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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.
  • HSAs
    @yogibearbull, she is still employed (she figures at least two more years) and her employer does not require her to sign up for Medicare. She signed up for Medicare Part A when she turned 65 to get it out of the way and because it was free, not thinking that she may be interested in an HSA. Her employer seems to be cutting healthcare costs by increasing her contribution and changing to a Blue Cross plan with higher co-pays and deductibles.
  • HSAs
    @Mona, yes, HSA contributions are not allowed while on Medicare.
    Employers may now require Medicare signup for eligible employees. Mine kicked me out of the group plan as soon as I became Medicare eligible (as a retiree).
    One huge benefit of HSAs is years of buildup of funds and that won't happen with late signups.
  • SLADX, FAIRX, MetWest Total Return and GIM
    If you want exposure to JOE just buy it! Why pay the fee? FAIRX owns 35%.Berkowitz lost me years ago with his erratic concentrated positions
  • High Yield Bond
    Funds mentioned have a bulge in 5-yr SDs. That is because they have full impact of pandemic 2020. The 3-yr window is just getting out of the main pandemic hit, and 10-yr reduces the pandemic impact as there are many non-pandemic years. That is why it is also useful to look at charts beyond summary statistics.
    Another thing to note is that funds evaluated are of different types - ST-HY, IT-HY, multisector (that includes sovereigns + corporates + HYs + EMs), so they are expected to behave somewhat differently.
    HY indexed ETFs are HYG, USHY, JNK, etc.
  • High Yield Bond
    Unlike Mr. Sherman, I assumed the OP was talking about 3 yr stddev, because OSTIX's 5.46% is close to the target 5.20%. The latter is just enough lower to make it worth looking at a fund that is at least that much "better". In contrast, OSTIX's 10 yr stddev of 4.68% is not close to the 5.20% target.
    Here's another fund that beats OSTIX over 3, 5, and 10 years with 3 year std dev below 5.2%.
    MDHIX (avail @$2500 min in Fidelity IRAs)
    Returns (10/27/23) 3.68% 3.64% 3.96%
    Risk (09/30/23)
    Sharpe 0.46 0.28 0.58
    Std Dev 4.24 6.26 5.13
    Upside 78% 75% 78%
    Downside 6% 29% 14%
  • Selling Like Hotcakes - PIMIX, DODIX
    I warned about PIMIX since early 2018 (after holding it for about 7-8 years at a huge %) when I sold it and never looked back. RCTIX is a good replacement.
    But, most bond funds have done badly since early 2022 because the Fed have been raising rates. In that environment, bank loans shine...and they did (less in 2022 and a lot more in 2023).
    EIFAX is my LT favorite BL but FAFRX has been shining for months. A chart of all 5 proves it. (https://schrts.co/sszRneNS).
    In fact, in 2023 EIFAX+FAFRX beat most generic stock categories such as SPY,IWM(SC),VGK(Europe),EEM while growth/QQQ beat them all easily. See YTD chart(https://schrts.co/yKTxTKtQ)
    Who said that bonds can't make money?
  • Does the market know something we don’t?
    @BaluBalu- This question has risen several times over the years. If I understand the situation correctly, the software platform used here does not support that option.
    Pl read the last conversation I had with David (and @hank) on the subject. My recollection is it was an investment decision.
    Do we have Ignore Thread feature?
  • Does the market know something we don’t?
    @BaluBalu- This question has risen several times over the years. If I understand the situation correctly, the software platform used here does not support that option.
  • Does the market know something we don’t?
    If the U.S. is in such dire straits, what is the fascination with U.S. government issued / government backed paper? What gives you confidence that this government’s Treasury Department would make good on those T-Bills 3, 4 or 5 years out? What makes you think the FDIC wouldn’t be corrupted by than and your “government backed” CDs held worthless?
    Is it wrong to assume that your chances of getting your money back are at least as good as (and possibly better than) those government “guaranteed” pieces of paper if wisely invested among a portfolio of good corporations? And if your machinations about this country’s future are dark and foreboding, why not move some of your assets abroad to safer havens? Foreign domiciled companies? Swiss francs? How about hard assets like gold and silver or real estate?
    Even a badly adrift thread like this might lend itself to some serious discussion of investible assets.
  • SIGIX and DODEX
    DODEX was discussed in the following MFO thread.

