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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Brace yourself: 10 steps to take now to prepare for the next recession
    I woke up this morning to see headlines that Tweety Amin expressed 'second thoughts' about increasing the China tarriffs. Then, 2 hours later, the WH says he meant to say he had 'second thoughts' about the percentage of the increase and that it should've been higher, and his talking heads are reinforcing that on the bobblehead shows here. If this was during market hours, we'd have seen more 500-point whipsaws in the Dow.
    The pathetic thing is that Nobody. Can. Plan. Effectively. China fiasco aside, he's flailing more and more ... i.e., the economy is 'booming' and the 'best ever' but he needs the Fed to cut rates anyway. He announces, or hints of announcing, something and then needs others to clean up after him before he reverses/suspends his decision once it polls poorly. Yes, there's the usual marketplace uncertainty we all accept as investors, but we've got a whole new level of instability here -- and then factor in algos that trade off of headlines between themselves, and you have a recipe for disaster. Speaking of algos, gods help us if the idiot rambles about gun violence, war, and the markets in the same tweet.
    He was actually tweeting jokes about the Dow's drop on Friday, too. Average Joe/Jane investors may be nervous about their financial well-being, college funds, retirement plans, etc, and he's totally oblivious to them -- just has to snark on his political opponents quitting the race. Because, it's all about him and being the authoritarian strongman bully.
    I shudder to think what this regime would have done if they were in charge during the GFC. We'd probably still be in it, based on their current track record for effectiveness, planning, and competence. But it'd never be *his* fault, because in the world of delusion created by his liddle stable genius chosen-one mind, he can do no wrong, ever.
    GRUMBLE.
    rforno in Fund Discussions
  • Chuck Jaffe: Fake ‘Expert’ Diminishes The Value Of Genuine Financial Help
    FYI: Patricia Russell wanted to help.
    That’s what she wrote me in an email offering to be a trusted, helpful resource for my work. She was a certified financial planner, and the founder of FinanceMarvel.com, a website about getting out of debt, repairing and improving credit scores and more.
    Regards,
    Ted
    https://www.seattletimes.com/business/ake-expert-diminishes-the-value-of-genuine-financial-help/
    Ted Ted in Fund Discussions
  • How To Prepare Your Portfolio For The Worst When The Worst Is A Real Possibility
    FYI: Doomsday scenarios don’t have to come with the hype, speed, and spectacle of a Hollywood blockbuster. The biggest threats today are slower-moving and decidedly less visual: The U.S.-China trade war could become an all-out conflict that plunges the world into recession and undoes globalization; a Japan-like deflationary funk could spread through the U.S. and Europe; or state-sponsored hackers could paralyze critical infrastructure, undermining confidence and sparking a cyberwar.
    A relatively healthy U.S. economy, along with global central banks’ willingness to cut interest rates, have allowed some measure of optimism, despite alarming headlines. In fact, investors’ equity holdings as a share of their financial assets hovered around 30% earlier this year; the last time it was higher was in the late 1990s.
    But that’s exactly why some strategists, fund managers, and financial advisors are beginning to consider the investment versions of survivalists’ supplies, including Spam, gas masks, and gold. “It’s really the first time in seven or eight years that we are starting to meaningfully derisk across portfolios,” says David Carter, chief investment officer at Lenox Wealth Advisors, which oversees $2 billion. “Whether the tariff war escalates or lingers, the downside is a no-growth world where risk sentiment evaporates. And central banks around the world are trying to provide a safety net, but it’s a small net with a lot of holes.”
    Regards,
    Ted
    https://www.barrons.com/articles/how-to-prepare-your-portfolio-for-the-worst-when-the-worst-is-a-real-possibility-51566603417?mod=past_editions
    Ted Ted in Fund Discussions
  • Stock volatility spurs worst run of ETF withdrawals in six months
    @MFO Members: Same article via Financial Advisor.Com with Bloomberg as its source.
