Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

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.
  • ETF's
    If I want to buy a $10K interest the Vanguard 500 portfolio, I could pay exactly $10K for VFIAX. Or I could pay a bit more for VOO shares representing the same $10K interest in the portfolio because of the added cost of the spread. I'd prefer not to pay more than $10K for $10K worth of securities.
    Regardless of how large or small that added cost is, it is a drawback inherent in the ETF design. Though perhaps it is one that you may not personally care about.
    Regarding the size of that spread, Ted's 1 basis point spread is more the exception than the rule. For example, CAPE has a typical spread of 15 basis points. Here's Vanguard's table of spreads on its ETF share class.
    With SPY and VFINX Ted is comparing oranges and tangerines (close but still different). The question was what downsides there were to ETFs, not whether ETF 1 was better or worse than OEF 2.
    The only way I know to do an apples to apples comparison using concrete funds rather than discussing different attributes of ETFs and OEF is to compare ETF and OEF shares of the same underlying portfolio. Say VFIAX vs. VOO. Since these are shares of the same portfolio, and since they have the same ER, the only factors affecting performance should be due to the nature of the shares and not of the particular fund.
    Here's the M* comparison over the past ten years.
    As of April 18, 2017, VFIAX'sVOO's cumulative return was 97.23%, while VOO's was 96.59%. That doesn't include dinging VOO for the cost of the spread.
    If you add SPY to the M* comparison chart, you'll find its performance was even worse, at 95.66%. But that's because of the design of the fund (cash drag due to UIT structure plus higher ER). Those additional variables confound the data.
    A tip for the linkster - to link to a M* page comparing funds, one needs to link to the chart page (there's a "share this chart" link there). The only fund that shows up when one links to a M* performance page is the original fund; the compared funds don't get passed through the link.
  • Should You Sell In May & Go Away?
    An interesting article for the "Sell in May" crowd like myself that use the strategy as part of my investment plan and have for a good number of years. I have bookmarked it for future reference.
    One of the primary reassons that I have been a big fan of the strategy is that one can use it during low interest rate periods (like we have been in) and make good money with part of your cash being placed into the strategy between the end of October throuh the end of April. Then move back to cash during the off period. Most times you will make more than just what interest alone would have paid. At least, it has for me through the years.
    Some that use this strategy like to aveage in and out of their special investment positions as I do. And, yes sometimes I move to bonds and/or cash ... but, this year I decided to expand my hybrid income sleeve and open a few new positions as hybrid income funds usually hold bonds plus good dividend paying stocks along with some other asset classes. I felt my hybrid income sleeve could better weather the anticipated coming FMOC rate increases over my bond funds. So, this year I have started to venture into the hybrid income space along with starting the restoring of my CD ladder. I felt this was a good move since I already have ample cash that can be put to work should a sizeable stock market pullback develop.
    My new target asset allocation (as defined by Xray) is cash 20%, income 30% (up 5%), stocks 45% (down 5%) and other assets 5%. Currently, I am stock heavy and income light by a few percent each ... but, come sometime in May I plan to be closer to my target allocation.
    Please note, I use the "Sell in May" strategy as part of a well diversified investment plan and not as a complete investment strategy in and by itself. This is because, most times it works but sometimes it doesn't work; and, I have learned through my many years in investing there is no sure thing.
    I wish all ... "Good Investing."
    Old_Skeet
  • Art Cashin: "Theresa May's Call For Snap Vote Throws Markets 'For A Loop' "
    Another useless political move. The formal exit from the EU is two years away. The trade negotiation with the rest of the continent is more important.
  • Looking for Unique Global Equity Fund
    Hello @ep1,
    THOAX ... Thornburg Global Opportunities Fund is a focus fund that I have owned for better than five years and seeks investment opportunity worldwide holding somewhere between 30 to 40 stocks. It is split about evenly between domestic and foreign and although it has owned small caps form time-to-time it is now more of a large/mid cap fund when it comes to style orientation. It is currently a five star bronze rate fund by Morningstar and has a top of class performance for 1, 3, 5 & 10 year periods (top 20% and better).
    I have provided a link to both its fact sheet and Morningstar report below.
    https://www.thornburg.com/products-performance/mutual-funds/overview.aspx?id=FGO
    http://www.morningstar.com/funds/XNAS/THOAX/quote.html
    The other two funds that are members of my global growth sleeve where THOAX is found are ANWPX and SMCWX.
  • Gundlach's latest bond market unfolding as predicted
    Hi @Junkster,
    S&P 500:
    Jan 1, 1984 166.40
    Jan 1, 1983 144.30
    Jan 1, 1982 117.30
    Jan 1, 1981 133.00
    Jan 1, 1980 110.90
    I have not dug through old data, but recall the end of August in 1982 as the turn around and the beginning of the upward run in U.S. equity after the beating of the mid-1970's.
