The Great Emereging Markets Rebound EM Blogs From Barrons
BRAZIL: Brazil slipped into recession,
The Market Vectors Russia ETF (RSX) tumbled nearly 2% Friday, ending a disappointing week for bulls who have been pouring money into the fund this month.
INDIA: India’s Pres. Narendra Modi heads to Japan to forge new bonds at the expense of China.
http://blogs.barrons.com/emergingmarketsdaily/2014/08/29/emerging-markets-week-in-review-2/?mod=yahoobarrons&ru=yahooSouth Korea:
Industrial production in July rose by 1.1%, much greater than the 0.3% consensus.
Japan had the opposite of Korea. Its industrial production disappointed, creating dilemma for its policymakers
http://blogs.barrons.com/asiastocks/2014/08/29/asia-evening-roundup-korea-ip-jumps-japan-sinks/For the week ending August 27, of the $1.2 billion that went into emerging markets, $0.8 billion, or about two-thirds, went into China. This is the 12th consecutive week of inflows.
Bloomberg reported the largest China ETF, the iShares Large Cap China ETF (FXI), is on track to break the December 2012 record this month. This ETF has rallied 9.4% in the third quarter, although August is mostly trading sideways. The iShares MSCI China ETF (MCHI) gained 8%. Fund flows tend to lag stock market performance by a few weeks
http://blogs.barrons.com/asiastocks/2014/08/29/investors-love-china-shun-japan/Update 08/31/2014 (this article does correctly name Mr Modi as India's Prime Minister)
Japan Aims to Double India Investment in 5
Years: Report
"India, Asia's third-largest economy after China and Japan, needs faster economic growth to create work for the one million young people who enter the workforce every month.
In early steps, PM Modi has allowed foreign investors to own 100 per cent of railway projects with an eye to drumming up interest in building India's answer to Japan's high-speed 'bullet' trains. He is also courting Japanese investment in an ambitious industrial "corridor" to run between Delhi and Mumbai.
Japan's Honda Motor Co Ltd, Suzuki Co Ltd, Sony Corp and Toyota Motor Corp are household names in India. Yet, India accounts for only 1.2 per cent of Japan's total outward foreign direct investment."
http://profit.ndtv.com/news/economy/article-japan-aims-to-double-india-investment-in-5-years-report-657101
Ouch Funds 2014 @rjb112: i don't necessarily follow mega caps.......the argument is that.......and, technically, large caps usually lead when the rally is mature -- like it is now.
@fundalarm: I haven't personally seen the original research on megacaps, but as you mention, supposedly they lead in the back half of bull markets. They also supposedly lead in bear markets.
Have you seen any decent research on megacaps that I can read?
They apparently have not been in favor since the mid/late 1990's, when there were some
years in the 1995-2000 time frame where you could have just invested in the largest [by market cap] 25-50 stocks and captured the market leadership.
Seems to me that buying the largest, safest companies at a discount is not a bad idea.
XLG, IOO, and as
@expat points out, BRLIX, seems to be a good way to invest in megacaps.
You mention "WE are overweight xyz in such and such accounts".....if this is personal, please don't answer, but are you working for a company that professionally manages investment accounts? Do you feel comfortable saying the name of the company, and what your job is with them?
Emerging Markets, BRICs Breaking Out Of Sideways Range
Is FHAIX a good alternative? What does anyone think about the feasibility of Franklin High Income (FHAIX) as a place to put some money currently in other domestic bond funds? I have money in some funds that I expect to get clobbered in the next few years, and would like a reasonable alternative. I’m retired-but-working.
Thank you all,
Archaic
Ouch Funds 2014 incidentally, just got this from citi (to advocate for larger caps at this stage):
As the impact of US QE wanes, asset markets are set to enter the third of this four phase cycle. From here, credit spreads usually turn up but equities rally on further increases in EPS*. Notably, while in the 1980s and 1990s this phase lasted another 1-3 years, in 2007-08 it only lasted 4 months. History suggests that investors should favour equities over corporate bonds. Within the global equity markets, it is associated with bubbles and outperformance from growth, large-cap and cyclical stocks. This profitable but increasingly unstable period ends when global EPS turns down, which we do not expect in the next two years – Phase 4 is not imminent
*EPS here is earnings per share
separately, apologies to the OP for diverting this thread. there are, in my opinion, way too many threads on MFO to start a new one, so i thought it made sense to continue if in a bit revised direction: what has not worked YTD and what asset classes are worth adding to going forward. regards.