    +1
    D&C is a fine house. Low fees for actively managed funds. I was there (no longer am) about 20 years. Always felt like they were a bit more aggressive on their equity investments than some, which paid off handsomely if you had the patience to hang in there. Just an unscientific impression. Privately held (I like) and a history dating back to the 1930s.
    I also like D&C for many of the reasons you state.
    1) Privately held
    2) Low expense ratios for active funds (right out of the gate)
    3) Team-managed
    4) Managers and analysts are long-tenured
    5) Never created mutual funds to take advantage of latest investments fads - manage only 7 distinct funds
  • SIGIX and DODEX
    DODEX was discussed in the following MFO thread.
    +1
    D&C is a fine house. Low fees for actively managed funds. I was there (no longer am) about 20 years. Always felt like they were a bit more aggressive on their equity investments than some, which paid off handsomely if you had the patience to hang in there. Just an unscientific impression. Privately held (I like) and a history dating back to the 1930s.
  • CD versus Money Market Rates
    Just checked CD and MM rates at Schwab. Lots of CDs in the 5.5 range, and for the first time in awhile, all CDs from 3 month to 5 years, are paying at least 5%. That seems to project a lot of confidence by banks that CD rates are going to stay high for a long time. For those more interested in liquidity, MMs are paying as high as 5.23% to 5.38% in their Prime MM Funds.
  • 529 Plan Vanguard Interest Acc Portfolio/Nevada Short term Reserves fund
    VG Interest Accumulation Portfolio looks like a stable-value (SV) fund within 529. It owns a combo of insurance contracts, institutional CDs and a big chunk in VMFXX. Its 2.63% yield is nothing to write home about even for the SV funds. But if you go back to the years of ZIRP, it probably did better than m-mkt funds and T-Bills. Vanguard probably designed this "camel by committee" to meet the requirements of state 529s.
    Good to know that 529 material at the YBB site was helpful.
    https://www.bogleheads.org/forum/viewtopic.php?t=396160
    https://investor.vanguard.com/accounts-plans/529-plans/profile/4528
  • Does the market know something we don’t?
    Starting to think when and at what point do folks throw in the towel and say no mas? Boomers have most of the shekels...why fart around when you can lock in 5% plus for the next year or two or three ..markets way overvalued, especially you look at apple at 30x with no growth for two years or something....when the giant flow machine reverses when folks start losing their jobs, whoosh look out below...
    I'm looking at funds like MRFOX, PVCMX, LOGOX. That don't hold a ton of the widely held index funds top stocks...truth be told, very small portion of portfolio likely just doing it out of habit. Mostly in tbills and CDs
    Wondering if we'll go back to the 60s savings, no screwing around in the casino with your life savings... how are companies going to roll over debt when they need to refinance at higher rates?
  • Does the market know something we don’t?
    We might be stuck in the "malaise" period for equities. After accounting for inflation, the real returns might not be kind.
    Bonds could easily end up outperforming equities these next few years, though long-term bonds might endure some additional pain as 2023 closes. Heck, bonds might steal the show in 2024.
  • Does the market know something we don’t?
    “How is the market hanging in there under the current circumstances?”
    “… strings and ceiling wax and other fancy stuff”
    But I’m not certain your original premise is fully accurate. A check of Bloomberg shows all 3 major indexes well below their 52 week highs. Until yesterday the Dow was actually in negative territory for the year. And if you compare the Dow to where it was 2 years ago, it’s substantially lower.
    DJI close on October 29, 2021 35,816
    DJI close on October 24, 2023 33,141
    (*Quotation from ”Puff the Magic Dragon”)
  • Leuthold: it's "into the dumpster"
    Leuthold's summative metric is the Major Trends Index (MTI), which is a sort of weighted average of 140 individual metrics that their research says is predictive of the market's prospects. In the past week, the previously negative reading (-2) has worsened as the market's technicals (measures such as advance/decline lines and breadth of movement) have deteriorated. The MTI is now at its worst possible reading, -3.
    Here's their summary:
    The Major Trend Index slipped another notch to -3 in the week ended October 20th, thanks to a two-point breakdown in the Technical category. All four of the MTI’s factor groupings are now negative, supporting a defensive stance toward the stock market.
    Leuthold tactical portfolios—including the Core Fund, Core private accounts, Core ETF, and Global Fund—are all positioned with net equity exposure of 43%.
