FYI: For the second month in a row investors were net redeemers of mutual fund assets, withdrawing $28.7 billion from the conventional funds (ex-ETFs) business for October. Rising interest rates and fears of slowing global growth weighed on flows into long-term funds. For the first month in eight the fixed income funds macro-group witnessed net outflows, handing back $20.4 billion for the month. And for the sixth consecutive month stock & mixed-asset funds witnessed net outflows (-$42.1 billion for October, their largest monthly net outflows since November 2016), while money market funds (+$33.8 billion, for their third month of inflows in four) witnessed the only net inflows.
Regards,
Ted
https://lipperalpha.financial.thomsonreuters.com/reports/2018/11/slowing-growth-and-interest-rate-fears-weigh-on-fund-and-etf-investors-in-october/?utm_source=Eloqua&utm_medium=email&utm_campaign=00008DM_NewsletterLipperAlphaInsightFundInsightsWeekly_Other&utm_content=Newsletter_FundsWeekly_19Nov2018&elqTrackId=FA1D32DF8BF9A4CA8B6B65DDB0A4DC06&elq=dda1f42a06064de190e2f7259012eb63&elqaid=37609&elqat=1&elqCampaignId=166

FYI: The booming loan market for highly indebted companies has faced a lot of scrutiny in recent months. The IMF has repeatedly aired its grievances. Multiple central banks, as well as the banker of central banks, the Bank for International Settlements, have chimed in with their concerns as well. And last week, Massachusetts Senator Elizabeth Warren called for tighter regulation on what she believes is “a significant risk to the financial system and the American economy.”
Beyond deteriorating protections for lenders, critics have grown wary of just who is buying these loans. In recent years, it has increasingly been retail investors.
Regards,
Ted
https://ftalphaville.ft.com/2018/11/20/1542706123000/Who-s-buying-leveraged-loans-anyways-/

Nice marketing move by Vanguard, but it seems a little hard to rationalize on a cost basis. That is, if it costs virtually the same amount per dollar invested to administer a small index fund account as a large index fund account, doesn't it also cost virtually the same amount to administer a small active fund account as a large active fund account?
We're not talking about the cost of buying and selling shares here - that's covered by early redemption fees and in rare cases purchase fees (not loads). But we're looking at the servicing costs of small accounts. IMHO there isn't any difference between servicing a small index fund account and a small active fund account. Vanguard sends out the same annual prospectuses, handle similar size transactions, send out the same monthly/quarterly statements, etc.
So why cut the fees on small index funds accounts but not on small active fund accounts? Could it be that Vanguard is facing competition on the former but not the latter? That's not exactly pricing according to cost (Vanguard's mantra), but pricing according to market forces.
From the PR that Ted linked to: "Admiral Shares were introduced by Vanguard in November 2000 to pass along the cost savings associated with large and long-tenured accounts". Now those large and long-tenured accounts will no longer get a break.
Here's a "hidden in plain sight" gotcha: "It is anticipated that all of the outstanding Investor Shares will be automatically converted to Admiral Shares beginning in April 2019, with the exception of those held by Vanguard funds"
So the Life Strategy (fixed allocation) and Target Date (glide path allocation) funds will continue to skim 10+ basis points as they continue to own Investor class shares of their underlying index funds (VFINX ER = 0.14%, VFIAX ER = 0.04%).
Fidelity's explicit management fee of 0.10% (0.08% with waiver) per prospectus on FFNOX begins to look more and more respectable. It's not hiding this fee by using high priced underlying funds (the average ER of the underlying funds is 0.03%).
More from Vanguard's PR piece: "The firm was also an early proponent of ETFs as a means to broaden the availability of passive strategies"
Yeah, sure, whatever.

Once logged into Vanguard, this message appeared:
Converting to Admiral Shares
-------------------------
You can now own lower-cost Admiral™ Shares for almost 40 of our index mutual funds for a minimum of just $3,000 each.
If higher minimums were keeping you from converting, select Yes below to find out if you can start saving money today.
-------------------------
When you convert from Investor Shares to Admiral Shares, you're still invested in the same mutual fund but you keep more of your investment returns thanks to lower expense ratios.
For example, would you rather invest $50,000 in:
•Investor Shares, which would cost an average of $90 a year? Or...
•Admiral Shares, which would cost an average of $55 a year?*
A $35 difference may not seem like much, but imagine how that might add up over time. Consider this hypothetical example:
Assume you invest $50,000 and hold onto it for 10 years (no additions, no withdrawals). The investment earns an average annual return of 6%, and the $35 annual expense ratio difference holds true the entire time. After 10 years, your Admiral Shares investment could be worth about $600 more than if it were in Investor Shares. (This doesn’t represent any particular investment; your actual savings could be higher or lower. The rate of return is not guaranteed.)
Admiral Shares minimum investment requirements
Minimums are assessed per fund, per account:
•Most index funds start at $3,000.
•Most actively managed funds start at $50,000.
•Some sector-specific index funds start at $100,000.
Fund-specific minimums can be found in each fund's profile.
After the conversion
You'll pay no taxes or fees on the conversion because you're simply moving money within the same fund.
But if you're invested in an actively managed fund or any other fund that offers both Admiral and Investor Shares, we may reclassify you back to Investor Shares if your investment drops below the Admiral Shares minimum.
Learn how converted shares are priced
Do you want to convert to Admiral Shares now?
*Vanguard Investor Shares average expense ratio: 0.18%. Vanguard Admiral Shares average expense ratio: 0.11%. All averages are asset-weighted. Source: Vanguard, as of December 31, 2017.