    Regards,
    TEd
    So You Can Read John's Link" InvestmentNews,Com
    https://www.google.com/search?source=hp&ei=WoxfXaC4FurI_Qbh8KzABA&q=Stock+volatility+spurs+worst+run+of+ETF+withdrawals+in+six+months&oq=Stock+volatility+spurs+worst+run+of+ETF+withdrawals+in+six+months&gs_l=psy-ab.3..35i39.4235.4235..6794...0.0..0.76.76.1......0....2j1..gws-wiz.YEttKXTmkB0&ved=0ahUKEwigzfeas5jkAhVqZN8KHWE4C0gQ4dUDCAc&uact=5
    Financial Advisor.Com:
    https://www.mutualfundobserver.com/discuss/discussion/52164/stock-whiplash-spurs-worst-run-of-etf-withdrawals-in-six-months#latest
    Ted Ted in Fund Discussions
  • Byron Wien: Plenty To Worry About, But Not Much for Investors To Do
    FYI: Every summer for the past several decades I have organized a series of Friday lunches in eastern Long Island for serious investors. More than 100 people attend the four sessions, with 25–30 at each one. The participants include hedge fund, private equity and real estate billionaires, venture capitalists, an academic and some corporate leaders. I moderate a discussion of the key issues facing the financial markets for the better part of two hours. This year, several significant events occurred between the first two and the second two sessions. First, the Federal Reserve cut the Fed funds interest rate by a quarter of a percentage point; second President Trump announced a 10% tariff increase on $300 billion of Chinese goods; third, China allowed its currency, the renminbi, to decline to more than seven to the dollar; and fourth, the Hong Kong disturbance took place.
    Regards,
    Ted
    https://www.realclearmarkets.com/articles/2019/08/22/plenty_to_worry_about_but_not_much_for_investors_to_do_103868.html
    Ted Ted in Fund Discussions
  • Vang Wellington VWELX
    It is closed unless you purchase directly from Vanguard. (M* lists it as limited, not closed.)
    From the summary prospectus:
    Important Note Regarding Vanguard Wellington Fund
    Vanguard Wellington Fund will be closed to all prospective financial advisory, institutional, and intermediary clients (other than clients who invest through a Vanguard brokerage account).
    Vanguard fund page: https://investor.vanguard.com/mutual-funds/profile/VWELX
    msf in Fund Discussions
  • The investing opportunity of a lifetime awaits us when the recession arrives
    @Ted- That would be fantastic for a baseball batting average but not so great in financial affairs. I'd bet that your financial batting average beats the hell out of Mauldin's.
    Old_Joe Old_Joe in Fund Discussions
  • M*: The Long View: Guest: Rob Arnott: Don't Sleep on Value Investing (Especially Emerging-Markets
    FYI: Our guest on the podcast today is Rob Arnott. Arnott is partner and chairman of the board of Research Affiliates, a firm he established in 2002, following stints at First Quadrant and Salomon Brothers. He also runs several prominent mutual funds, including PIMCO All Asset. In addition to these duties, Arnott is an accomplished thought leader, having published more than 100 articles in professional journals. Among other plaudits for his work, he has received seven Graham and Dodd Scrolls, awarded by the CFA Institute to the top financial analyst journal articles of the year. An innovator, Arnott popularized the concept of fundamental indexation, which some refer to as smart beta.
    Regards,
    Ted
    https://www.morningstar.com/articles/943058/arnott-dont-sleep-on-value-investing-especially-emerging-markets-value
    Ted Ted in Fund Discussions
  • RiverFront Asset Allocation Income & Growth and RiverFront Asset Allocation Growth to reorganize
    Updated:
    https://www.sec.gov/Archives/edgar/data/915802/000139834419014680/fp0045254_497.htm
    497 1 fp0045254_497.htm
    FINANCIAL INVESTORS TRUST
    RiverFront Asset Allocation Income & Growth
    RiverFront Asset Allocation Growth
    SUPPLEMENT DATED AUGUST 20, 2019 TO THE SUMMARY PROSPECTUSES,
    PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
    DATED FEBRUARY 28, 2019,
    AS SUPPLEMENTED FROM TIME TO TIME
    This Supplement updates certain of the information previously provided in the supplement dated June 13, 2019.
    At a meeting held on June 11-12, 2019, the Board of Trustees of Financial Investors Trust (the “Trust”) approved Agreements and Plans of Reorganization providing for the reorganization of RiverFront Asset Allocation Income & Growth and RiverFront Asset Allocation Growth, each a series of the Trust (each, a “Target Fund” and collectively, the “Target Funds”) into RiverFront Asset Allocation Moderate and RiverFront Asset Allocation Growth & Income, respectively, each a series of the Trust (each, an “Acquiring Fund”) (each, a “Reorganization” and collectively, the “Reorganizations”).
