FYI: hird Avenue's Martin Whitman performed the astonishing feat of beating the stock market by a wide margin over at least twenty years.
Regards,
Ted
https://www.barrons.com/articles/how-whitman-won-1524154702
http://www.cetusnews.com/business/cetusnews?part=SJs_ErU2G

I hold RHS in both iras, but have been shaving a bit on strong days, but still have a fair amount. Every time I think to just dump it, it rallies a bit but I know its a defensive part of my overall portfolio and has its day when least suspecting it. Ive had it for about 4 years, and 2017 and now is the first time it has not done as expected.

Haven't had a chance to read through all the responses, but if you are looking into global allocation funds, my suggestion is to have a look at First Eagle SGENX . It fits well with my risk profile with consistent performance and low downside. It is available no load with many brokers including Schwab and Fidelity. You do have to assess yourself the quality of their team as managers can leave. That's why I usually look at funds with >15 years (preferably >20) of experience, low portfolio turnover, for a core position.

Hi @Junkster
Even the default gov't. money market used for a brokerage account at Fidelity have a current yield of 1.3%. Won't beat inflation, but better than going backwards plus inflation. For those unaware, technically; when one has a Fidelity account, the account is a brokerage account from which one travels their monies to wherever. Many years ago the brokerage feature for an individual account had to be requested as an "add-on".
A benefit for us is that all invested monies are tax sheltered accounts and that we have so many choices of etf's and funds with Fidelity. So, to the buy/sell side of moving here or there does not have any current tax implications for us.
To me/us the D.C. turmoil added another layer for investments past the fundamental/technical aspects of investing and the intuition.
Add: LQD is down -.28% as of this write at 10 am, EST.
----- down -.47% at noon
----- down -.38%, close April 19
Take care,
Catch

Our house has not been without some form of bonds for 20 years.....well, I really don't recall.
The existing bond exposure has been FCBFX of recent. The graphic link below indicates the recent (1 year) of this holding. Corporate bonds have held fairly well for the near term past, but are having a difficult travel recently. Investment grade corporate bonds had a big face slap today, after having a slight recovery for a few days. February 14 found the relative strength move below 30 and recover some. But, one can see the path of the 50 and 100 day relative to the 200 day moving average. I suspect I'll find about a -2.4% YTD including today.
If we sell FCBFX tomorrow to cash, we'll be at 55% cash, 45% equity; and of this equity percentage being technology, healthcare and global sm/mid cap. The cash? Don't know where it will travel at this time.
http://schrts.co/8Kc4dr
Oh, well.....still interesting times.
Take care,
Catch

Hi @Catch22,
Thank you for the link ... short read on interest rates.
It appears that the tighenting of the yield cure presently is having an effect on most bank stock valuations as spreads narrow. If things go as anticipated (by the Fed) the long end of the yield cure should, in time, move upward with the short end as the FOMC raises interest rates at a measured pace. If not then things will generally not go well for us and perhaps a recession will be forthcoming. Currently, this has thrown cold water on my option three (bank stocks). However, I see option one (convertibles) continue upward as well as my option two (commodities). The Fed is having to print money to fund the government since it is short on tax receipts. This drives down the value of the dollar making the commodity play attractive, by my thinking. And, for convertibles, this is a soft play on the rising stock market. Generally, convertibles have a bond like floor and an equity like ceiling.
It will be interesting, for me, to see how my three interest rate options plays pan out as we move through the year. Currrently, the one I am most concerned about is bank stocks. If things materialize as the article states and as the Fed anticipates then bank stocks should come around as the long end of the yield curve rise and the yield spread increases.
If there is one thing I have learned in investing, through the years, everything does not work as planned. With this, I remain flexabile to make adjustments as I feel warranted. Since, the April 11th market close Old_Skeet's market barometer has moved from a reading of 158 indicating the S&P 500 Index was undervalued to the 17th close with a reading of 152 indicating the Index is now at fair value. We still have a ways to go on the barometer's scale to get to overvalued ... but, the way the market has moved upward the past few days it might not take long to get there.
Thanks again for making post.
Old_Skeet

I think you're talking about Amit Wadhwaney, who "retired" in 2014 and then started Moerus Capital Management in 2015. They have one fund, Moerus Worldwide Value, that hasn't done particularly well and hasn't gathered more than $55 MM in assets in its first few years but it does get a M* rating of Bronze.