https://www.sec.gov/Archives/edgar/data/36405/000093247118007441/ps_adm112018final.htm
(this change appears to affect the index type funds)
497 1 ps_adm112018final.htm ADMIRAL SHARES MINIUM.
Vanguard 500 Index Fund
Vanguard Balanced Index Fund
Vanguard Developed Markets Index Fund
Vanguard Dividend Appreciation Index Fund
Vanguard Emerging Markets Government Bond Index Fund
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard Extended Market Index Fund
Vanguard FTSE All-World ex- US Index Fund
Vanguard Global ex-U. S. Real Estate Index Fund
Vanguard Growth Index Fund
Vanguard Intermediate-Term Bond Index Fund
Vanguard Intermediate-Term Corporate Bond Index Fund
Vanguard Intermediate-Term Treasury Index Fund
Vanguard International Dividend Appreciation Index Fund
Vanguard International High Dividend Yield Index Fund
Vanguard Large-Cap Index Fund
Vanguard Long- Term Corporate Bond Index Fund
Vanguard Long- Term Treasury Index Fund
Vanguard Mid -Cap Growth Index Fund
Vanguard Mid -Cap Index Fund
Vanguard Mid-Cap Value Index Fund
Vanguard Mortgage -Backed Securities Index Fund
Vanguard Pacific Stock Index Fund
Vanguard Real Estate Index Fund
Vanguard Short-Term Bond Index Fund
Vanguard Short-Term Corporate Bond Index Fund
Vanguard Short-Term Inflation -Protected Securities Index Fund
Vanguard Short-Term Treasury Index Fund
Vanguard Small- Cap Growth Index Fund
Vanguard Small- Cap Index Fund
Vanguard Small- Cap Value Index Fund
Vanguard Tax-Exempt Bond Index Fund
Vanguard Total Bond Market Index Fund
Vanguard Total International Bond Index Fund
Vanguard Total International Stock Index Fund
Vanguard Total Stock Market Index Fund
Vanguard Value Index Fund
Supplement to the Prospectuses and Summary Prospectuses for Investor Shares and Admiral"Shares
Effective November 19, 2018, (i) Admiral Shares have an investment minimum of $3,000, and (ii) Investor Shares are generally closed to new investors. Investor Shares will remain open to existing investors and certain new institutional investors. You may convert your Investor Shares to Admiral Shares at any time by contacting Vanguard.
It is anticipated that all of the outstanding Investor Shares will be automatically converted to Admiral Shares beginning in April 2019, with the exception of those held by Vanguard funds and certain other institutional investors. At that time, Investor Shares will be available for ongoing investment only by Vanguard funds and certain other institutional investors.
© 2018 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
PS ADM 112018

FYI: This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic. Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been. Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!
Regards,
Ted
https://www.stocktrader.com/2018/11/11/weekly-market-recap-nov-11-2018/

FYI: This week will be a short week with markets closed on Thursday for Thanksgiving Day, and markets will close at 1 p.m. ET on Friday.
Regards,
Ted
https://finance.yahoo.com/news/thanksgiving-existing-home-sales-need-know-week-ahead-155607713.html

"Roth notes, fee-only advisors are also conflicted. If they’re charging, say, 1% of a client’s portfolio, they may ...advocate complicated strategies simply to justify their own fee."
Does he have evidence that this is happening to a significant degree? What is happening to a large enough extent that it has raised concern at the SEC, is reverse churn, essentially the opposite of what Roth is describing.
https://www.stratifi.com/blog/reverse-churning/
"Less than 100% of a realized capital gain will be taxed, because you’ll have some sort of cost basis on the shares."
No, assuming a cap gain is recognized, 100% of that gain is taxed. The reason why less than 100% of the proceeds from a security sale is not taxed is that some of those proceeds represent cost. But 100% of the part that is gain is taxed.
Right idea, but horribly expressed.
An example of where a cap gain is realized but not recognized is in the sale of a primary residence. The first $250K of gain by an individual is realized but not recognized for tax purposes.

