This time it's different ? I’ve never seen such heightened speculation across the wide investment spectrum. There’s been spec before - but I fear the new crop of retail investors is unprepared for what may happen. Should we worry? Not a lot. But a good analogy might be driving 70-80 mph on a crowed interstate surrounded by other nearby vehicles operated by drunks or folks who aren’t watching the road. All can seem perfectly “normal” until someone begins swerving out of control and brake lights begin flashing in every direction. In the end, everyone pays for the excesses of a few.
Noteworthy among small retail investors, there’s significant leverage being employed. And there has arisen a plethora self-made internet gurus who amass large followings ready to pounce on their next recommendation - or perhaps sell some hapless stock all on the same day. As the M* piece notes, markets can remain in a state of elevated exuberance for years or even decades. But, if history is a guide, the eventual declines can last for years at a time and be brutally painful.
I can’t recall such wild swings in the value of some assets. Energy stands out to me, with crude oil futures going negative in early 2020 and than rapidly gaining about $140 per barrel to $86 about 15 months later. This leads me to believe there’s a lot of hot money chasing assets. If it’s happening to oil, it’s likely happening to other assets. Can’t even get my head around crypto. But it makes the above mentioned swings in oil meager by comparison. Jamie Dimon, head of J.P. Morgan, is no idiot. His assessment is that Bitcoin is worthless.
There’s notably less public concern today than in the late 90s before the “tech-wreck” which saw the NASDAQ drop about 50% in a matter of days, while dragging down other markets along with it. It was more than a decade before the NASDAQ got back to its 2000:high. Where is Alan Greenspan with his “irrational exuberance” warnings of the late 90s? Or Vanguard with its “Trees don’t grow to the sky” cautionary statement to its investors around than?
What to do? Anybody’s guess. None of us can predict the future. Saying that many assets are in speculative territory does not lead to any particular solution. Some of the answer resides in age, risk tolerance and individual skill-set. Some in ancillary issues like pension, home ownership, dependents, life style. A good portion of the answer, however, resides in one’s macro view of how things will evolve going forward. For example, one view is that asset prices will eventually deflate. Another view says paper currencies will be devalued (thru price inflation) making today’s asset prices reasonable. Politics (often heated) here and abroad, has also become an ingredient to be reckoned with when trying to assess the macro view. And there exists, too, a middle road on which there may be winners and losers. We tend to segregate “investments” into domestic stocks and bonds. Simplistic of course. That overlooks potentially attractive foreign markets. And there are assets like real estate, commodities, infrastructure, floating rate loans, gold and silver; as well as derivatives like puts, calls, options, futures that a skilled professional can use to advantage or to reduce overall risk in heated markets. Funds that lean on such approaches have been highlighted recently in the MFO commentary. While I own some such funds, I don’t find them particularly worthy of note.
November Commentary is live! @hankBetter keep and buy more bonds. They do have positive returns, even into the negative yield zone; as with German Bunds.
Would be nice to be so prescient and and confident as the folks who are able to see into the future of 10
years, or whatever.
November Commentary is live! The Bank of America has now joined the “dead for the long term” party. They now project that the S&P 500 will return somewhere between zero and a bit below zero annually for they next ten years. That’s perfectly in line with Research Affiliates’ projection of a negative 0.5% annual return for the broad US stock market and wildly more optimistic than GMO’s regression-driven estimate of negative 7% annual returns for the next seven years.
Brings to mind “If a tree falls in the forest ...” :)
Regards
Women May Be Better Investors Than Men I didn't interpret your comment that way.
Speaking from experience, sometimes doing nothing is the best option but it may be difficuilt not to tinker.
I believe Jack Bogle said: ""
Re;
“Don‘t Do Something - Just Stand There!” David has used the expression with effect in one or more of his
Commentaries.
Bogle was a class act. Would like to have heard his take on today’s markets. While I tinker a lot, fortunately it’s with only 2-3% of assets - just around the edges. Enjoy it. But I’d have more money if I’d sunk 100% in PRWCX 25
years ago and followed with a “RipVanWinkle” act!