@LewisBraham Point.
However, if markets start tanking I doubt Fed will inflation get out of whack.
In any case I thought GMO has been saying this for at least a couple of years now. Some day/year they will be right I suppose.

When he was still in charge, 3rd Ave. hummed. i owned TAVIX for a number of years.

FYI: eremy Grantham isn’t shaking his reputation as a perma-Bear.
His firm, Boston-based GMO, is out with its latest seven-year outlook and it doesn’t make for happy reading. GMO expects the annualized, inflation-adjusted return for U.S. stocks to be negative 4.2 percent over the period. U.S. bonds are forecast to lose 0.5 percent a year while emerging-market stocks, long a GMO favorite, are expected to climb 1.9 percent annually.
Regards,
Ted
https://www.fa-mag.com/news/jeremy-grantham-forecasts-rough-seven-years-for-equities--bonds-38168.html?print

Here’s the latest stats from the Bureau of Labor statistics. But I don’t know anyone that shops much who believes the govt. figures. Officially: CPI (excluding food and energy) +2.4% year-over-year. Keep in mind that price increases compound over a period of years. So, 2.4% a year for 3 years isn’t 7.2% - but something higher. https://www.bls.gov/news.release/pdf/cpi.pdf
Some would say to stick with a good low cost equity fund. That’s your best inflation hedge. However, if you’re really worried and don’t mind the potential underperformance,T. Rowe Price bills it’s long established PRNEX as an inflation hedge - but they caution that’s it’s highly cyclical and likely to underperform during economic downturns / recessions.
About 9% of my Core portfolio is considered “inflation hedge”. That portion consists of 4 funds which seem to work well together to even-out the swings. Generally, at least one of the 4 will have an “up day” when the others decline. Other than Prices’s PRAFX (the most diversified), I won’t bother to name them. The other 3 consist of a gold fund, an infrastructure fund and a real estate fund. A similar amount is held in a global bond fund - the thinking being that if the dollar weakens, as it is apt to do during inflationary periods, foreign bonds should outperform domestic. (But if the foreign/global bond fund is “hedged” against currency risk, its outperformance would be less.)
-
BTW - The cost of a phone booth seems to have skyrocketed recently! :) https://www.washingtonpost.com/news/energy-environment/wp/2018/03/14/scott-pruitts-25000-soundproof-phone-booth-it-actually-cost-more-like-43000/

Interest rates going up? I'm not convinced, yet. Well, the short end of gov't. stuff has gone up; but they're pushed by the Fed. The basis spread between the 10 and 30 year continues to contract, as well as other similar measurements used by the financial world (chart 2 below).
The questions: If the economy is doing so well, why are rates not naturally higher? Is borrowing demand full up at the corporate level? Shouldn't rates be at least 1% higher, but that there remains so much demand for U.S. gov't. issues that the rates remain low? Is the Fed. attempting to gain some breathing room to lower rates in the future, if there are problems in the financial system? Higher rates would likely cause some problems with lending for mortgages and auto loans, etc., yes? I'm trying to imagine how many folks have no idea of what loan rates where 10 years ago. How long will it take to wean many off of the "low rate tit"?
Well, you get my drift.
I have more questions than answers and they are only based upon my non-economic degree.
Our house,at this time, does not intend to purposefully engage in investments that may benefit from interest rate increases.
K. I'm out of thinking juice for this morning.
Take care,
Catch
Chart 1, May, 2006-May, 2010.......July 9, 2007 = yields packed together, the below list is + or - a few basis points at the worse; still packed tight
---30 yr yield = 5.10%
---10 yr yield = 5.03%
--- 5 yr yield = 4.93%
--- 1 yr yield = 5.03%
http://stockcharts.com/freecharts/perf.php?$UST30Y,$UST10Y,$UST5Y,$UST1Y&l=1843&r=2830&O=011000
Chart 2, Yield overview Jan., 1999-April 16, 2018
http://stockcharts.com/freecharts/perf.php?$UST30Y,$UST10Y,$UST5Y,$UST1Y&p=6&O=011000
Yields as of April 16, 2018
---30 yr yield = 3.03%
---10 yr yield = 2.83%
--- 5 yr yield = 2.69%
--- 1 yr yield = 2.12%