Here's the Investment News link:
https://www.investmentnews.com/article/20181115/FREE/181119943/money-in-donor-advised-funds-can-make-impact-before-distribution
The article's first statement, that "money sitting in the [donor-advised] fund actually works against their values" is misleading. The rest of the article (and the Cornerstone study) go into ways that the money sitting in DAFs could be invested to make a positive impact. That's different from suggesting that the money that's sitting there is having a negative impact, i.e. actively working against their values.
Still, the point is that one could/should consider what good the money's doing while awaiting donation. For example, here's Fidelity Charitable's list of its four investment pools available for "sustainable and impact investing":
https://www.fidelitycharitable.org/investment-options/impact-investing-pool.shtml

BROWN ADVISORY https://www.brownadvisoryfunds.com/media/pdfs/2018 Distribution Calendar_vFINAL.pdf
OAK ASSOCIATES https://www.oakfunds.com/articles/2018-capital-gains-and-dividend-distributions
SMEAD https://smeadcap.com/files/4915/4100/0987/2018_Dividend_Estimates.pdf
VALUE LINE (New) https://vlfunds.com/gains

@AndyJ- The SF Chronicle recently reported that PG&E currently carries 1.4 Billion (!) of such insurance, but that the potential losses from the Paradise fire alone will be well over $15 billion.
A better question might be "who is stupid enough to insure PG&E?". (If I was an insurance company I would charge PG&E $1.50 for every dollar of coverage.)

In my post (above) I mentioned that "Sacramento is preparing to initiate legislation similar to last year's, again allowing PG&E to fund their liabilities by revenue bonds if that becomes necessary."
Here is a link to an article in the San Francisco Chronicle regarding that information.

FYI: Life is getting better, and tougher, for income investors. Bond yields have climbed this year, lifted by the Federal Reserve’s tightening regimen. The 10-year Treasury was recently yielding 3.12%, up from around 2.4% a year ago.
Related Data
Rising rates, however, have pressured bond prices. Many bond categories are underwater in 2018, as the accompanying table illustrates. Stocks, another income vehicle, have returned a lackluster 2.7%.
But there’s no need to sit back and suffer. Plenty of ideas and strategies for achieving respectable returns were bandied about at a conference this week focused on dividend and fixed-income investing.
Regards,
Ted
https://www.barrons.com/articles/yield-seeking-tactics-for-a-tougher-time-in-the-bond-market-1542301955?mod=djem_b_Weekly Feed for Barrons Magazine

@MFO Members: VanEck Announces Preliminary Yearend Distribution Estimates for VanEck Vectors Equity ETFs:
Regards,
Ted
https://www.businesswire.com/news/home/20181116005538/en/VanEck-Announces-Preliminary-Yearend-Distribution-Estimates-VanEck
https://www.businesswire.com/news/home/20181116005538/en/VanEck-Announces-Preliminary-Yearend-Distribution-Estimates-VanEck

:)
Actually, we’re in a similar situation. No NG in our area. Have a 500 gallon propane tank (known as a “pig”) in the yard and a local supplier delivers by truck. Years ago the neighborhood association attempted to move everyone to a “small local (propane) distribution system” as you referenced. Didn’t get off the ground.

@MFO Members Here is the latest on PG&E Bonds from Blooberg.
Regards,
Ted
PG&E bonds rose sharply in Thursday’s trading session and continue to climb higher on Friday, but have not yet returned to levels seen before news of the wildfires emerged. Some of its notes have tightened more than 120 basis points today, which translates to about a 5.7% increase in dollar price.
The company’s most-actively traded bonds, its 6.05% notes due in 2034, have tightened about 85 basis points above Treasuries since Wednesday. The bonds, however, still trade at levels similar to high-yield securities.

Hi Guys,
These graphs do not support the proposition that investor uncertainty has made any major departure from its historical volatility levels. This historical data clearly demonstrates that perceptions have always been much more easily changed then reality dictates. It's a real scatter plot. We typically overreact to any new piece of information, good or bad. Over extended time, especially in the deep past, that is a likely explanation of why we survived given our physical limitations.
What has somewhat surprised me is that the data reflects our uncertainty over the merits of investing. That defies logic. The data clearly shows how profitable the markets have been. Yet only 30 to 45 percent of us are bullishly optimistic over a rather long timeframe. We are slow learners and resist change. I suppose that's our nature!
Best Wishes

FYI: Vanguard Group will start offering health savings accounts to its defined-contribution-plan clients, the retirement-plan record keeper and asset manager announced Thursday, capitalizing on the increased popularity of HSAs.
Regards,
Ted
https://pressroom.vanguard.com/news/Press-Release-Vanguard-Partners-With-HealthEquity-11518.html

@MFO Members: At .70 cents on the dollar I believe the PG&E 10/01/2020
8.205% bonds are a strong buy. In my opinion there is no way the state of California will let PG&E go broke. You just can't create a new utility out of thin air.
Regards,
Ted
Reuters Article:
https://www.reuters.com/article/us-california-wildfires-pg-e/pges-wildfire-risks-mount-shares-and-bonds-plunge-idUSKCN1NJ2EI
Bloomberg Article 1.
https://www.bloomberg.com/news/articles/2018-11-14/any-pg-e-bankruptcy-would-pit-bonds-against-burnt-out-homes
Bloomberg Article 2.
https://www.bloomberg.com/news/articles/2018-11-15/pg-e-debt-crash-leads-slump-in-investment-grade-utility-bonds

After the crash of PG&E stock and bonds there are interesting opportunity:
PACIFIC GAS &ELEC CO NOTE CALL MAKE WHOLE
CUSIP 694308GT8
Maturity Date 10/01/2020
Ask Yield to Maturity 8.205%
What do you think?