    On a short-term basis, it’s troubling that a market setback as internally deep as the current one hasn’t resulted in more improvement in the Sentiment work. The “wall of worry” accompanying much of the 2023 market action has morphed into a “slope of hope.”
    On a long-term basis, it’s worrisome that S&P 500 valuation measures still look so high, despite the index having gone nowhere in the last 29 months. But there’s a silver lining to this year’s incredibly narrow market action: The “average stock” in our Leuthold 3000 universe has sunk to even lower valuation levels than seen at last October’s bear market lows.
    Across the 40 inputs to the Technical category, there were zero upgrades and nine downgrades.
    In the last three months of decline, LCORX has lost 50% of what its peers have; over the past three years, its made 250% of what they have (per Morningstar).
    The LCORX homepage, which is moderately interesting.
  • Matt Levine- Money Stuff: Nobody Wants Mutual Funds Now
    It feels like there are two dominant retail investment strategies:
    1. Buy and hold index funds, or
    2. Actively trade individual stocks and, while you’re at it, maybe options or crypto.
    Many ordinary people do not want to think about their investments much, and modern finance has designed a product that is ideally suited for them. It is the index fund (or index exchange-traded fund), whose essential thesis is that thinking about investments is unnecessary and in fact bad, and you should just buy the market and save on costs.
    Other people, though, do want to think about their investments, and they want to think about investments that are fun to think about: stocks (or options or crypto) that are volatile, stocks of companies that do fun or interesting or world-changing things, stocks of companies with charismatic and entertaining chief executive officers, meme stocks.
    There is not much in between. In particular, the whole industry of active mutual fund management is built on the idea that, if you don’t want to manage your investments, you can pay someone else to do it for you. But that idea feels passé in 2023. These days, if you don’t want to manage your investments, the accepted approach is to pay someone else almost nothing to almost not manage them for you: An index fund will do almost no managing and charge almost no fees, and that is widely considered the optimal approach. And if you want to manage your investments, you want to manage your investments; you want to pick fun stocks, not hire a star mutual fund manager to do the stock picking for you.[1]
    Where does that leave the active mutual fund managers? Bloomberg’s Silla Brush and Loukia Gyftopoulou report that things are bad for them:
    Across the $100 trillion asset-management industry, money managers have confronted a tectonic shift in investor appetite for cheaper, passive strategies over the past decade. Now they’re facing something even more dire: The unprecedented run of bull markets that buoyed their investments and masked life-threatening vulnerabilities may be a thing of the past.
    About 90% of additional revenue taken in by money managers since 2006 is simply from rising markets, and not from any ability to attract new client money, according to Boston Consulting Group. Many senior executives and consultants now warn that it won’t take much to turn the industry's slow decline into a cliff-edge moment: One more bear market, and many of these firms will find themselves beyond repair. …
    More than $600 billion of client cash has headed for the exits since 2018 from investment funds at T. Rowe, Franklin, Abrdn, Janus Henderson Group Plc and Invesco Ltd. That’s more than all the money overseen by Abrdn, one of the UK’s largest standalone asset managers. Take these five firms as a proxy for the vast middle of the industry, which, after hemorrhaging client cash for the past decade, is trying to justify itself in a world that’s no longer buying what it’s selling. …
    “It’s a slow but surely declining trajectory,” said Markus Habbel, head of Bain & Co.’s global wealth- and asset-management practice. “There is a scenario for many of these players to survive for a few years while their assets and revenues decline until they die. This is the trend in the majority of the industry.”
    Cheery! What do you do about this? One approach is to get into some adjacent business that does not rely on stock-picking; Abrdn “cut the business into three parts: a mutual fund business, a wealth unit that also serves retail investors and a platform for financial advisers — a strategy that has yet to prove it’s working.”
    The other approach is for active managers to get out of liquid easily indexed public markets and into something else. Abrdn has also “largely abandoned competing in large-cap equity funds, choosing instead to emphasize small-cap and emerging-market strategies.” And of course there is private credit:
    For many other firms, private markets — and, specifically, the private-credit craze — are now the latest perceived savior. Almost everyone, from small to giant stock-and-bond houses, is piling into the asset class, often for the first time. In the past year and a half, a surge in M&A in the space has been driven by such houses, including Franklin, that are eager to offer clients the increasingly popular strategies, which typically charge higher fees. Others have been poaching teams or announcing plans to enter the space.
