That’s a lot of infrastructure.

GLIFX/GLFOX is old-timey infrastructure that I would put in the category with widow and orphan investments. It's pretty much The Electric Company, Waterworks, and the Pennsylvania, Short Line, B&O, and Reading railroads.
I still own a chunk of GLFOX in my taxable that I bought on 3/18/2020. I become attached to such purchases. I sold a more recent position in GLIFX from the IRA in order to simplify it. I don't feel that need with the taxable. The proceeds from that sale went into IYK and FSUTX.
I think any discussion of new opportunistic infrastructure funds is incomplete without mentioning water funds. Start with PHO or FIW if you are H2O curious.
There are global water funds, but they have faced rougher sledding over the past three years. You could start with PIO and TBLU. I'm not smart enough to imagine how they might perform in the tariff regime promised by our new president.

Thanks @MikeM
20% sounds about right if they’re including options held by the funds you note. I don’t own any funds that play overtly in the options markets. But, no doubt, some of them utilize them to a small degree. My 9% is (hopefully) reflecting real assets. Owning GLFOX there may be some infrastructure holding being counted. Just ages.

"Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried."
The optimal portfolio is only known in hindsight.
Diversification means always having to say you're sorry about some investment in your portfolio!

Your best observation ever. And no need for hindsight.
I have concentrated in the right categories since 1995. See (link).
Just a small example: since 11/2023, I have posted many times to own US LC tilting growth and not diversifying. See my post from 11/1/2023 (link)
"You can just play it simple: no diversification, no predictions, no narrow range funds, looks like tilting LC growth is here to stay which = SPY/VOO or you can gamble and use some QQQ."
Why I posted the above? my system told me. See the chart(https://schrts.co/MWCuZUMV)
One of my fundamental rules is never to hold a fund that is not performing well. It doesn't mean #1, it means in the top 30% based on risk-adjusted performance. It's much easier when you have 3 funds, it's a lot harder with 10-15 funds.

"Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried."
The optimal portfolio is only known in hindsight.
Diversification means always having to say you're sorry about some investment in your portfolio!

I was surprised by Zakaria’s claim that Britain’s per-capita GDP is lower than that of any of our 50 states.
Like others here, I own a slice of GLFOX which invests in infrastructure and, for whatever reason, stays mainly in Europe. It has returned a big zero this year. Not a concern to me. I can be content with some holdings rising and some falling. If everything were rising together I’d be very worried. But I suspect others may not share that level of patience..
Not to be overlooked, the dollar’s persistent strength has also dinged investments in Europe and elsewhere.

More NSRGY at under $100 / moved it from spec to long term hold. Added a little to GLFOX and LCORX. Both down recently.

Don't look now but a utilities fund I follow (UTG) is up 6.5% over the last 3 weeks. Hopefully Giroux is on to something.

Yep. FSUTX is the first place I looked in trying to detect the likely culprit here. But it is up nearly 12% YTD. GLFOX isn’t a utilities fund - but holds a lot of them. It’s been in a funk most of this year, but has begun to move up in recent days. (Strong dollar also impacting this one)

Since this post has been bumped . . .
Prof. Snowball's thesis in his column:

in every measure of returns, more equity is better. In every measure of risk and of risk-adjusted returns, less equity is better. Several earlier MFO essays on the discreet charm of stock-lite portfolios found the same relationship is true for periods dating back 100 years. Lightening up equity exposure reduces your volatility by a lot more than it reduces your returns, so it always seems like the best move for risk-conscious investors.

And he chose four "Great Owls", which included FAGIX and FPACX as well as OSTIX and RSIVX, as great alternatives to only equities. All four buy more, or less, junk. I chose to run PV against FAGIX because I am not comfortable buying most bond funds whether they're buying junk, or agencies.
If David Giroux wants to buy junk, well, that's why I bought his fund. Let him worry about it. I don't need to pay above average fees to FPA.I can load up on cash myself. YMMV.
In this PV I'm looking at GLFOX versus FAGIX and FPACX. I think of GLOFX as a global version of Electric Company, Waterworks, and the railroads. So, Widows & Orphans take a ride on The Reading . . .
For those that don't follow links, GLOFX has the better standard deviation, Sharpe, and Sortino numbers, a better compound growth rate, lost less money in the worst year of holding, has less correlation to the market, and the lowest beta and highest alpha.

And here is the original W&O versus FPACX. Since July 1993 FPACX is the winnerin returns, while W&O beat FAGIX.
Here are some runs against what MFO Premium calls The Great Normalization (TGN), which they date from January 2022

First: W&O versus FPACX and FAGIX. My take away is that the fund with the best SD, Sharpe, and Sortino numbers also had the worst CAGR, worst yearly loss, and highest market correlation. YMMV
And here is W&O Ride the Rails. And it looks to me like the fund with the worst Sharpe and Sortino numbers has lost the least amount of your money. But I don't always spot things correctly. Let me know if you see something different.
Why did I run these numbers? It's the kind of thing I like to do when people say things like every. I like to dig a little deeper.

If one likes energy company prospects but does not like the high volatility of energy equities, one can look into finding funds with a portfolio that combines utility and energy stocks. GASFX is one such fund, which I never owned and have not research into but it has an M* analyst rating of Negative. I used to own GLFOX many many years ago. I treat GLFOX as a downstream vertical; whereas, GASFX as a upstream vertical.
I currently own SWX in my trading account.