FYI: What are the lives of the planet's wealthiest people really like?
Several years ago, sociologist Brooke Harrington decided to find out.
Hidden Brain
What's It Like To Be Rich? Ask The People Who Manage Billionaires' Money
She knew she'd have a hard time gaining access to the world of the über wealthy, so she did something unusual: She took courses to become a wealth manager.
In the course of this training, Harrington met other wealth managers, who agreed to be interviewed for her research.
She discovered that, in order to manage money for the super-rich, these professionals learn a lot about the private lives of their clients.
What they shared, Harrington says, shocked her.
Regards,
Ted
https://www.npr.org/2018/02/19/586457604/whats-it-like-to-be-rich-ask-the-people-who-manage-billionaires-money

Should we test the recent lows, in the near term, Old_Skeet will most likely do some buying. If not I am happy with my current positioning. I'm thinking by year end stocks will be higher. And, again if not, I can live with that too. Stocks have earnings and the ability to grow their value through increasing earnings and revenue while bond values, on the other hand, are married more to interest rate adjustments. Through the years stocks have been one of the best hedges against inflation although, at times, a rise in interest rates can cause stocks to stumble. But, stocks seem more likely to recover and appreciate over time in an rising interest rate environment more so than bonds.
In addition, building a CD Ladder also seems to be a good investment strategy in a rising interest rate environment.

Old_Skeet use to own this fund. In reducing the amount and number of funds held in the growth area of my portfolio, a couple of years back, this is a fund that I let go in the reduction process. However, I did keep it's sister fund HWIAX (Capital Income) which is held in the growth & income area of my portfolio. Although, David Green is not listed as one of its managers it follows much the same strategy on the equity side as HWAAX.

Cash may be King for short periods of time; but, held for longer periods of time it will become trash as purchasing power deminishes (over time) due to inflation. Folks, my strategy has been a simple one. I (and my family) have invested in appreciating assets through our years. Thus, we have bettered inflation. Plus, we banged a few bucks out of some short term (spiff) strategies. But, our big gains have come by being invested through the years.
My principal residence is worth more than 30 times what it cost my family in the mid 60's. My investments as measured by a stock and bond fund (bought in the mid 60's.) has grown by more than 80 times by what was first invested. As a measure of inflation creep a gallon of gas that cost 20 cents to 30 cents per gallon back in the 60's now cost around $2.50 per gallon and at times about doubble that.
So, hold cash if you wish believing that it is King. For me, it is not. However, I feel it reasonable to hold a certain amount of cash ... say 8% to 12% of net worth. With this, it seems reasonable for a mutual fund to hold 8% to 12% of it's assets in cash as well. After all, cash is an asset class.
I wish all ... "Good Investing."
Old_Skeet

Lewis From what source are you culling these facts? Thx.
Of 2,258 diversified U.S. equity funds, only 111 have 10% or more in cash—and their recent performance has been poor. Just 18% of those with five-year records have beaten their peers as of Feb. 10. Go back 15 years to include the 2008 crash, and the outperformance number jumps to 48%.

It's a customized search on Morningstar Direct.

You can do a similar search using M* premium, though my impression is that the M* Direct database is a bit larger than the "retail" database.
For "diversified U.S. equity funds", screen on category = U.S. equity (all)
Applying "distinct portfolio only" here shows 2116 funds, a bit less than Lewis' 2,258.
Next, add the screen: portfolio composition (%cash) ≥ 10%
This gives 122 distinct funds (curiously more than Lewis's 111, though off a smaller base).
Next, add the screen: trailing returns (5 year) not equal to "not available"
This eliminates funds without five year records, and leaves 88 funds.
To see many beat their peers' average, add: trailing returns (5 year) > category average
There are 29 such funds (33%).
Alternatively, one can see how many were above their peers' median, add:
trailing returns % (5 year percentile) < 50
There are 22 such funds (25%). The ones that beat their category average but were below the median are: MARNX, HHDFX, LLSCX, SLCAX, STMSX, WEMMX, TORYX.
You can substitute 15 years for 5 years in the above screens and get:
52 funds with 15 year records, of which 26 (50%) were above their peers' median, while 25 (48%) beat their peers' average.
RGFAX beat the midcap blend average, not the median, while ADGAX and AMCPX beat the large cap growth median but not the LCG average.
While playing around with these numbers can be fun, as Lewis described what's important is why the funds hold so much cash.