    Shareholders of each Target Fund as of the close of business on August 20, 2019 will receive more information about such Target Fund’s Reorganization in a separate information statement. The Reorganizations do not require shareholder approval and therefore no action is being requested of shareholders. The closing of the Reorganizations will occur in the 3rd quarter of 2019 with an expected date of on or about September 9, 2019.
    As a result of the Reorganizations, shareholders of each Target Fund will become shareholders of the corresponding Acquiring Fund. Shareholders of each Target Fund will receive shares of the corresponding Acquiring Fund with an aggregate value equal to the aggregate value of their shares of the Target Fund held immediately prior to the Reorganization. After the Reorganizations are complete, the Target Funds will be liquidated and terminated. Each of the Reorganizations is expected to be a tax-free, therefore shareholders should not realize a tax gain or loss as a direct result of the Reorganization. The expenses incurred in connection with the Reorganizations will be paid by ALPS Advisors, Inc.
    Purchases with respect to the Target Funds have been disallowed since the close of business on June 21, 2019.
    INVESTORS SHOULD RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
    TheShadow TheShadow in Fund Discussions
  • First Vegan Investment Fund Coming To New York Stock Exchange: (VEGN)
    FYI: (This is a follow-up article.)
    An investment fund designed for animal rights advocates and environmentalists, the first of its kind according to financial experts, is set to begin trading on the New York Stock Exchange (NYSE) next month.
    VEGN, as it will show on the NYSE’s floor, enters the fray of hundreds of funds that consider environmental, social or governance (ESG) factors in their investment decisions but will be unique in going animal cruelty-free, experts said.
    Regards,
    Ted
    https://www.reuters.com/article/us-climate-change-funds-vegan/first-vegan-investment-fund-coming-to-new-york-stock-exchange-idUSKCN1V91XI
    Ted Ted in Fund Discussions
  • Fidelity Advisor Funds
    You can find all the Fidelity Advisor® funds on Fidelity's advisor site:
    https://institutional.fidelity.com/app/item/RD_13569_41600/fidelity-mutual-funds.html?pos=T
    Advisor funds, whether at Fidelity or elsewhere (e.g. T. Rowe Price advisor class shares) have fee structures designed to compensate advisors. That may mean a front end load (e.g. FACDX), increased 12b-1 or added marketing fees (e.g. FHCCX), or a combination of both (e.g. FACTX).
    Even if a share class doesn't have an explicit front end load, those extra fees can be so high (e.g. the 1% 12b-1 fee on FHCCX) that FINRA forces the companies to admit these fees really are loads - the shares cannot be sold as noload funds.
    https://www.sec.gov/fast-answers/answersmffeeshtm.html
    Regardless of how the fees are larded on, they're there to pay one's advisor. Usually one pay these extra fees regardless of whether one uses an advisor. So why not go through an advisor and get the services one is already paying for? Sure one can buy through a discount brokerage but that just sends those fees into the brokerage's pocket.
    Alternatively, one can often buy a retail equivalent for less. Fidelity offers clones of many of the Advisor® funds with no loads and lower fees, e.g. FSPHX instead of the A, C, M classes of Fidelity Advisor® Health Care given above. Though it does not appear to offer a clone for FAGOX.
    msf in Fund Discussions
  • Fidelity Advisor Funds
    Many thanks Ted, I appreciate your reply. I've certainly noticed the higher expense ratios, by the way!
    Still curious why they are called "Advisor" funds if they are open to the retail investor on a direct basis. It suggests to me they are available only through financial professionals.
    Simon in Fund Discussions
  • Fidelity Advisor Funds
    Quick question folks...as a retail investor can I buy Fidelity Advisor Funds (example FAGOX) via my brokerage?
    To clarify, I have a self-managed T. Rowe Price IRA and it seems I can buy several classes of Fidelity Advisor Capital Opportunities Fund through their brokerage for no transaction fee or load.
    I'm confused because the word "Advisor" implies I can only buy and sell Fidelity Advisor funds via a 3rd party (ie: a financial planner or advisor).
    Have I got the whole situation wrong?
    Simon in Fund Discussions
  • These Recession-Proof Stocks Beat The Market No Matter What
    Any editor who uses "Beat the Market No Matter What" for a writer's headline should probably be skewered and roasted slowly over a pit. This is the equivalent of clickbait or financial porn. Although I acknowledge that the pressure for SEO, search engine optimization, on publications is immense, lines should still be drawn.
