I love baseball and personal finance, but I barely understand baseball’s sabermetrics and finance analytics. I want a good story.

The stat guys despise the Tampa Bay Rays’ Chandler Simpson because he only has a single tool: speed. The one home run he’s hit in his entire career was inside the park. This is a guy who can barely hit a ball out of the infield. I love him because he’s a unicorn. He has a story to tell: 112 stolen bases last year in the minors. For those of you who don’t know baseball, that’s a good number.

Likewise, my eyes spin around in my head when I look at Ulcer Indices, Martin ratios, EBITDA, and Bollinger Bands. I don’t have a clue why anyone would want to look at a logarithmic scale when they can view a linear scale with true proportions. Anyone who thinks they can predict the future by looking at past performance using charts strikes me as one step below alchemists.

So when crunch time comes for whatever reason, I want to hear what David Snowball says, or Warren Buffett, or Morningstar human analysts (its AI analyses are useless), or any of my mutual fund managers.

Crunch time came last year on the wings of inflation, and this year on the barge across the River Styx to the Tariff Hades. I wanted to evaluate my funds to see which had cash in reserve and how they had performed as inflation grew.

I didn’t want to change my allocation from the traditional (and arbitrary) 60 percent stocks and 40 percent bonds. I don’t panic easily, and keeping 60–40 makes it easier to buy low and sell high when I rebalance my portfolio.

Rather than drowning in incomprehensible metrics, I decided to focus on four simple questions that any investor can understand and evaluate.

• Does the fund keep cash reserves for defense and opportunities?
• How did it handle the recent inflationary period?
• What’s its downside protection when markets tumble?
• And perhaps most importantly—do the managers tell a rational story about their strategy and actually talk to shareholders like human beings?

These four criteria guided me through a systematic review of my entire portfolio, from large-cap growth to small-cap value to bond funds.

I started my analysis with Parnassus Core Equity (PRBLX, PRILX), a wonderful, large-cap fund that I’ve owned since 2002.  It also screens companies for social responsibility. (Needless to say, it avoided Enron, among others.) Its lead manager, Todd Ahlsten, writes informative reports; talks with the media frequently; has occasional shareholder conference calls; and answers questions personally, despite the fund being relatively large (due in no small part to its good performance over the years). Its downside capture over the past five years is 73, and Morningstar gives it a Gold rating.

Still, I was concerned that it’s a fund that always stays fully invested, and its top holdings were (as of March 2025), Microsoft, Amazon, NVIDIA, and Alphabet. With 32 percent of its portfolio in tech, I had concerns.

I can’t imagine ever selling my entire position in the fund, but it was time to do some rebalancing into a large-company fund that counterweighted Parnassus.

MFO gave me a lead: Marshfield Concentrated Opportunity (MRFOX). It was sitting on 28 percent cash in March, with no holdings in tech. One of three managers had a unicorn background: a Yale Law School degree, and she worked for a now-senator whom I respect from my home state of Massachusetts, Ed Markey. Another manager went the Warren Buffett route: an MBA from Columbia. Of course, resumes do not a fund manager make. I was impressed with Marshfield’s investing philosophy, the managers’ commentaries, and yes, its downside capture was just 51. Over three and five years, Morningstar rates it as low risk, high return. In fact, it’s never had a losing calendar year.

So I now own both Parnassus and Marshfield as my large-cap funds.

But what about a small-company fund? I had owned Neuberger Berman Genesis (NBGNX) for almost as long as I owned Parnassus. It had served me well because its managers didn’t gamble: They invest in smaller companies that actually have real products and real profits. It never made as much money in bull markets, but it lost a lot less in bear markets.

It was always fully invested in equities. As inflation and tariff chaos came on, I wondered if there was a small-cap fund that might lose even less and keep a cash reserve. I found the fund in a boutique family where I already owned two funds: FPA Crescent (FPACX), which is an MFO favorite, and FPA Flexible Income (FPFIX), which attracted me because of its relatively short duration (to simplify: a measure of when bonds come due) and its goal to beat inflation over rolling three-year periods.

The new small-cap fund was FPA Queens Road Small Cap Value (QRSVX). However, before I convinced myself to sell out of Neuberger, I had questions. While its performance was equivalent to Neuberger, and its downside capture was less, unlike other FPA funds, Queens Road appeared to have just one manager, and, of equal concern, that manager worked for a subadvisor. In other words, it’s a contractual arrangement.