    An aside note, not directly related and may not be of any value, but the mid range of the boomers in 1992 was about 36 years old finding decent average earning/wage power at the time for perhaps the next 20 years before the slow turn down in earning power. Boomers, of course, have entered into the retirement phase and others entering at a 10,000/day rate, being 4 million/year. The reported birth numbers from 1946-1964 for the U.S. was about 76 million. A question as to whether there is enough money among this group to help support either equity or bond markets to the positive side. We here have read the reports of low savings rates for many boomers; and so there may not be enough power in this group to support any market area(s). The flip side being that the output/withdrawal period is in play, versus the prior period of input/investing. Whose/what money is going to support this withdrawal in order to support equity/bond returns to the positive side going forward???
    Bond yield range: The current yields below have remained in this spread range for some time now; being about .6%; and traveling together. I do not recall any breakout in the 30 year to extend the yield above and beyond this .6% spread from the 10 year, for at least the past 6 months to 1 year period. For my non financial background and IMHO; I read this as continued low inflation as well as other twitches and wiggles, which may be related to high equity valuations and the big money (pension funds, foreign central banks, etc.) still maintaining "safe ground" and purchases while Euro area bond yields remain very low.
    10 Year 2.25%
    30 Year 2.90%
    Note: most investment grade bonds lost a small piece of price ground today.
    A few late in the day musings.
    Take care,
    Catch
  • Gundlach's latest bond market unfolding as predicted
    I have to admit I am impressed. Just like at the beginning of 2014 when 99.99% were saying bonds (10 yield Treasuries) were on their way to 4% (they were 3% at the time) Gundlach was the sole dissenter and predicting bonds were headed back to 2%. This time around when bonds recently hit 2.55% to 2.60% just about everyone was saying it would be a non stop rise to 3%. But Mr Gundlach again was a dissenter saying they would first trade below 2.25% before resuming their journey to 3%. They are 2.22% as we speak.
    I guess the surprise here would be they never get close to 3% and fall below 2% or stay in the current range of 2.20 to 2.50%. I am not sure what has been the story of 2017 - the resilience of stocks or bonds. I am also wondering if there is some secular shift underway where bonds may trade in a low yield range for years to come. And that is from the baby boomers seeking safer and less volatile investments in retirement as they rotate out of equities. It sure has been a boom for the early boomers since 1982. It's liked they all woke up one day and began worrying about retirement shoveling money into stocks. Maybe now they are waking up again and shoveling money into bonds.
  • Wall Street Strategists Not Enthusiastic From Here
    I am traveling for the weekend and only have my handheld so this will be short.
    Years back in college one of my econ professors had our class doing some basic market anlysis and trend forecasting. With this, I plan to continue my forecasting excerise for enjoyment and investment benefit.
    I am not asking anybody to follow my thinking just posting it for additional discussion and comment.
    Now back to ... Johnny.
  • Q&A With Ric Edelman: The Truth About Your Future
    Weirdest interview ever:
    Of (writer meant "If") you talk to advisors in the field or experts in technology, experts in the field, they're talking about the latest financial planning software, or the hot new rebalancing product. They're not talking about exponential technologies, which is an entirely different conversation.
    So most people are unaware of the field of exponential technologies, and have no knowledge that this ETF exists, or why it’s different from all the others. I think for both of those reasons, it’s not on the radar of many in the industry.
    My question as the reader, "What is Exponential Technology?"
    Edelman can use the term, but nowhere in the article does he (or the interviewer) define it. Nor does he explain how he filters for ET when he buys companies that have it.
    Some how 197 companies appear to have it according to his EFT XT's portfolio. The top ten holdings amount to a mere 6% of the EFT's AUM...not very concentrated.
    He personally (I assume Edelmen Financial) holds 75% of the EFT (down from 100% when he created it the ETF). I will assume it has been pedaled quite heavily to his "sheeple" (who I'm sure have heard of it).
    I've heard enough, I'll pass.
    In XT's short history (2 years) it appears less impressive than "Unexponential Technology" ETF, QQQ:
    image
  • Fake Investment News Could Be Here to Stay: Seeking Alpha.Com ?
    @Mark- For years I've blamed various disastrous investment episodes on you when I've been explaining to my wife. Now you're making me feel like a scumball. OK, OK: in the future I'll blame MJG. :)
  • Fake Investment News Could Be Here to Stay: Seeking Alpha.Com ?
    FYI: (The Linkster never links anything from Seeking Alpha.Com.)
    The Securities and Exchange Commission is trying to rid the nation of phony stock stories. It’s safe to say that the agency has a steep climb ahead of it.
    On Monday, the SEC announced that it is cracking down on stock promotion schemes that played out on Seeking Alpha, Benzinga, Wall Street Cheat Sheet and other investment websites in recent years.
    Regards,
    Ted
    http://www.barrons.com/articles/fake-investment-news-could-be-here-to-stay-1491951655
  • Buy When There's Blood In The Streets
    Umm, UAL doesn't have much blood on it. The stock is up 27% annualized over the last five years and is close to its five year high. It's no bargain anymore. You could make a better case for WFC, although it too is only about 11% below its five-year high. So regardless of anyone "beating their moral chests," these stocks ain't cheap.