    LewisBraham in Fund Discussions
  • Should You Buy A Fixed-Income Annuity For Retirement?
    FYI: Plenty of people shudder when they hear the word, “annuity.” Many financial advisors sell them as if they’re life preservers. But they’re usually filled with holes.
    Variable annuities, for example, are widely oversold. An advisor might croon, “These products guarantee that you won’t lose money. They’re also linked to the stock market. So when stocks rise, the value of the annuity rises too.” In 2005, columnist Scott Burns published, Seven Reasons To Avoid Variable Annuities. Today, his logic hasn’t lost its sting. Investors pay stratospheric charges, averaging 2.24 percent per year. That hurts investment returns. Variable annuities can also attract unnecessary taxes. And if investors withdraw early, they usually pay stiff exit penalties.
    Fixed-income annuities, however, look more attractive to retirees. Here’s how most of them work: You pay an insurance company a lump sum. In exchange, they provide a regular income stream for life. It’s much like buying a defined benefit pension. But in most cases, there’s no upward adjustment to cover inflation. *
    Regards,
    Ted
    https://assetbuilder.com/knowledge-center/articles/should-you-buy-a-fixed-income-annuity-for-retirement
    Ted Ted in Fund Discussions
  • Chuck Jaffe's Money Life Show: Guest: David Snowball, Mutual Fund Observer
    FYI: (Slide mouse to 30:20 minutes for David Snowball interview.)
    Episode Info
    John Kosar, chief market strategist at Asbury Research, said that while the market is stuck between a major support level of roughly 2,800 and resistance at 2,950 on the Standard and Poor's 500, it remains in a bullish trend, which he expects to resume after economic cross-currents like trade wars, the inverted yield curve and slowing global growth are worked out. Also on the show, Tadas Viskanta of AbnormalReturns.com discusses who, if anyone, is trustworthy these days in the world of online financial advice and commentary, and David Snowball of MutualFundObserver.com chats about fund investing in an extended Market Call.
    Regards,
    Ted
    https://www.stitcher.com/podcast/moneylife-with-chuck-jaffe/e/63257939?autoplay=true
    Ted Ted in Fund Discussions
  • M*: The End Of Favorable Tax Treatment For Inherited IRAs?
    This is a biggie for me. Thanks, @catch22, for that Forbes link, which contains an excellent article. It even quotes a financial planner in my area whose services may become even more in demand if this legislation passes. My 1040 may have become simpler to fill out, but these changes in rules for distribution of tax-sheltered accounts will really complicate matters.
    BenWP BenWP in Fund Discussions
  • Accusation: General Electric is "bigger fraud than Enron"
    Following is a current article from The Guardian. It is complete as published.
    The whistleblower who called out Bernard Madoff’s Ponzi scheme has accused General Electric of wide-scale fraud in a move that has sent the conglomerate’s share price into a tailspin.
    In a report titled General Electric, a Bigger Fraud Than Enron, investigator Harry Markopolos claims GE is engaging in accounting fraud worth $38bn. He said GE is heading for bankruptcy and is hiding $29bn in long-term care losses.
    “GE’s $38bn in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds,” he writes, referencing two of the largest corporate accounting scandals in history.
    After a year long investigation for an unidentified hedge fund, Markopolos writes he has discovered “an Enronesque business approach that has left GE on the verge of insolvency”. Enron, a Texas-based energy group, filed for bankruptcy in 2001, brought down by a massive accountancy scandal.
    This report is “going to make this company probably file for bankruptcy”, Markopolos told CNBC’s Squawk on the Street. “WorldCom and Enron lasted about four months … We’ll see how GE does.”
    In a statement GE said it “stands behind its financials” and operates to the “highest level of integrity” in its financial reporting. “We remain focused on running our business every day and … will not be distracted by this type of meritless, misguided and self-serving speculation.”
    GE’s share price sank close to 15% after the report was released.
    General Electric is already under investigation by the Securities and Exchange Commission (SEC), the US’s top financial watchdog, and the justice department over accounting irregularities related to its insurance and power divisions.
    Once the world’s most valuable company, GE has struggled in recent years. Former CEO and chairman John Flannery was abruptly removed last year after only a year on the job and replaced by former Lawrence Culp, former CEO of the Danaher conglomerate.