That raised alarms because a former FPA fund, International Value, was purchased by a third-party company, and within a year, the fund divorced its new owner and closed. (MFO’s article about it here)

So I wanted to hear from the horse’s mouth about the arrangement that Queens Road has with FPA, and what happens if the manager can’t continue? I sent an email to both FPA and the subadvisor asking that whoever opened it forward it to Steven Scruggs, the manager. It took a couple of weeks to get a response, but yes, Steve replied, answered my questions, and offered to talk with me on the phone. (And yes, he now has a co-manager, and relations with FPA are great.)

I sold Neuberger and made Queens Road my core small-cap fund, which also has a 10 percent cash position.

Finally, in addition to the FPA Flexible Income bond fund, I had a position in what I called my super-conservative junk-bond fund, BrandywineGlobal Corporate Credit (BCAAX). It began its life as Diamond Hill Corporate Credit, owned by a smallish company based in Ohio. In 2021, it sold the fund to the behemoth multinational Franklin Templeton fund-devouring monster. While the managers continued to run the fund well, their shareholder communications became thinner and thinner.

I moved that money to the even more conservative junk-bond fund, CrossingBridge Low Duration High Income (CBLVX, CBLVX). To be fair, the manager doesn’t consider his fund to be junk, and Morningstar classifies it as a multisector bond. However, in March, 60 percent of its portfolio was below investment grade or unrated. Of greater importance to me was the duration: far shorter than Brandywine, so it would have greater flexibility to deal with the chaos economy.

Again, I had some questions about how the manager, David Sherman, works with his team, and I emailed CrossingBridge. He replied quickly. Soon after my investment, I connected to his quarterly video conference call. He managed to speak to my low level while giving more details to those who are much smarter than I am.

Bottom Line: Since making these portfolio tweaks, the market has climbed higher rather than crashed (as of mid-May, as I write). My new funds haven’t necessarily outperformed my old ones on the upside—and that’s the point. I’m not trying to hit home runs anymore; I’m playing for consistent base hits and stolen bases, just like Chandler Simpson. I can’t predict whether we’ll face layoff chain reactions, persistent inflation, crushing consumer debt, or economic retaliation from former allies seeking independence. But I know my fund managers have cash to deploy, proven downside protection, and the communication skills to explain what they’re doing when the chaos arrives.

Postscript: Downside capture ratios and my funds

How do I measure downside protection? I look at a statistic so simple even I can understand it: Downside capture, which is a ratio of how much a fund loses in bad markets compared with its asset-category index (aka benchmark). If the market plummets by 50 percent, a fund with a downside capture of 100 also drops by 50 percent. But if the fund’s downside capture is zero, it hasn’t lost any money. This is important because the less money you lose, the easier it is to recover. If I lose half of my $100 investment, I have $50. To get back up to $100, my investment would need to increase by 100 percent. That’s tough, and even with good funds, it could take years to get back to even.

How do you read that table? Easy!

After each fund’s name, we identify its Lipper peer group and then share its downside capture for two different periods. Columns 3 and 4 are the downside capture relative to the stock market over the past 18 months, which I identify as a high-inflation period, and since the fund’s launch. Columns 5 and 6 report the same information relative to the bond market’s movements. The last column tells you how long it’s been around; obviously, a fund with 30+ years of history might carry a bit more weight in your mind than a fund with six or seven years. For numbers people, we include the actual downside capture (8 means a fund captured 8% of the market’s decline, -11 means a fund rose when the market declined). For the rest of us, we color-code the box: blue is best, green is good, yellow is average, orange is below average, and red (none on my chart!) is the basement.

We only identify the downside capture relative to the asset class in which a fund invests: stock funds versus the S&P 500, income funds against the bond aggregate, and FPA Crescent against both because it invests in both.

As a bonus, we included two other risk-return measures for you. If a fund’s name is in a blue box (FPA Crescent, for instance), that signals that MFO designates it as a “Great Owl” fund for having achieved top 20% risk-adjusted returns for the past 3-, 5- 10-, and 15-year periods. The MFO Rating ranks a fund’s performance based on risk-adjusted return, specifically Martin Ratio, relative to other funds in the same investment category over the same evaluation period. The same color-coding applies: blue is top 20%, green is good, and so on.