Howdy folks,
It's going on as we watch. How can we play it?
All around us, not only in the US, but overseas as well, we're witnessing (and participating in) a General Strike by workers everywhere. 'Take this job and shove it. I ain't working here no more'.
Workers have more power than they've had in decades and they're using it. Deere and Kellogg are out and on the west coast, the TV and Movie peeps narrowly avoided a strike because management caved in on every issue. At Deere, they were offered 5-6% and the workers are saying, Stuff It. I seriously believe the west coast hospital workers will walk and think of their leverage. And folks, this is only the beginning. Pilots can't strike, but they sure can get sick. Oh, and think how easy it is right now to supplement your strike pay. McDonald's is hiring at $21 per hour. This seems to me that the workers are going to win. Tough to bet against them.
The pandemic has created a perfect storm for workers and employment in general.
1. Not safe to go to work because of the virus.
2. Kids at home.
3. Tired of receiving shit wages for shit work.
4. Additional unemployment benefits [although the bs the republicans spread about exacerbating the problem has proven to be just that - BS. Indeed, the states that cut benefits early not only didn't see any reduction in help wanted signs, but it actually hurt their overall economies more than the states that maintained them due to a reduced aggregate demand.]
5. Lack of some spending - travel, dining out, concerts, movies, etc. - has allowed many households to become cash flush.
6. Perfect opportunity to change careers.
7. Virtual options for financial gain - Ebay, Market Place, OnlyFans, etc. My barber has a friend, who is buying Amazon 2nds for peanuts and reselling them.
Sokay, how to play?
Watch for the companies that figure it out and take the 'high road' vs. the ones that don't. A very easy tell, is whether there are Help Wanted signs or not. The businesses with pervasive help wanted signs are having a very tough time even staying open. How many restaurants do you know with reduced hours and menus? Which are simply raising wages and benefits and not bitching.
New industries that get it (e.g. pot. I was talking with a budista and he said, they were receiving great pay and benefits and it was the best job he'd had in years).
Short? Anyone that relies on truck drivers. Again, POT. To drive a semi, you have to have a CDL. With a CDL, you are subject to random drug testing and pot has a half life of 30 days. Hell, they're pushing to allow teenagers to drive. Feh, in my state, you've got to be 21 to buy pot.
Just a start of a discussion.
and so it goes,
peace and wear the damn mask,
rono

I can't buy PIMIX in Fidelity 401k...Grrrrrrrrrrrrrr! I get so disappointed when that happens...it happens a lot!

If your heart is set on Pimco Income, you may be able to buy the somewhat more expensive institutional I-3 share class PIPNX in your Fidelity 401K.
It's a solid long term holding, though it has at best been mediocre in the past three years relative to its peers (46th percentile). You can see that in this M* chart, which compares it to the average multisector bond fund (which it tracks very closely) and to the average high yield bond fund (which has greater volatility but otherwise follows a similar path).

Thanks Edmond...great insights! Full disclosure, our household has 3 retirement accounts currently - IRA Rollover (Me), IRA Rollover (Wife) and a 401k (Me at my current Employer)
The 3 Bond Funds I own (1 in each) are DODIX, BCOIX and GIBLX...
GIBLX is in my 401k and this account s my active/tactical account where I take more risk and move $$$ around. The Rollovers are pretty stable and I like to make minor adjustments.
Next move is to find a Fund to pair with GIBLX in my 401k...I've owned PIMIX in the past and have looked at PTIAX too. I have been tracking TCEIX but I can get that exposure with PIMIX...
Bond Funds are not as easy to research with their returns all muted in the past 5 years and not knowing whats under the hood. Cash isn't cash and Gov't issues could be multiple securities. Derivatives, Sovereign/Non-Dollar denominated debt...

@Mark, Thanks for the Jim Sloan's articles. We invested in FMSDX in our tax-deferred accounts several years ago. It appeared that I bonds cannot be purchased through brokerages and they can purchase only through TreasuryDirect site and the tax refund. I checked my brokerages and only treasury (not I bonds) can be purchased directly.
With that said, we are inclined to use them in our taxable account, but we are unsure how I bond being used in future retirement. So there is much learning to be done.

