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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.

Longtime bull (Ed Yardini) says he’s sitting on cash ahead of a possible market correction
@davidrmoran
Yes, I have had access to an advisor for many years with a grandfathered account where I received a good number of A share funds from my late parents. It is in this account that I can, at times, purchase some A share funds at nav or reduced commissions depending on the fund company. Also, I can hold C shares if desired; but, thus far have elected to hold only A share funds. Perhaps, you have failed to remember that I became an investor at the age of 12 in, or about, 1960.
In addition, there are no fees charged to me for this mutual fund holding account other than what the fund companies pay the broker. This also applies to my self directed IRA account for both me and my wife but not to my health savings account which does have a fee associated with it.
From my perspective I've got a good deal that probably could not be had today without some sort of direct or wrap fee arrangement associated with it.
According to Morningstar Instant X-ray my mutual expense computes to 0.78 percent.

Old_Skeet February 2020 in Fund Discussions
Longtime bull (Ed Yardini) says he’s sitting on cash ahead of a possible market correction
stillers: And I never understood your "All bonds all the time/bond OEF momentum" investment strategy when markets have gone up FOR 10 YEARS.
It should be noted that you posted on M* that you sold all of your stocks near/at EOY 2019, you have not reported any stock buys since then, staying 100% in bond OEFs. So despite you reporting that data, you have not participated in any of the 2020 YTD stock market gains.
The above was your usual inaccurate agenda. I owned stocks constantly several years in the last 10 years. In the last 2 years and especially since retirement, I'm invested mostly in bond OEFs and I trade stocks/ETF/CEF several times annually. That fits perfectly with my goals which I exceeded easily
I don't post most of my trades and holdings anymore.
In the past, you said several times that
1) I will never retire but I did
2) I will never have enough but I already have more than 30 times our annual expense without drawing social security.
and now you said, "So despite you reporting that data, you have not participated in any of the 2020 YTD stock market gains." I didn't claim that I used "sell trailing stop" it was just a generic post. There is no way for you to know if I owned stocks and how long.
I can't find where you posted your holdings, their % and trades in the last 1-2 years. Your quote said "markets have gone up FOR 10 YEARS" while you were holding a huge % in CD and bond OEFs for years

@Gary1952 Of course there is a correction coming......................someday. There always is.
No correction is needed unless you can find something wrong I said.
My comment about sell trailing stop was a generic one that I used to do years ago. I do trade riskier funds short-term, usually days to 2 weeks.
I suggest that you guys stay on topic and not rehash Morningstar posts, after all, this is MFO.

FD1000 February 2020 in Fund Discussions
Longtime bull (Ed Yardini) says he’s sitting on cash ahead of a possible market correction
@davfor, one of the reasons that I am 40 percent equity is that my advisor recommends only a 10 percent weighting to high yield and aggressive income ... .

Sorry for ignorant question, but you who for years have listed vast and detailed holdings using many fund selections within a dozen 'sleeves', use an adviser??
I missed that.

davidrmoran February 2020 in Fund Discussions
Why So Many Mutual Funds Can’t Beat the Indexes
In theory half the funds are above the index and half are below.
Before fees, it might be 50-50. After deducting fees, it's not even close and the longer you have that fee drag on an active fund compared to a benchmark the more likely it is it will lag: https://morningstar.com/funds/xnas/vtsmx/performance
That's why over the last fifteen years the Vanguard Total Stock Market Fund has beaten 85% of its competitors. An active manager in the short-term might have one or two blowout years where they best the market by a wide margin, but sooner or later most slip up while that fee drag they have is like clockwork, deducting upwards of one percentage point a year from returns. It is the certainty of the fee drag versus the quasi-randomness of outperformance that makes index funds so hard to beat.