    On Thursday Culp dismissed Markopolos’s report. “GE will always take any allegation of financial misconduct seriously. But this is market manipulation – pure and simple,” he said.
    Markopolos is best known for his role as the whistleblower who warned the SEC about Madoff’s Ponzi scheme. Madoff was jailed for 150-years in 2009 after pleading guilty to swindling investors out of $65bn in savings.
    Old_Joe Old_Joe in Fund Discussions
  • Hasenstab Loses $1.8bn In Single Day As Big Bet Blows Up: (FEMGX) - (TPINX)
    FYI: Fixed income star Michael Hasenstab lost $1.8 billion in a single day’s trading this month as a series of big bets on Argentine assets crashed following a primary election which shook political forecasts, according to the Financial Times.
    The Argentine peso dropped as much as 20% and bond yields rocketed as markets absorbed the consequences of an unexpectedly strong showing by in the presidential race by the populist Alberto Fernández who has selected former incumbent Cristina Fernández de Kirchner as his running mate.
    Hasenstab’s $11.3 billion Templeton Emerging Markets Bond fund tumbled 3.5% on Monday, equivalent to a $440 million loss, according to a FT analysis of Morningstar data.
    His $33.1 billion Templeton Global Bond fund shed 1.8%, or around $592 million. Three other mandates saw accumulative losses of $362 million. Approached by the FT, Franklin Templeton declined to comment.
    Regards,
    Ted
    https://citywireamericas.com/news/hasenstab-loses-1-8bn-in-single-day-as-argentine-bet-blows-up/a1259676?ref=international-americas-latest-news-list
    Investment News.Com:
    https://www.google.com/search?source=hp&ei=uThUXbLPJZTJtQbez77AAQ&q=ranklin+Templeton+fund+biggest+loser+as+Argentine+assets+plummet+11:15+am&oq=ranklin+Templeton+fund+biggest+loser+as+Argentine+assets+plummet+11:15+am&gs_l=psy-ab.3...3509.3509..5283...0.0..0.109.155.1j1......0....2j1..gws-wiz.meys7v5iBoM&ved=0ahUKEwjyj7n05YLkAhWUZM0KHd6nDxgQ4dUDCAc&uact=5
    M* Snapshot FEMGX:
    https://www.morningstar.com/funds/xnas/femgx/quote
    M* Snapshot TPINX:
    https://www.morningstar.com/funds/xnas/tpinx/quote
    Ted Ted in Fund Discussions
  • Chuck Jaffe: How Could $1,000 A Month Change Your Life?
    John:
    If you mean a time where the Treasury (and other sovereign Govts) are unable to service their debts, at least more than for a day or 5, well my crystal ball tells me something else will occur. (see next paragraph) --- Though if you are truly concerned, then the thing to buy is gold bullion. Not ETFs, not mining stocks, nothing with a 3rd party custodian. Just gold, which you self-custody somewhere in your personal residence. The "worst" you can expect from bullion, is that it will retain its purchasing power over time. The "best" is that it soars in value when conventional asset markets become dislocated for some indeterminate period of time.
    Look, the whole world is awash in debt, not just the USA. So there will be a global solution, involving most major currency sovereigns. The CBs already have a playbook to address it, once we approach the financial "cliff". I don't know what's in the playbook, but I suspect ONE of the plays will be for each sovereign Treasury to issue new private-placement debt (PPD) to their respective central bank. The terms of the PPD would be: a) no maturity (i.e. perpetual), and b) 0.0% coupon. So "free money". The proceeds received from the CB to the Treasury could be used to pay off existing public bondholders as those debts fall due. --- So definitionally, there would be no "default". Moving to PPD financing has enormous implications. But the key is, there need not be any "default".
    When will Us bankrupt or default on their bonds
    I worry about my nephews nieces children living in a poor economic system in 20+yrs
    I wonder what potus congress doing about fed deficits beside kicking can down road after 2020
    Think it will be very difficult to pass laws /convince US citizens /tax workers (voters small business owners) >40s% in taxations and rich folks ~ 70% to pay (for all free Healthcare and green deals and 1k monthly each millennials)
    I would vote for yang if he gives me one k monthly and a free Corvette
    As rono would say - time buy more (physical) gold?!? -
    Edmond in Fund Discussions