KHaw -- with Tad Rivelle leaving 12/2022, I'd be looking to leave too.
Baird and D&C are both very good funds. WRT funds at Fido, here are a couple core/core+ funds you may wish to consider/evaluate as to suitability:
GIBLX. These guys tend more to make "high conviction" (read riskier) bets then some other funds. Nothing too wild. And they are usually right, if not immediately, then eventually.
PTIAX = I like the way these guys think/explain their positions. They tend to own pieces of the bond market which other funds don't. To that extent they could serve as a diversifier vs. other bond fund positions.
OMBAX. (mortgage) Actively-managed, since there is little credit risk/spreads, the managers throttle portfolio duration up/down depending on their outlook for the direction of rates. They are adept at this. I've been using this (along with another fund I will discuss below) as a place to park cash for a couple years. Duration is presently less than 1/2 of the AGG. It has discretion to shift duration 2-10 years. They generally take on duration ONLY when they are compensated to do so.
I think PIMCO funds should be given careful consideration. PIMCO is Bill Gross' enduring legacy. Fidelity offers "A" shares. If you have serious money in bond funds, I would encourage buying institutional-class shares. Many are available at Wellsfargo/Wellstrade for no minimums.
PIMIX - my longest-lived, and 2nd largest fund position. As a multi-sector fund, its more volatile than the "core-plus" funds. But its returns justify the modestly higher volatility.
PTRIX (mortgage). My largest bond position. Its among the least-known of PIMCO funds - M* perennially mis-classifies the fund as 'core-plus". Because of its low risk profile its returns seem paltry vs much riskier "core-plus" offerings. PTRIX is really a short/inter govt fund. Like OMBAX (mentioned above), the managers make tactical interest rate bets. They excel at this. Duration moves 1-7 years. This fund is a bit more "free wheeling" than its sister GNMA fund PDMIX. Slightly better returns, edges out just a wee bit more on the risk scale with more non-agencies. Still, very safe. -- For those thinking "mortgages=BORING", keep in mind the "core bond funds" (MWTRX, PTTRX, etc) have been largely managed to be extremely safe "cash like" funds since the GFC. In the past 5 or so years, PTRIX has earned MWTRX-like returns with only 2/3 of the volatility...
good luck!

Interesting article @LewisBraham.
Hmm. Does this take into account companies are less capital intensive than they were 20-30 years ago? Many growth companies are in the tech segment...building out their eco system and capturing customers ala Apple back in the day. Who cares if the customer is profitable now, they will be way profitable over the next five years. Many companies are bought for their technology before they become profitable...MuleSoft, by Salesforce, CRM. Look at Avalara, not profitable I believe but growing revenues, taking market share.
Last I checked non profitable companies don't really pay much tax either...think Bezos and AMZN...churned thru money, not profitable, huge free cash flow to invest back in the business, took market share, scaled business, didn't pay much in taxes...anytime they want they can flip the switch and scale profits
I'm on the fence on this one, respect the wisdom of GMO etc, but wonder if this thought process requires adjustment to today's world?
Best,
Baseball Fan

The Russell 3000 Growth Index was up 84% cumulatively over the last two years through August (more than double the return of its Value counterpart).

Thank you. That is why I preferred actively managed growth over growth-index funds and ETF. I read that small cap stocks in Russel 2000 have even bigger issue.

@lynnbolin2021, thank you for your articles. I too have been reducing risk and using more asset allocation funds including FMSDX. Just want to simply life. Your research helped considerably to narrow down the vast choices available.
Note that the bond portion of FMSDX has a longer duration of 8.3 years than many intermediate term bonds, in the range of 5-6 years. This fund holds several bond sectors ranging from treasury to EM debts. Rate hike may impact this fund more than those funds with shorter duration.