LewisBraham February 2020 in Fund Discussions
Longtime bull (Ed Yardini) says he’s sitting on cash ahead of a possible market correction
@Old_Skeet I turn 70 this month and am about 15 years into retirement having taken advantage of a downsizing "early out" opportunity in 2005. My stock weighting has varied between about 40% and 60% during that time.
My portfolio percentages will probably be in the neighborhood of 55% stocks, 40% bonds and 5% Other after the new cash arrives. Most of that new cash will likely be used to increase existing positions in VWINX, WFLEX, IOFIX, ZEOIX, and SEMPX. (I'm thinking about adding to RPHYX too given its recently improving performance.) My tendency to overweight stocks (vs my current 50/50 default mix) may well persist until 10 year treasury rates move meaningfully higher...maybe into the 3 to 4% range will get my attention (of course something else may come to convince me to abandon my current overweight to stocks!). My present plan is to keep the default mix at 50/50 at least until I turn 80 unless my health status declines significantly.
I have incorporated a sub-portfolio within my ongoing mutual fund portfolio over the past year and a half. Its settled out at 22.5% of the total portfolio (counting the new cash). Its 1/2 income oriented and 1/2 "income with growth" oriented and is populated with individual dividend paying stocks (3%+ dividends), REITS, CEFs, BDCs, and LPs. The individual holding sizes are bit sized enough that it could be used to engage in some "spiffing" although my current plan is to invest for income and long term capital gains.....Anyway, your comments and perspectives are appreciated.

davfor February 2020 in Fund Discussions
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Correction (as long as the above analysis is correct) : DHEAX WAS the better fund.
The daily obsession with some posters (especially one) looking back at prior performance and deeming a given fund as the better/best is mind-numbing.
Had a poster, THREE YEARS AGO, stated that DHEAX will perform better than another similar fund over the next three years, and it did, now that would be something.
But truth be told, the first post about DHEIX/DHEAX that I EVER SAW on on ANY board by posters who now hail it as the better/best over the last three years was made within the last TWO months.
The last TWO months.
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To wit...
This MFO search history for DHEAX shows for that VintageFreak and willmatt72 posted about it in April-June 2019.
ALL other posts about it, including by those who hail it NOW as the better/best, were made between Dec 2019 and today.
https://www.mutualfundobserver.com/discuss/search?Search=dheax
This MFO search history for DHEIX shows for that willmatt72 posted about it in Feb 2018.
ALL other posts about it, including by those who hail it NOW as the better/best, were made between Dec 2019 and today.
https://www.mutualfundobserver.com/discuss/search?Search=dheix
DHEAX has been discussed well back into 2019 at M*. Not sure if you are referring to MFO only.

Gary1952 February 2020 in Fund Discussions
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Correction (as long as the above analysis is correct) : DHEAX WAS the better fund.
The daily obsession with some posters (especially one) looking back at prior performance and deeming a given fund as the better/best is mind-numbing.
Had a poster, THREE YEARS AGO, stated that DHEAX will perform better than another similar fund over the next three years, and it did, now that would be something.
But truth be told, the first post about DHEIX/DHEAX that I EVER SAW on on ANY board by posters who now hail it as the better/best over the last three years was made within the last TWO months.
The last TWO months.
----------------------------------
To wit...
This MFO search history for DHEAX shows for that VintageFreak and willmatt72 posted about it in April-June 2019.
ALL other posts about it, including by those who hail it NOW as the better/best, were made between Dec 2019 and today.
https://www.mutualfundobserver.com/discuss/search?Search=dheax
This MFO search history for DHEIX shows for that willmatt72 posted about it in Feb 2018.
ALL other posts about it, including by those who hail it NOW as the better/best, were made between Dec 2019 and today.
https://www.mutualfundobserver.com/discuss/search?Search=dheix

stillers February 2020 in Fund Discussions
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DHEAX beats DBLSX for 1 month and all the way to 3 years (chart).
DHEAX has also better Sharpe + Sortino (PortVis)
Both funds invest at high % in securitized/MBS, both have mostly IG(investment grade) bond rating.
Just my opinion: DHEAX is a better fund

FD1000 February 2020 in Fund Discussions
Longtime bull (Ed Yardini) says he’s sitting on cash ahead of a possible market correction
I never understood the cash thing when markets are going up?
For your cash portion....why not use a simple liquid index like SPY/QQQ with a close % for sell trailing stop.
In the last 3 months, the SPY made over 9% and QQQ over 15% and their price never lost more than 3.5% from any last top...
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And I never understood your "All bonds all the time/bond OEF momentum" investment strategy when markets have gone up FOR 10 YEARS.
It should be noted that you posted on M* that you sold all of your stocks near/at EOY 2019, you have not reported any stock buys since then, staying 100% in bond OEFs. So despite you reporting that data, you have not participated in any of the 2020 YTD stock market gains.