I know a few people who are paying 1% - some are getting a good amount of help with their financial situations (i.e. are getting reasonable value for their money), some are getting investment help and some long term planning (IMHO not in itself worth the 1%, but these people also seem to derive value from the personal handholding).
If, as it sounds here, all you're looking for is investment selection and management, I agree with Lewis that something like Vanguard Personal Advisors (a hybrid robo/human offering) or a pure robo advisor would fit the bill.
Regarding PONAX and other bond funds: PONAX is NTF (no fee, no load) at many brokerages now. If you're investing at least $25K, it's worth paying a transaction fee to buy the cheaper PINIX shares, especially if you're looking to buy-and-hold. Vanguard has a $25K min, most other places require at least $100K.
Most people here seem to be enthusiastic about the fund. I'll be the wet blanket. The manager is excellent and I doubt over any long period of time the fund would be a poor choice. But it's focused on asset backed securities(ABS) - a few years ago on mortgages (a form of ABS), more recently on non-mortgage ABS. These have their own risks and rewards; the fact that they have done well does not mean they will continue to do so. See these columns:
http://www.morningstar.com/articles/834221/is-pimco-income-the-new-total-return.html (how PONAX did well with mortgages, but that market's risk/reward has worsened), and
https://www.housingwire.com/articles/39045-morningstar-heres-the-impact-of-rising-interest-rates-on-mortgage-backed-securities (unique risks in mortgage backed securities that may manifest with rising interest rates)
Non-mortgage ABS are yet again different from vanilla bonds. (See investment characteristics in this page.) So again, the behavior may not be what one expects.
Thus I agree again (at least partially) with Lewis that you might benefit from adding a more vanilla bond fund, something like a short to intermediate term corporate. (IMHO index funds are too heavily weighted toward lower yielding, though higher quality, Treasuries.)

This is very helpful and much appreciated. Bonds are new to me, and really want something I don't want to worry too much about. PONAX seems diverse, and has a positive track record for a good 10 years, and as the other poster mentioned, has not gotten as bad a hit as of late compared to other bond funds.
I think adding something more vanilla, like VBMFX, or one of Vanguard's corp/int'l funds could be a good idea as you suggested, but it might be wise to let rates settle first.
I also feel that you guys are right about the FA. Aside from my bond uncertainty, I'm generally happy with my AA so far, and don't think it's really necessary to give this guy a quarterly cut for making slight adjustments here and there.
Thanks again!

I know a few people who are paying 1% - some are getting a good amount of help with their financial situations (i.e. are getting reasonable value for their money), some are getting investment help and some long term planning (IMHO not in itself worth the 1%, but these people also seem to derive value from the personal handholding).
If, as it sounds here, all you're looking for is investment selection and management, I agree with Lewis that something like Vanguard Personal Advisors (a hybrid robo/human offering) or a pure robo advisor would fit the bill.
Regarding PONAX and other bond funds: PONAX is NTF (no fee, no load) at many brokerages now. If you're investing at least $25K, it's worth paying a transaction fee to buy the cheaper PINIX shares, especially if you're looking to buy-and-hold. Vanguard has a $25K min, most other places require at least $100K.
Most people here seem to be enthusiastic about the fund. I'll be the wet blanket. The manager is excellent and I doubt over any long period of time the fund would be a poor choice. But it's focused on asset backed securities(ABS) - a few years ago on mortgages (a form of ABS), more recently on non-mortgage ABS. These have their own risks and rewards; the fact that they have done well does not mean they will continue to do so. See these columns:
http://www.morningstar.com/articles/834221/is-pimco-income-the-new-total-return.html (how PONAX did well with mortgages, but that market's risk/reward has worsened), and
https://www.housingwire.com/articles/39045-morningstar-heres-the-impact-of-rising-interest-rates-on-mortgage-backed-securities (unique risks in mortgage backed securities that may manifest with rising interest rates)
Non-mortgage ABS are yet again different from vanilla bonds. (See investment characteristics in this page.) So again, the behavior may not be what one expects.
Thus I agree again (at least partially) with Lewis that you might benefit from adding a more vanilla bond fund, something like a short to intermediate term corporate. (IMHO index funds are too heavily weighted toward lower yielding, though higher quality, Treasuries.)

You're right, @Old_Skeet. One of the trusts I am lucky enough to be beneficiary to is 100 years old (will be terminating, FINALLY, in 2 years). A couple of the stocks invested in then (or in the last 50 years) are still around. Thousands percentages gains in those (and a couple of them lost majority of the gains due to being held under any or all circumstances by USB). But it's NOT a step-up, so the cap gains rate will be enormous. Still, I certainly can't complain about the regular income and the remaining amount.
So, investing JUST A LITTLE as early as possible can really add up over a few decades.
Cathy
P.S. You're also right about so-called "professionals" who have little, if almost no, knowledge of mutual funds, or even basic investment knowledge. I've found that out way too often with TDA reps when I've called or emailed.