Interesting article: https://gmo.com/americas/research-library/growth-bubble-making-money-on-companies-that-make-no-money/?utm_source=linkedin&utm_medium=social&utm_campaign=growth_bubble

More than half of U.S. Growth stocks* have negative earnings, yet Growth stocks have dramatically outperformed in the past few years

Many years ago, one could get into MWTIX at Fidelity at mere mortal mins (not the current $3M). With the lower ER of MWTIX, the fund might be worth holding. But between the higher ER of MWTRX, the fact that Rivelle will be retiring next year, and the fund's asset bloat, it's likely time to leave.
You might take a look at FTBFX. As a Fidelity fund, the short term/excessive trading restrictions are different than non-Fidelity funds at Fidelity. Not a criterion I would use for a fund in this category, but still a differentiator. And a fine fund generally.
A fund that was brought up recently in another thread is WCPNX. It's having a spectacular 2021 (for a bond fund). Though if one disregards the past year, most of the funds you're looking at (with the notable exception of MWTRX) have had similar returns over the lifetime of WCPNX.
So the question is whether this past year is an anomaly or a sign of better things to come. Note that it has the highest volatility of the funds mentioned.
Which brings us to the criterion of risk. You referenced it implicitly ("love the consistency"); it's worth calling out as an explicit criterion. Here's a page that should help make comparing risk metrics on various funds easy:
http://performance.morningstar.com/fund/ratings-risk.action?t=BCOIX
What I notice when I drop in some other funds is that BCOIX tends to be a bit above average (compared with the other funds I'm looking at) in risk - a higher (but not highest) standard deviation (MWTRX is toward the lowest) resulting in slightly lower Sharpe and Sortino ratios.
Regarding credit risk - M* has an interesting way of calculating risk. Instead of assigning 1 to A rated bonds, 2 to B rated bonds, and so on, M* assigns numbers to each credit rating based on how sensitive bonds with that rating are to market changes. It turns out that BBB bonds are much more sensitive than A bonds. So a few BBB bonds can pull the down average credit rating of a whole portfolio.
I like this way of computing the average credit rating of a portfolio, but many do not. 68% of the bonds in MTWRX are rated AAA, nearly 80% are A or better. And only about 6% are junk. But that smattering of junk is enough to pull its portfolio credit rating down to BBB.
In contrast, BCOIX has only 46% of bonds rated AAA, and 65% are A or better. But since it has only about 4% in junk bonds, those A (or better) bonds are good enough to keep the fund's average rating at an A.

I've been researching via Fidelity and M* for alternatives to MWTRX. I've owned the fund for several years but with performance pretty close due to current market conditions in Fixed Inc, I'm always 'shopping'. Duration, Avg Maturity, Bond Ratings and Expenses are what I've been focused on.
The 2 Int Core Plus Funds that I have zeroed in on are BCOIX and DODIX. I alraedy own DODIX in an IRA Rollover and love the consistency. Other OEF's I've researched are Western, Pru, American, Pimco etc...I worked for Pru for years so I know their funds intimately.
Any other criteria and ideas that you like as much or more than BCOIX? The expense ration alone is more than 1/2 what MWTRX is along with higher credit quality.
Thanks in advance!

Check out WBALX for a solid 30%- 50% alloc fund.

I did quickly, and while the equity part of WBALX may be "solid", I question the performance of the bond portion in the current rising interest rate environment. It makes up 42% of the fund's portfolio, and of that 67% consists of short term US Treasuries and AAA bonds. It's the only balanced fund I have come across where the SEC dividend yield is negative, according to M*.
The majority of the fund's bonds may actually be a detractor from its future performance, unless management makes a change. Holding cash instead may actually be a better choice in the current environment.
My other question is why a "solid" fund like WBALX has accumulated only $223 million in assets over the past 18 years? What am I missing?
Fred

While a negative yield is less than ideal, their short-term bond holdings have probably held up better than many other bond sleeves in recent quarters. That type of allocation is probably why this fund has less volatility. Works for some, not for others.

Check out WBALX for a solid 30%- 50% alloc fund.