stillers February 2020 in Fund Discussions
Longtime bull (Ed Yardini) says he’s sitting on cash ahead of a possible market correction
Since I retired about five years years ago I dialed my risk down by holding less equity and more fixed income. I have averaged a little better than a seven percent annual return since I retired. By holding cash I can put a special investment position into play during a stock market pullback. Generally, I have in the past made five to seven percent off of my spiffs sometimes more. So, for me, I await a better buying opportunity before opening an equity spiff position.
I'm also fully invested within the confines of my asset allocation of 20 percent cash, 40 percent income and 40 percent equity. At times I can overweight equities by up to 5 percent if felt warranted.
Thus, for me I have found it beneficial to hold a little extra cash to make some special buys from time to time during stock market pullbacks. Buy the dip then sell the rip and pocket the margin.
@FD1000 ... Sounds like we might be in the same hymn book but on a different page.

Old_Skeet February 2020 in Fund Discussions
Rebalancing Your Portfolio
https://invest.usgoldbureau.com/news/rebalancing-your-portfolio/
Rebalancing Your Portfolio
As mid-February creeps near and the first quarter of the year officially reaches its halfway point, we’re feeling the urge to step back and take stock of how our 2020 goals are shaping up. While Americans love a good New Years’ resolution, it’s no secret that for most people, many of those well-intended aspirations that were so motivating in January tend to fall to the wayside come February.

johnN February 2020 in Fund Discussions
Indexing foreign funds
SWISX, Schwab’s developped markets index fund, is good. You get a lot of Japan and no EM, so there is a bias built in. I prefer to use global funds for large cap international and hit the EM and S/Mid in separate funds. Maybe international will out perform one of these years, but the wait has been long. If you had put money into VEU 10 years ago, you’d have made a bit more than 5% per annum for your pain.

BenWP February 2020 in Fund Discussions
Indexing foreign funds
Dodge and Cox International (DODFX) is a value oriented fund. So the two strategies are different to begin with. I don't know if there are any value-oriented indexes for the international developed market.
I don't care to go with international indexes because they don't account for national and regional issues. I'm thinking about stability, demographic trends, shareholder rights, corporate governance, rule of law, and so on. I'ld rather have someone keeping an eye on that for me.
And I don't care to own ETF's, which I understand to be derivatives designed for trading. Avoiding indexes, and ETF's, is one of the ways left to be a contrary investor.
M* lumps VEA and FMIJX into the international large blend category, while Lipper puts VEA in multi-cap core and FMIJX into multi-cap growth. FMIJX does not limit itself to developed markets. So they don't exactly swim in the same pool. But that's not important to me.
Using mfopremium I can compare the two funds over the nine years that FMIJX has been in existence. Its APR is 8.2 to 4.9 for VEA. Maximum draw-down over that time period was 13.7 for FMIJX to 23.3 for VEA. And all of the usual risk factors favor FMIJX.

WABAC February 2020 in Fund Discussions
Harry Dent’s Dismal Record
Why stop there the following were wrong too 1. Gundlach forecasted 6% for 10 year treasury by next year 2. Bogle was wrong about SPY performances 3. Arnott missed so many forecasts 4. GMO was way wrong. 5. PE + PE 10 + inverted yield are off for months and years 6.for years many experts have said that EM and SC will outperform LC but they didn't

FD1000 February 2020 in Fund Discussions
Warren had a tough year — how might explain it?
https://www.yahoo.com/finance/m/59ccfc55-7b15-31eb-8c79-a21d60181513/warren-buffett-had-a-tough.html
Warren had a tough year
CHAPEL HILL, N.C. — Last year may have been one of Warren Buffett’s worst years ever.
We won’t know for sure until Berkshire Hathaway BRK.A, +0.26% BRK.B, +0.20%, of which Buffett is chairman and CEO, releases its earnings Feb. 22, at which point we will learn how much the company’s net asset value grew last year. The company’s stock gained only 10.9% in 2019, 20.6 percentage points lower than the S&P 500’s SPX, +0.51% total return. Reached by me Feb. 10, Berkshire wouldn’t comment or confirm when the shareholder letter would be released.