It's hard to see why one would seek out New Insights over Contra.
Years ago, the former was a much smaller, more nimble fund. It's still less than 1/4 the size of Contra, but at $30B, this is no mighty midget. Except for 2016, it has not performed better than Contra in a decade.
Not a clone of Contra, but with a lot of overlap (the largest 30 holdings in a 50/50 mix are owned by both funds), it has a lot in common.
With all of that, if one is interested in the fund, the institutional (lower cost, no load) shares of FINSX can be purchased (with a TF) at Vanguard, $2500 min ($1K IRA).

@Lewis From what source are you culling these facts? Thx.
Of 2,258 diversified U.S. equity funds, only 111 have 10% or more in cash—and their recent performance has been poor. Just 18% of those with five-year records have beaten their peers as of Feb. 10. Go back 15 years to include the 2008 crash, and the outperformance number jumps to 48%.

FYI: Solid concentration in top-performing stocks, including Facebook (FB,) Amazon (AMZN), Alphabet (GOOGL) and Bank of America (BAC), and a strong fund management team have helped Fidelity Advisor New Insights Fund (FNIAX) beat the S&P 500 and its large-growth Morningstar category in the past one, three and five years.
Regards,
Ted
https://www.investors.com/etfs-and-funds/mutual-funds/stocks-with-three-traits-help-lift-this-top-fidelity-funds-returns/
M* Snapshot FNIAX:
http://www.morningstar.com/funds/xnas/fniax/quote.html
Lipper Snapshot FNIAX:
https://www.marketwatch.com/investing/fund/fniax
FNIAX Is Ranked #70 In The (LCG) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/large-growth/fidelity-advisor-new-insights-fund/fniax

FYI: The stock market has been shaken by turbulence in the last few weeks, something it hasn’t experienced in a few years.
Regards,
Ted
https://www.nytimes.com/2018/02/16/your-money/stock-market-tips.html

@Old_skeet I've owned the advisor shares version of the Franklin fund over 5 years, it is a nice fund. Bought it while at ML. Been toying with reducing that one plus VPU which I hold in another portfolio with interest rates rising as ive been slightly overweight in that sector anyway. Will wait a bit more but if I needed cash for a spiff where I would go.

I have owned this fund for several years. It continues to knock it out of the park. I did not know the manager is 70. I hope he does not retire anytime soon.

FYI: Real estate investment trusts, or REITs, are best viewed as stock/bond hybrids, since their valuations are sensitive to both interest rates and the economy. REIT shares badly trailed the Standard & Poor’s 500 index in the past year as the bond market fell, lifting the yield on the 10-year Treasury to 2.9% from 2.5%. As a result, REITs now could be flashing one of their strongest buy signals in years.
Regards,
Ted
http://www.cetusnews.com/business/REITs-Are-Sending-a-Powerful-Buy-Signal.rysN_NHvG.html

I agree @Bobpa. What I've learned over the years is that constant tinkering with your funds is a definite drag on total return. I like the stability of the robo, at least for a good chunk of my money. I still like to run my own 'chunk' too, just for the fun of it.
Are you aware of the advisory service and automated withdrawal service attached to Intelligent portfolio? It offers more than just portfolio management I'm finding out. Going to a couple seminars to learn more in the next couple months.

Been in and out of thopx for years. Its so stable and vanilla it's easy to overlook in a raging bond bull market. Just re-initiated my position yesterday and will add on any weakness. No worries at all, short duration plus investment grade...perfect together in this environment.

@soupkitchen.good point. But if the bond fund has a duration of 6.5 and rates rise by 2% it will take years to break even. Short duration funds will lose less but for us oldsters who need more income so a CD ladder is looking better nowadays.

MIkeM It sounds like you are saying short-term bonds do not make sense in this present investment environment.