Sprott Uranium Miners ETF in registration Uranium prices have jumped a lot recently, as new meme stock traders have suddenly gotten interested in trading shares of the Sprott Physical Uranium Trust, symbol SRUUF on OTCMKTS, or U-U.TO on the Toronto Stock Exchange.
Relationship of Uranium and Gold.
Uranium’s Message For Gold into 2022
The message from uranium prices is that gold prices are headed higher. And I have no idea why this relationship works.
Six years ago, I uncovered an interesting leading indication relationship, wherein the movements of uranium prices tend to show up again about 7 months later in the movements of gold prices. I cannot think of any reason why this should matter for gold prices, nor why 7 months seems to be the magical lag time.
weekly_chart/uraniums_message_for_gold_into_2022
REMIX - Standpoint Multi-Asset Fund (November Commentary) I have tried a number of different managed futures funds over the years, and find that AHLPX has the best track record. BLNDX has beaten it with about the same risk, but I assume that is because BLNDX can use equities.
M* says BLNDX started in 1/2020 and lost 8% during Covid, beating other hedged equity funds like JHQAX and GATEX, as you might suspect. AHLPX made money that month, however.
Another MFO hedging favorite CTFAX also lost 9%
Lots of different ways to hedge the downside, but it is hard to predict in advance which one will be most effective.
I rarely own Alternative funds but have again been scoping some recently. So please bear with me with this question.
AHLPX is in the same Alternatives subcategory of "Systemic Trends" as PQTAX. Not sure of their respective managed futures exposures and portfolios could be significantly different,
That said, if it were me deciding between the two, all performance metrics I usually review would point me to selecting PQTAX over AHLPX. Volatility is not as an important a metric to me as I subscribe to the axiom of a venerable, former M* who routinely reminded us, "Volatility is the price you pay for growth."
Could/would you have time to compare/contrast these two funds, especially their holdings which are a wee bit above my pay grade, and state why you would/did select AHLPX over PQTAX.
TIA and understand if not interested in responding.
REMIX - Standpoint Multi-Asset Fund (November Commentary) I have tried a number of different managed futures funds over the years, and find that AHLPX has the best track record. BLNDX has beaten it with about the same risk, but I assume that is because BLNDX can use equities.
M* says BLNDX started in 1/2020 and lost 8% during Covid, beating other hedged equity funds like JHQAX and GATEX, as you might suspect. AHLPX made money that month, however.
Another MFO hedging favorite CTFAX also lost 9%
Lots of different ways to hedge the downside, but it is hard to predict in advance which one will be most effective.
This Risk Free Bond Now Pays 7.12% Came across this elsewhere. Thought I’d pass it along.
Story on I BondsREAD the conditions. The rate is guaranteed only for the first 6 months before it resets. Must keep for 1 year. 3 months penalty if redeemed in under 5
years. Taxes apply when redeemed.
With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's Our state (MI) sets spirit prices for some weird reason. Retailers can charge more if want - but rarely do. Overall, Scotch hasn’t moved much over past several years. One of the better values is Dewars 12-Year at $30 - a noticeable cut above their popular White Label. JW Black, a favorite of mine, runs $40 - occasionally $2 less. Aberfeldy (single malt) at $40 is the best buy going IMHO.
Services seem to be where the prices have risen the most. Noticed big jump picking up a few shirts I had laundered recently. As I remarked on another thread, there’s a 2-3 week wait in our area for car / truck repair. A $335 bill for replacing a front wheel bearing on my pickup nearly knocked me over. But when I checked online, the price was right in the ballpark.
Looks like some of Morningstar’s prices are stale tonight. Yes, I see stale and incorrect stuff on Portfolio Manager. I sure am happy NOT to be paying for PREMIUM, myself. This has been repeated over and over already: they just don't care anymore, going back several years. If they get stuff right, then it's right. Otherwise... Yawn.
Needham Small Cap Growth
Needham Small Cap Growth Wonder what others’ thoughts are on this fund which is classified by Lipper as Small-Cap Core and is a Great Owl over 3/5/10 years?