Long-Term, Tech Funds Lag Energy And Real Estate
Shiller Wonders Why the Stock Market is So Expensive A nice sharp comment from the current Malkiel WSJ piece, which is weak, by a James Lear:
\\\ The CAPE analysis by Dr. Schiller is an example of sophisticated mathematics done badly. Two reasons:
1) the "cyclically adjusted" portion of his index is a 10-year moving average on *earnings* (the denominator of CAPE) but not on the price. The SMA is a common tool in electrical engineering signal processing. It removes high frequency noise but it also delays the signal by 1/2 the period of the moving average. In this case, the delay is 5-years. It turns out that it is the delay that makes CAPE seem work as a predictor, not the filtering. In other words, we can use today's price divided by earnings from five years ago, and voila we have something very similar to CAPE. The beauty of using the delayed 5-year earnings as opposed to the SMA is we can roll forward (e.g. look at 4-year earnings) and look ahead at what Schiller's CAPE will be in the future at today's prices.
2) The CAPE correlation coefficients are low.
I should probably just sit still... Hi crash. I don't want to come off as obnoxious or irritating with personal questions, but the comment about 'a work in progress'; this doesn't need to be a work in progress IMHO (opps, used that terrible term). You have well over 50% in one area of the world, Asia. Should Asia be weighted above average in a portfolio? That is debatable. So why would you wait years to get the balance to a more appropriate mix for a 60 year old? I guess I just don't get it. By the way, I'm 60 also and this portfolio would keep me up at night.
If you were to move your portfolio to a brokerage, say Schwab, they will give advice and answer questions for you for free. You don't have to except the advice but they would be able to lay out different risk scenarios for you. If you have a brick-and-mortar brokerage in your area where you can sit face to face with someone that's even better. I just think you could assemble a much better risk-reward portfolio now, not waiting for new contributions to get it there. That would probably take many years. Waiting could be hazardous to your wealth.
Morgan Housel - Finance is a Strange Industry "The irony is that if you are moderately wealthy, advisory fees might be your single largest annual expense -- and you're probably oblivious to them. You diligently include an $8.99 Netflix subscription in your monthly household budget, but have no idea you're paying 50 times that much to your 401(k) adviser. No other industries work like this."
If I recall correctly, many years ago John Bogle was saying that he wanted a requirement that mutual fund companies include on each statement the actual dollar amount of expenses for that specific person's account.
So if a person had a mutual fund account of $100,000 and the expense ratio of the fund was 1.26%, the account statement would say that $1,260 in expenses had been deducted from the account.
I'd like to see regulations requiring that. Not going to happen, but would be a real eye opener for everyone.
Morgan Housel - Finance is a Strange Industry Here is the paragraph containing that link. He believes that Hussman's fund is "the worst mutual fund to own over the last 10 years"
The truth is that finance is filled with people who remain in business despite awful track records. There were 894 mutual funds in 2012 that had been in business in 1998. Of those, only 275 beat their benchmarks. That means more than 600 funds have underperformed what could be achieved in a low-cost index fund, but still remained in business for a decade and a half. The worst mutual fund to own over the last 10 years -- one that has underperformed all of its peers and trailed its benchmark by 150% -- still manages more than $1 billion.
Ouch Funds 2014 everything growthy, small and european has been lagging YTD. i added a percent to growthy MC and 2% to EAFE benchmarked thingies. also, put 1% into CBI. i have been underweight equities for years since i felt my employment had very high correlation to the equity market. i now feel a bit more stable at work and am trying to get equities a bit higher. it's very painful for me, i have to admit. i don't have any defined benefit pension waiting in the wings and capital preservation is one of the goals. so i lack the risk tolerance of our chief linkster. but slowly and surely am on the way to get half of my portfolio in equities.
I should probably just sit still... i would say - identical.
the porfolio balance is now slightly better than 70% in PREMX in the past and probably warrants the new handle, but still not diversified enough. for someone counting days to a reduced SS check, investing like a 20 year old is not appropriate. whatever your real name is, we care about your investment results and that's why we've commented over the
years. did you wake up one day and decided that MEASX is the way to go just because you don't want to deal with setting up a brokerage account or with paperwork transfer from matthews to another custodian? these should not be investment considerations in this century.
still, best of luck to you.
Crash, your situation sounds remarkably similar, if not virtually identical, to another fellow who hasn't posted here in a long while... by the name of Max Bialystock.