Yes, that is what I'm saying.
Look at the performance of BBMX, 1.7% return over the last 3 years, 1.3% over the last 5. With rising interest rates short term bond funds will be challenged to make even that return going forward. In comparison, CDs are now paying 2% for 1 year and up to 3% for 5 years. And the point here, I think, is if you create a CD ladder where you are converting CDs periodically as they mature into a CD market of risings interest rates it's a win-win investment as compared the short term bonds that will be affected negatively with rising rates.
This maybe wasn't true a year ago, but I think the time has come. Eliminate volatility and a guess on return completely and CD ladder into a rising return. That of course is just my opinion.
By the way, this is what I'm going to do with the money I'm bucketing for retirement withdrawals. I happen to choose Synchroney Bank to set up my money market/CD IRA, but there are many good on-line options available.

Hi @Bobpa,
All three of the funds that I sold (FMTNX, LALDX & THIFX) had nav negative growth over the past 1, 3 & 5 year periods. In short, their yield was greater than their ability to produce same. I'm with @MikeM as I'm thinking CD's are currently a better deal presently over most short term bond funds.
Here is a link to the one, three and five year performance for LALDX. Notice its yield of 3.70% is greater than its return numbers which are listed at 1 year @ 1.54% ... 3 year @ 1.98% ... and, 5 year @ 1.87%.
http://www.morningstar.com/funds/XNAS/LALDX/quote.html
A couple of Lord Abbett income funds that I own and have been able to produce their yield (and more) are LBNDX (Lord Abbett Bond Debenture) and ISFAX (Lord Abbett Multi Asset Income). ISFAX has a yield of 3.58% with 1 year performance listed at 6.17% ... 3 year @ 4.25% ... and, 5 year @ 5.03%. LBNDX has a yield of 4.15% with 1 year performance listed at 5.69% ... 3 year @ 5.36% and 5 year @ 5.75%. Thus they have produced their yield and then some.
When an income fund can not make it's distribution for a good number of years, from my perspective, it's time to let it go and I did. This is the reason I no longer hold LALDX ... FMTNX ... and, THIFX. I'm thinking it will only get worse for these funds as interest rates rise so I let them go.
Old_Skeet

Hello,
I sold three of my bond funds yesterday ... FMTNX ... LALDX ... and, THIFX. And, redeployed most of the capital into BAICX ... CTFAX ... and, PMAIX along with sending some to my cash sleeve for perhaps another spiff.
This leaves my income sleeve holding the following funds: BAICX, CTFAX, GIFAX, LBNDX, NEFZX & TSIAX. Interestingly, a little better than 80% of the sleeve remains invested in bonds from a review of the ticker symbols and their weightings inputed into Instant Xray for analysis. These changes, by my thinking, should help better position the sleeve for a rising interest rate environment. Some noteworthy features of the sleeve are a yield of 3.75%, average duration of 2.6 years and average maturity of 5.35 years along with the prior 12 month total return found to be 4.75%. Currently, PMAIX is held in my global hybrid sleeve found in the growth & income area of the portfolio. This sleeve also holds CAIBX and TIBAX.

He wrote that if the investors bought a fund via ETF shares, they underperformed by around 1.6% over the period examined. But investors who bought the same fund via open end shares slightly outperformed the fund.

@msf, Agree. Underperforming by 1.6% is sizable. Long holding period, i.e. 10 years or so may reduce the difference. By the same token, what is the point of ETFs other than ease of trading?

I've gotten more and more down on bonds over the past decade, as bond yields have gone down more and more. A year ago, I would have suggesting sticking with banks/CUs alone and forgetting about bonds. Yields have come up a bit, IMHO enough to make it worth considering bonds again.
You might take a look at FPNIX. The managers of this fund (first Rodriguez, now Atteberry) use somewhat esoteric devices (e.g. credit enhanced ABSs for credit risk protection, Interest Only (IO) bonds to reduce duration) to reduce, not increase, risk. This fund has not lost money at in any calendar year going back at least to 1992.
Its current SEC yield (as of 12/31/17) is 2.84%, and current yield to worst (i.e. assuming every bond in the portfolio actually yields the worst possible amount) is 2.95%. Its duration is just 1.5 years, and it's investment grade (M* puts it at BBB, almost 90% are A or better).
FPINX fact sheet: http://www.fpafunds.com/docs/fund-fact-sheets/fpa-new-income-factsheet-2017-12.pdf
If you like CDs, and are a veteran or a relative of a veteran, you might look at Navy Fed - it's offering a 15 month CD paying 2.25%. It offers the flexibility of adding money, but only up to $50K.
https://www.navyfederal.org/products-services/checking-savings/certificates.php