johnN February 2020 in Fund Discussions
Seven Rule for a Wealthy Retirement
In terms of pure returns, I think you've got it right. Hank analogized paying off the mortgage with buying a AAA rated 4% bond, and that's a good way to think of it.
However, there are also risk factors that go beyond guessing which investment will have the greater cumulative return at the end of ten years.
Suppose you invest the $150k in equity funds, figuring that over 10 years you'll do better or at least as well as a 4% guaranteed return. Consider the risk of an economic downturn. You could lose your job and the ability to generate the $1500/mo cash flow. At the same time your equity investment could be taking a nosedive, hurting your ability to make the monthly payments out of reserves.
On the other hand, suppose you paid off the mortgage, and then rates dropped a percent. You couldn't take advantage of this and "re-leverage" you home. If you took out a new, lower rate mortgage to invest the money, I don't believe the new mortgage would be deductible (you wouldn't be using it to buy or improve your home). If instead you kept your mortgage, then if rates dropped you could refinance and benefit from a lower (and deductible) monthly payment.
More generally, because mortgages come with put options (you can prepay at any time), mortgages are different from vanilla AAA rated bonds.
IMHO there's more to consider than just which option may get you the better return over the next ten years. FWIW, I've had to make this decision a few times. Sometimes I went one way, sometimes the other.

msf February 2020 in Fund Discussions
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FD, I don't disagree with your statement above. The government bond oef category is a very high investment grade category, but within the category you do find some variance regarding duration and interest rate risk. Most of the intermediate duration bond funds above, had total return in 2019 in the 5.5% to 6+% range, but their 3 year performance is slightly below 3%. Interest rates have been very very low since the 2007/2008 financial crisis, and then we started seeing spikes in interest rates in the 2015/2016 period, and since then there has been a steady pressure to raise interest rates, with 2018 being a tough year. In 2019, we saw the Feds decide to take a "pause" in raising interest rates, and it appears they will continue that policy for most if not all of 2020. It is hard to predict rates, as you noted above, so I am of the general opinion that you need to know the difference between one year performance, and longer history of performance of at least 3 years.

dtconroe February 2020 in Fund Discussions
How to Invest in Emerging Markets
I have been reading for years that
1) Interest rates can only go up
2) That EM stocks are a better value and soon will do better
3) That diversification is better while the SP500 performance + volatility was better
and one it's going to be true :-)

FD1000 February 2020 in Fund Discussions
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High rated bond funds did great since 2019 because rates decrease dramatically and this category has a higher correlation to rates change. If rates will stabilize or will not go down a lot these funds will not make anything close to 5%. Predicting rates is tricky but rates now are at one of the lowest levels ever seen.
Example: I selected FSTGX because it was the first on the list. If you look at longer-term performance for 3-5-10-15 years FSTGX annual performance is between 1.85% to 3.1%. I don't expect this fund to generate more per average annually than the above range in the next several years.

FD1000 February 2020 in Fund Discussions
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This post is about Government Bond OEFs. Historically, this has been a very popular choice for safe haven, ballast, and alternative to cash roles. These are dominated by AAA and AA investment grade bonds, so they are excellent for avoiding credit risk. The real variable is that longer durations are doing very well, as the Feds appear willing to keep interest rate risk stable--as a result longer duration government bonds are having record total return years, compared to their longer term histories. Here are a few funds that are very good options, some of which you might not have heard of:
1. FSTGX: Standtard Deviation 2.28, Duration 3.79, Credit Rating AAA, M* Risk Average,
1/3 yr Total Return 5.78/2.58
2. CRATX: Standard Deviation 2.18, Duration ? , Credit Rating AA, M* Risk Average,
1/3yr Total Return 6.21/2.94
3. SNGVX: Standard Deviation 1.33, Duration 2.4, Credit Rating AAA, M* Risk Average,
1/3yr Total Return 3.88/2.37
4. LEXNX: Standard Deviation 1.96, Duration 3.21, Credit Rating AAA, M* Risk Low,
1/3yr Total Return 5.22/2.65
5. FGMNX: Standard Deviation 2.93, Duration 2.93, Credit Rating AAA, M* Risk Average,
1/3yr Total Return, 5.55/2.75
6. EALDX: Standard Deviation .47, Duration .33, Credit Rating AAA, M* Risk Average,
1/3yr Total Return 1.45/1.74
Comments: FSTGX, CRATX, LEXNX, and FGMNX had 1 year total returns in the 5% to 6% range which is a pretty good return for a safe haven option. Their longer term Total Return performance is traditionally in the 2+% range, but there is no fear of interest rate increases 2019 and apparently not for 2020. EALDX is the ultra short duration fund, that has lower total return, because interest rate risk is not a concern right now. LEXNX is the only M* Low Risk fund but it still has excellent total return performance.

dtconroe February 2020 in Fund Discussions