Navy Federal: 7 year CD offers 2.65%. That's the longest maturity I see offered there. But boy, oh boy, that seems incredibly meager, when you're committing your money for 7 years!
https://www.navyfederal.org/products-services/checking-savings/certificates-rates.php
Money Market accounts are tiered.
($2,500 minimum.)
https://www.navyfederal.org/products-services/checking-savings/money-market.php
...Just thought I'd mention it, for comparison.

From Prospectus: RPGAX
“The fund’s investments in alternative investments may include unregistered hedge funds or other private or registered investment companies. ... ”
“... A hedge fund is considered an illiquid asset by the fund, is not subject to the same regulatory requirements as mutual funds and other investment companies, and could underperform comparable hedge funds with similar alternative strategies. Hedge funds are not required to provide periodic pricing or valuation information to investors, and often engage in leveraging, short-selling, commodities investing and other speculative investment practices that are not fully disclosed and may increase the risk of investment loss. Their underlying holdings are not as transparent to investors or typically as diversified as those of traditional mutual funds, and an investor’s (i.e., the fund’s) redemption rights are typically limited. All of these factors make the fund’s investments in alternative investments and hedge funds more difficult to value and monitor when compared to more traditional investments, and may increase the fund’s liquidity risks.”. http://quote.morningstar.com/fund-filing/Prospectus/2018/3/1/t.aspx?t=RPGAX&ft=485BPOS&d=e356b3ef2f165906373d32ffc4cf44ef
From Yahoo: T. Rowe Price Global Allocation (RPGAX)
Top 10 Holdings (34.03% of Total Assets)
Blackstone Hedge Fund Solutions 9.62%
Reserve Invt Fds 6.47%
T. Rowe Price Instl Emerging Mkts Bond TREBX 3.88%
T. Rowe Price Emerg Mkts Lcl Ccy Bd PRELX 3.10%
TRP DYNAMIC GLOBAL BOND FD-I 2.78%
T. Rowe Price Instl Intl Bond RPIIX 2.57%
T. Rowe Price Instl Floating Rate RPIFX 2.02%
T. Rowe Price Instl High Yield TRHYX 1.63%
Microsoft Corp MSFT 1.09%
Amazon.com Inc AMZN 0.87%
https://finance.yahoo.com/quote/RPGAX/holdings/
Morningstar also lists the fund as having 9.62% invested in Blackstone Hedge Fund Solutions. http://portfolios.morningstar.com/fund/holdings?t=RPGAX®ion=usa&culture=fr-CA
“Blackstone Hedge Fund Solutions” appears to be a client tailored hedge fund of hedge funds operated by Blackstone. From Blackstone’s Website:
“Our Hedge Fund Solutions group, Blackstone Alternative Asset Management (BAAM®), is the world’s largest discretionary investor in hedge funds. With approximately $75 billion in assets under management as of December 31, 2017, BAAM aims to provide its clients with investment solutions via various different means, including customized and commingled portfolios, special situations, seeding, GP ownership, and registered products. Our investors include many of the world’s leading institutional investors, including corporate, public and union pension funds, sovereign wealth funds and central banks. ... BAAM’s overall investment philosophy is to protect and grow investors’ assets through both commingled and custom-tailored investment strategies designed to deliver compelling risk-adjusted returns and mitigate risk. Approximately half of the assets we manage are invested in customized vehicles created to meet client-specific objectives.”
A “Sorry - Page Not Found” message may appear when you click following link. There is another link on the page (Hedge fund Solutions) that should take you to the material. https://www.blackstone.com/the-firm/asset-management/hedge-fund-solutions-(baam)
I couldn’t find the Blackstone hedge fund listed in RPGAX’s last Annual Report (October, 2017). https://individual.troweprice.com/gcFiles/pdf/argaf.pdf I suspect that perhaps the SEC requires the report to separate out the individual securities (stocks and bonds) from the hedge fund and list each as if it were held individually by the fund. The report does, however, list a near 10% weighting in “alternative investments” - which likely reflects the Blackstone holding. (Short positions are hard to sort-out anyway - usually reflected in cash, bonds or liabilities - a bit over my head).
My Take Aways:
- With over 150 funds now under the T. Rowe Price umbrella, it’s become increasingly difficult to make fine distinctions among them. If you like the house you’ll probably do well over the longer term (10+ years ) with just about any of their equity or allocation funds.
- RPGAX is a “twist” on the conventional 60/40 “Balanced” Fund. By keeping equities pegged at 60% and dropping its bond allocation to 30%, the fund has a 10% “window” open to invest in alternatives. Since it costs a lot more to invest in alternative strategies (ie hedge funds) than bonds, doing so is a bet that over the next market cycle bonds aren’t going to perform as well as they have in the past. That thinking (whether you agree with it or not) ties in with a conundrum Ed Studzinski highlighted in a MFO commentary at least two years ago. Roughly paraphrased (and grossly oversimplified): Bonds as part of a “balanced” strategy no longer offer the degree of downside protection they once did.
- One ingredient of hedge funds usually lacking in conventional mutual funds is the ability to sell short. TMSRX, for example, can short both equities and bonds. (In going both long and short they are, in effect, “hedging” their bets.) It’s proven a difficult tactic for mutual funds over the years. One demon is the higher cost of so doing. Further, the strategy’s very dependent on the manager’s ability to make correct calls - much more so than with long-only funds. A third problem is that these strategies typically fail to keep pace with “the market” - since they’re structured to “zig” when the broader markets “zag”. As a consequence, they tend to suffer large outflows from investors at precisely the wrong times.

