China's export of deflation may inpact America The following is a heavily edited extract from
a current NPR report:
Diana Choyleva is a senior fellow on China's economy at
the Asia Society. She and others see the potential for deflation ahead as the Chinese economy struggles with a number of issues going forward.
In November, consumer prices in China fell at their fastest rate in three years.China "should be on American's radar because, first of all, China is a huge economy," Choyleva says. "If China is having severe deflation at home, pretty much the only choice left would be [for it] to export deflation."
At first glance, that would seem to benefit consumers buying Chinese-made goods. Instead, it's more likely to mean that U.S.-based competitors will need to lower their prices to compete with a flood of ever-cheaper Chinese products.
"That translates into businesses closing, jobs being lost and consumers being worse off," Choyleva says.
Dexter Roberts, director of China affairs at the Mansfield Center at the University of Montana sees similar concerns. The U.S. and China, he says, "are deeply entwined," and most top U.S. multinationals "secure a significant portion of their revenues and profits from the China market or their supply chains start there."
Meanwhile, China is pumping money into manufacturing to try to offset its slowing economy.
"Ultimately, [China] is going to be producing a lot of goods that they need to sell somewhere, and they're going to be selling them on the cheap. So I would imagine [that] could be a deflationary force."
Note: Text emphasis was added
bond funds for taxable accounts? @davfor, yes, I can think of all those reasons why people might wish for cuts. How many of them have anything to do with the Fed's legal mandate?
The Federal Reserve System has been given a dual mandate—pursuing the economic goals of maximum employment and price stability. Its my sense this fed has succeeded in establishing its inflation fighting credentials. And, the feds goal is to achieve both maximum employment and price stability and to thereby keep the economy growing. There are fairly strong signs the inflation rate may be sustainably trending downward after experiencing a strong spike caused by supply/demand imbalances during the the pandemic. The aggregate supply and demand of workers is also moving towards a balance point. With a sustainable path to achieving the price stability coming into view, it is reasonable for the fed to start shifting more of its focus to reducing the strains and imbalances caused by the interest rate spike (including those noted above). Doing that will help it continue to achieve the maximum employment part of its mandate. Waiting longer than necessary increases the risk of unnecessarily weakening the economy and of increasing the unemployment rate. Will it take 3, 6, 12, or 24 months worth of additional favorable data to provide the fed enough time to confirm that reducing the fed funds rate is prudent? My expectation is that 6 months or less will be enough. But, I am not yet making any significant investment decisions based on that expectation. (What was once the bond sleeve of my portfolio was renamed to be the ballast sleeve several
years ago.)
ICI: 100 Years for Mutual Funds
bond funds for taxable accounts? The Nov-Dec huge performance is over.
Looking forward into 2024 has me considering what is likely to happen if the federal funds rate begins to decline this spring as I think it probably will. By then, the forward looking bond market may well be pricing in rate cuts in addition to those priced in during the latter part of 2023. For the first time in several
years I am fairly optimistic about multisector bond fund prospects for the current year as it begins. (PIMIX is a fair weather fund and will likely do well if 2024 turns out to be a bullish year for multisector bond funds. But, 2021 clearly showed it to be too volatile to include among my bond fund holdings.)
bond funds for taxable accounts? The Nov-Dec huge performance is over.
YTD is what counts now. My "gamble" right now is on funds with low SD + bigger yield, think 8+%, and excellent performance YTD.
There are 4 funds on my short list, I own 2.
https://schrts.co/TeIaWmPuDefinitely not PIMIX and its higher SD and lower yield. I used to own PIMIX at 50+% for
years until 01/2018. The magic has been gone since then. For investors who hold, I prefer RCTIX.
bond funds for taxable accounts? again, FD and others, could you make the comparison not to, say, TUHYX, but specifically to JAAA, since it is far more like the others: good yield, good performance and fairly low volatility (at least for the last 1.5 years). thanks!
T. Rowe Price - Arrrgh! Had TRP accounts for 25 years...the site sucks!!! Way harder to research and navigate that site than Fidelity!!! Glad I made that move!!! Consolidation is big help!
Glad your experience was what it was.
My experience of Fidelity's website is:
Run away! Run away, and be very afraid!Complicated, clunky.
T. Rowe Price - Arrrgh! Had TRP accounts for 25 years...the site sucks!!! Way harder to research and navigate that site than Fidelity!!! Glad I made that move!!! Consolidation is big help!
Writing checks can be risky. Here's how to protect yourself.
Writing checks can be risky. Here's how to protect yourself. @stillersWe have alerts set at one cent on all our accounts with emails and texts. Works great. Texts come in before you leave the store.
It is funny because
years ago we got a second credit card to use "only online" with a lower credit limit than our primary card, thinking online transactions were more risky.
In the decade plus since, that "online only" card has never been compromised but our primary card gets a fraudulent transaction at least every couple of
years. I guess from skimmers. The Visa people don't care, just send us a new card.
Once I bought some wine at a local store with another card I use only a couple of times a year and then within 24 hours there was a fraudulent charge.
Thinking it had to be an employee at the store, I called Visa and told them to investigate and call the cops. They said it was cheaper just to send me a new card.
bond funds for taxable accounts? I sold all of the muni funds in our taxable account last year and reinvested in CDs and Treasuries, as well as an ultra-short bond fund, FCNVX. My CD- Treasury ladder goes out five years, with more issues on the short end. The yield on munis is so much lower than taxable bonds that they don’t seem worth it unless you’re in a higher tax bracket.
Since we have so much money in CDs, Treasuries and short term bonds, I’m taking a little more risk with several moderately conservative allocation funds — namely FMSDX, PRFCX and TAIFX. As long as the yields on CDs and Treasuries remain fairly high, I will probably keep my ladder going as issues mature. I prefer Treasuries over CDs when the yields are comparable because they are more tax efficient and easier to sell if needed.
Writing checks can be risky. Here's how to protect yourself. Glad to see several others recognize the high risks of debit cards.
Bottom Line per my nephew who was a VP of a local bank:
"The riskiest card by far you will likely ever carry in your wallet is a bank debit card."
Along with ONLY using a debit card for ATM transactions, one very effective control we've used for them for many years (and I HIGHLY recommend to all readers here) is an email (or text I would guess) notification of ALL debit card transactions immediately upon occurrence. The bank we use allows customers to set a dollar limit for that control, which we set at $1. It has been our experience that our bank has never missed one of these notifications - I go to an ATM and w/d $200, an email pops into my Inbox. After the fact, but at least immediate notification!
Down Market Strategies Is it reasonable to call PVCMX a tactical allocation fund, rather than an equity fund?
I have liked HFSAX in the tactical allocation category for a while. I spoke with the fund personnel a few years ago but never got around to pulling the trigger because I was not sure how long the manager will work in asset management (single manager fund). Does anyone here by any chance know? He does not need work. I am not sure anyone else can replicate his skill. I think 2022 and 2023 performance is an anomaly relative to the fund's long history.