  • John Waggoner: Listed Funds Offer Access To Private Equity With Liquidity
    LPEFX has been one of Old_Skeet's holdings for now better than five years with an average annual return, for me, of around 15%. I hold this fund in the specialty sleeve found in the growth area of my portfolio.
  • Outlook Grows Dimmer For Stock-Picking Fund Managers
    Hi Guys,
    The tidal wave of mutual fund money storming away from actively managed funds and towards passively managed products certainly is a cause for concern among the actively management contingent.
    So is the fact that fund fees are being reduced, that investors are becoming better informed, that the managers themselves are better prepared limiting any potential advantages, that the competition is more uniformly challenging, and that the community is numerically shrinking. Wow, that's formidable headwind!
    All these are combining to make active managers perspective's significantly dimmer. But the referenced article is not written in a nasty, non-reversible trend sense. It inspires some hope. It highlights the investment strategies of a few attractive individual investors who use both active and passive components when assembling a portfolio.
    I say attractive because the mixed management investment styles of those profiled are very similar to my own investment rules of engagement. It is a battle. And everyone likes to be a part of a group and not an outlier when doing battle or when making investment decisions. There is comfort in not being alone.
    Although the active management community is struggling through a tough,abandon ship period, it will not totally disappear. It's needed for price discovery purposes, and because there will always be some folks who will never be satisfied with only earning average market returns. These folks covet superior returns as their guiding goal.
    Tom Petruno is an excellent financial writer. I like his work. I have read his measured articles for countless years. He rarely disappoints and always includes data that is easily understood. Good for him; good for us.
    Best Wishes
  • Outlook Grows Dimmer For Stock-Picking Fund Managers
    FYI: Today’s infants may gasp in wonder 20 years from now at tales of how humans once were trusted to drive cars. They may also be shocked that humans once were trusted to pick stocks for investment portfolios.
    The soaring popularity of “index” or “passive” mutual funds in the last few years has dealt another blow to the ranks of traditional “actively managed” funds — the ones with human portfolio managers who are supposed to ferret out the best stocks and beat the market average return.
    Regards,
    Ted
    http://www.latimes.com/business/la-fi-investing-quarterly-active-funds-20170409-story.html
  • IBD: Paul Katzeff: Blue Chip Tech Names Help Fuel This Red-Hot Fund
    SPECX is Old_Skeets largest holding in the growth area of my portfolio and has been for a good number of years. Indeed, it has been a good fund through the years. However, there are other good large cap growth funds as well. Some that I follow are SBLGX, LGRRX and NEFSX (which I have owned in the past as a spiff).
  • IBD: Paul Katzeff: Blue Chip Tech Names Help Fuel This Red-Hot Fund
    FYI: To beat the stock market and mutual fund peers, having the right stocks isn't enough. It's having them at the right time that counts. And Alger Spectra Fund (SPECX) has done that in spades in the past 10 years and is doing so again this year.
    Regards,
    Ted
    http://www.investors.com/etfs-and-funds/mutual-funds/blue-chip-tech-names-help-fuel-this-red-hot-fund/
    M* Snapshot SPECX:
    http://www.morningstar.com/funds/xnas/specx/quote.html
    Lipper Snapshot SPECX:
    http://www.marketwatch.com/investing/fund/specx
    SPECX Ranks #139 In The (LCG) Fund Category By U.S. News & World Report:
    http://money.usnews.com/funds/mutual-funds/large-growth/alger-spectra-fund/specx
  • The Case For High-Yield Municipal Bond Funds
    Matt, PYMDX/PHMIX and MMHAX are the two I normally have money in, going in and out, partially, in steps, based on T rate trajectory and trading ranges. They're both up 4%+ ytd.
    Fyi, MMD is a top-performing muni cef run by the same managers as MMHAX. Bob DiMella, one of the management team (and I think the lead, though he's not id'd as such by M*), has been on WealthTrack in the past, the last time maybe a year or two ago - you could get the flavor from that interview if you want to search for it.
    Found my way to HY munis about two years ago, and until the markets change, I'm done with ~ all investment-grade muni oef's. Cef's (which the article emphasizes) are a different animal; I usually own one or two, but opting for the oef's right now.
    Like the article says, HY muni funds aren't nearly as junky or default-risky as corporate HY; the default rates on the former are much lower, and the muni funds typically have higher average quality than corporates. For example, Pimco and Mainstay are about 60% and 50% investment grade, respectively.
    Best -- AJ
  • Go anywhere fund
    I don't worry about "go anywhere" but I have owned WHGIX for many years and it has served me fairly well; of course, you must keep this fund in perspective. As wm72 stated it does not hit home runs, but it is fairly steady, good safety and tax-efficient for its category.
    If it fits into your overall portfolio objective, then it is a solid choice (IMHO).
    Good luck and profitable investing going forward to both of us wm72 and any others invested!!
    Matt