It has a five-year upside capture ratio of 112.86, downside capture ratio of 63.68, and max drawdown of 16.24%.
Max drawdown over its lifetime (since May 2002) is 35.75%.
The investor class NESGX is a bit pricey with an ER of 1.89 plus 12b-1 of .25 but its institutional class with ER of 1.22 is available at Schwab with a minimum of $2,500/$1,000 (IRA) and the usual TF.
Asset transfers to Vanguard Thanks,
@msf. I tried (copy-paste) the link from your post in both firefox and Microsoft edge. In firefox, it led me to the previous process of Yodlee or print and snail mail. In Edge, it took me through a process similar to what you had posted, eventually getting to the Review and e-Sign tab. In the
Review and e-Sign tab it does not have any space for e-signing and dating the application but has a Submit button. I clicked the submit button, another popup opened asking me to accept electronic communication for new account opening. Because I did not ask for a new account, I did not accept and so it said the transfer request can not be completed. I logged out, closed the browser. Reopened Edge and started the process again and this time I accepted the electronic communication for new account opening, even though that is not what I was doing. That took me to the next page which is Print and Mail the application asking me to print the pre-filled form and snail mail.
So, bottom line is, a third process with all the promise and the same Vanguard result.
Enough with asset transfers to Vanguard.
I am sorry we wasted so much of everybody time on the weekend trying to make Vanguard work for us.The current CEO of Vanguard was hired in 2002 when he was a 30 yr old as Chief Information Officer to bring Vanguard into the electronic age. He spent in that role for four
years and was rewarded for his work eventually leading to his current role which he has held for the past three
years.
https://www.linkedin.com/in/mortimerjbuckley/
Slow integration of TD Ameritrade accounts into Schwab My TDA accounts are grandfathered for a commission rate of just $15 to purchase non-NTF mutual funds such as Dodge and Cox or Vanguard. I'm waiting to see if Schwab honors that rate. (I suspect that I would lose that benefit if I transferred my TDA accounts to Schwab before the integration.)
May be call Schwab and ask the question. If they agree to honor, then transfer now to lock in; otherwise, enjoy the benefit for another 2
years. They may honor now not to lose you to a competitor who may offer large incentives to get your accounts.
Vanguard Customer Service Most of Vanguard's index funds offer ETF class shares, so one can avoid using the Vanguard platform to invest in those funds. However, none of Vanguard's allocation index funds (target date, target risk, or "traditional balanced") or tax managed index funds have ETF class shares.
Oddly, neither does VFTAX even though Vanguard has three ETF-only ESG funds.
https://investor.vanguard.com/investing/esg/I agree with you about the last three firms you mentioned. I find Vanguard serviceable, the others not so much.
E*Trade - ran my employer's stock purchase plan. Refused to let us sell shares of a new company created in a spinoff. Forced us to open a new retail E*Trade account or to pay E*Trade to get the shares out. I didn't appreciate being held captive.
Merrill Edge -
here's the thread I started a couple of
years ago; 'nuff said.
TIAA - impossible to navigate, reducing offerings. They used to offer a simple, vanilla brokerage IRA. No longer. Now all they offer is an IRA annuity with a brokerage window. Since it's an annuity you can't just have another brokerage pull your assets (not even cash). And to open this oddball IRA you have to be "eligible".
https://www.tiaa.org/public/pdf/eligibility_flyer_external.pdf
Asset transfers to Vanguard A few years ago, I tried to transfer a fund from Fidelity IRA to Vanguard IRA and Vanguard required that I obtain a medallion signature on the Vanguard paper work. I was not going to jump through the hoops and did not transfer - the Vanguard customer service told me if I transfer cash, then medallion signature would not be required - did not make any sense to me but I was not going to be out of the market to accommodate Vanguard. This time I am trying to transfer from taxable to taxable. Selling else where and transferring cash to rebuy at Vanguard is not a viable option. May be I will wait for Vanguard to become a for profit company or will consolidate assets from Vanguard to a different brokerage which Vanguard allows very easily.