@CathyG, Not offended at all as most of us often see things in different colors. I'm probally one of the older investors on the board. I started investing back in the 60"s while in my teens. And, through the years I have built a sizeable portfolio. Back when I started investing one did not have the choices they have today and there were not a lot of no load fund shops around that were easy to invest in; and, for the ones that were you had to invest directly with the fund company. I was young and it was easy for me to stop by a neighborhood investment shop and deposit a few dollars into my account from time-to-time. My first two funds were Franklin Income and Income Fund of America. Both of these funds provided me exposure to the capital markets (cash, bonds & stocks). Plus, I could see the income that they gerenated as their size built. Pop's said income will never go out of style. He was right.
My great grandfather was an investor, my grand parents were inestors, my parents were investors, I'm an investor and so is my son. With this most of the commissions paid were many, many years ago and over time many of these mutual fund investments migtrated from one generation to another through transfers.
While some bark about sales loads they are missing an important message. Start early in investing putting a few dollars back while you'r young and continue to do this letting the power of compounding work. I'm totally surprised as to what my portfolio has become.
I have no regrets that I started investing though commission based funds; and, even today, for me, they are still my low cost option over broker accounts that charge wrap fees, etc. And, I understand why they want me to convert as they will make more. I ask them (from time-to-time) when the subject comes up ... What was so wrong with the Old_ School Way? Today, brokers are young folks and their assignment is to gather money putting it into fee based programs. They can't build and construct a portfolio as the old_school brokers could. They simply do a risk assement and then place you into one of their firms investment programs that fit your risk assement.
Old_Skeet is staying old_school.
Wishing you the very best with your investing endeavors.
Old_Skeet

Hello! I just signed up and need some input. I'm 43 and started investing about 12 years ago, but left a taxable account dormant until last year when I was left two IRAs from my folk's passing and added to the taxable account as well. One of the accounts is managed at JP Morgan where the adviser suggested PONAX/PIMIX respectively. On his suggestion, I set up all 3 accounts with PONAX as my core fixed income holding. My questions are:
1. Ever since I set them up, they've been losing a little each day (Ugh!, although the monthly dividends are good). I understand about the rising interest rates, but should I be concerned? This money won't be touched for a good 20 years and of course I want performance, but mostly peace of mind for the long haul.
2. Should I consider diversifying my fixed income with something other than PIMCO, such as a total bond fund like Vanguard, or anything else? I like simplicity, but concerned about all my egg's in one basket.
As an amateur, I'm here for education, so will mostly be in lurker mode. Many thanks! Starchild.

@davidrmoran
Thanks for the follow-up, David. The only fund I invested over $100,000 in has been VTMFX. That was several years ago and performed as I expected since then by cutting my entire portfolio losses significantly during bad times, but still giving enough better returns than CDs during the good times. But now, I'm reducing even that fund significantly as I don't want to keep that high overall percentage of bond funds.