I did quickly, and while the equity part of WBALX may be "solid", I question the performance of the bond portion in the current rising interest rate environment. It makes up 42% of the fund's portfolio, and of that 67% consists of short term US Treasuries and AAA bonds. It's the only balanced fund I have come across where the SEC dividend yield is negative, according to M*.
The majority of the fund's bonds may actually be a detractor from its future performance, unless management makes a change. Holding cash instead may actually be a better choice in the current environment.
My other question is why a "solid" fund like WBALX has accumulated only $223 million in assets over the past 18 years? What am I missing?
Fred

Something between refusal and incapacity --- denial, shrug, actual forgetfulness abetted by or aligned with great sloth and increasing casualness about all things.
I am so hoping it turns out that I am misinferring / misinterpreting some of the grim details as I understand them now.
One of their children will be calling TIAA presently, and yes, you might think with millions in an account there would be some sort of heads-up, at least after a couple of misses. But that assumes human examination / monitoring / advising in the first place.
Oh, there will be no leniency.
No Roths involved, of course, all tax-deferred, and this case 'overdeferred' ... I don't know what this 403b allows in its beneficiary regs (reading Dan Moisand on possibilities), but it's a moot point for now, as they may have several more years to live.
I suppose it could be worse. I have helped w taxes w other older relatives, while they could still locate or point me toward records, and never postmortem.

A lot depends I think on how fast rates rise and how much. A gradual increase probably won't hurt bonds much. A rapid increase would. In a scenario where 10-year corporates yield 3% and new issues suddenly yield 6% because of an inflation or default panic, existing bonds yielding 3% would I believe crash hard. But if corporate bond rates gradually increased over a period of years to 6%, the bond market would have more time to adjust to the shift via the income it is already paying to counteract bond price declines and the gradual increase of higher yielding issues in the outstanding bond mix.

The State of MI retired teachers healthcare premiums have actually declined over the last couple of years, but the deductibles and out-of-pocket costs have risen, very substantially. Items like urgent care or ER visits are very costly now, and the drug prices we pay at the pharmacy have risen plenty. It’s much harder to get approval for prescriptions as the insurers constantly force the doctors to rejustify use of a drug the patient has been taking for years. My doctor says his staff spends hours a week talking to retired docs hired by the insurance companies to just say “no” whenever a prescription renewal is presented.
Our Part D provider sends us countless ads urging us to use mail order for refills. One had best read the fine print because there is a $40 minimum charge, even if the Rx is for a month’s supply of Lisinipril, a drug we pay $1.75 for when we buy it at the local pharmacy. If the doctor orders a 90-day supply of the same drug, the pharmacy is required by the insurer to charge us $16. We go in every month because we have always been thrifty.

No telling where this all ends up by YE, but for now...
...with earnings rolling in, futures are UP nicely this AM, and S&P will likely have its 50dma of 4,364 in its crosshairs today/tomorrow (maybe even at today's OPEN).
If it overtakes it, its previous high of 4,537 will come into focus and be the next target on the UP side.
Having done this successfully several times since the 2020 crash, I again BOT this Dip/Diplet. At this stage of the process I wonder if I didn't BUY enough.
Just curious...If you SOLD the Dip/Diplet, what'd'ya do now?
FWIW, I've been there a few times years ago using my old strategy that was driven by capital preservation/loss avoidance, and EACH TIME failed to respond quickly enough. And it cost me.

...Medicare will eat it anyhow.

There's a lot of that notion going around. Let's walk through that.
I did this relatively quickly - please check my math. Also see Disclaimer below.
Looking ahead...
If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
No definitive word yet on the Medicare Part B increase for 2022.
Looking back...
In 2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
So...
IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.

...And yet, I just read that Medicare will eat the increase. Should have remembered.

There's a lot of that notion going around. Let's walk through that.
I did this relatively quickly - please check my math. Also see Disclaimer below.
Looking ahead...
If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
No definitive word yet on the Medicare Part B increase for 2022.
Looking back...
In 2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
So...
IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.

Had given up on many of the funds listed in this string. But I stayed with HMEZX, despite Nexpoint having a questionable partner history (via Highland Capital - J. Dondero). It is a red flag for many.
But HMEZX has been a solid "steady eddy" performer. Returns are bond-like, and it has outperformed other merger-arb funds. If not for that 1 red flag, I would own a lot more.
Another interesting vehicle is HRSTX, which converted a few years back to an options-based fund. Very steady, with great performance during negative market periods since its 2018 conversion.