    “I think that’s a big driver for many of these firms — they look at their own financials and think about what’s going to keep us afloat over the next few years,” Amanda Nelson, principal at Casey Quirk asset-management consultancy at Deloitte, said in an interview.
    “Just buy all the stocks” is a cheap and easy investing strategy that is also endorsed by academic research, but “just make private loans to all the buyouts” sort of obviously doesn’t work. So there is room for investment selection, and fees, there.
    Meanwhile at the Wall Street Journal, Hannah Miao reports that actually retail stock-picking works great:
    Wall Street has long derided amateur investors as unsophisticated market participants, prone to buying high and selling low. But the typical individual investor’s long-term mindset and penchant for risk-taking has proved fruitful in the technology-driven market of the past decade, defying the “dumb money” caricature.
    The average individual-investor stock portfolio has risen about 150% since the beginning of 2014, according to investment research firm Vanda Research, which began tracking the data nine years ago. That beats the S&P 500’s roughly 140% during the same period.
    Some of this is about stock selection: Recent years have been good for the stocks that retail investors tend to like.
    The typical small investor holds an outsize position in megacap tech companies. Apple, Tesla and Nvidia alone make up about 40% of the average individual’s stock portfolio, according to Vanda. Although big tech stocks plunged last year, those investments have dominated the market for most of the past decade and have helped fuel the S&P 500’s 10% advance this year.
    But some of it is apparently behavioral: Individual investors can be more contrarian than professionals can.
    One advantage small investors have over professionals: They don’t have to worry about reporting performance to clients. That helps some individuals feel comfortable riding out market downturns. …
    Everyday investors are known to buy the dip, piling into markets during weak periods. Many jumped into stocks in March 2020 when the market plunged at the onset of the Covid-19 pandemic, and rode the high as shares rebounded.
    Crudely speaking, if index funds offer market performance, and retail investors on average outperform the market, then professional investors on average will underperform the market: “Over the past decade, about 86% of all large-cap U.S. equity funds have underperformed the S&P 500, according to S&P Dow Jones Indices.”
    This seems bad for the big asset managers? They are squeezed from both sides: There is the rise of indexing, but there’s also the pretty good performance of individual investors who pick their own stocks. For a long time now, one argument for active management has been along the lines of “sure index funds look good in a rising market, but wait until the market goes down; then people will see the value of active stock selection.” But in fact people have seen the value of owning a lot of Apple and Tesla, which they can just do on their own. The real argument for active management surely has to be something like “sure index funds and also individual stock trading look good in a market dominated by the biggest names, but wait until Tesla and Apple underperform and the way to make money is by buying stocks that retail investors have never heard of.” Which is a harder pitch.
  • M* JR on Rolling Returns
    At age 75, longer term rolling returns is not that meaningful to me personally. My focus has become more short term, and it appears to me, that we are transitioning away from the lengthy bull market that started in the early 2000s. Low interest rates, and government stimulation, were major factors in the stock market for "about" the last 20 years. What will drive the market in the next 20 years is a mystery to me, but it is highly unlikely that I will be around long enough to see if those charts are anything like the past 20 years.
  • Leuthold: the lights have all turned red, time to lighten up on stocks
    @racqueteer
    To be clearer, and to support my statement, FPACX has done better 3y, 1y, and ytd.
    Cumulative. I do not look at, care about, or judge by single years.
    That's all. Don't own any of them currently, but wish I had for the last decade.
    >> ... can’t see a good reason to prefer it over the other two.
    Again, as I said, whether UI matters. (Also the matter of availability.)
    I don't want to come off as being argumentative generally, but I think this is an important point...
    The 3y and 1 yr figures are heavily influenced by the ytd figures. In a sense, you're counting them over and over this way. As a result, recent returns skew those two values. That's why I prefer to look at rolling or annual results for decision-making, but not "single years". I think it potentially gives one much more insight into performance. That FBALX and PRWCX have dominated during an 11-year period makes me prefer them long-term. That FPACX is performing well in the last couple of years makes it interesting as a current choice. That it is available, whereas PRWCX is not, is certainly a point in its favor.
    Now, at the risk of appearing ignorant, and because I've been unable to come up with an answer independently, what is "UI" again?