FYI: More than most sectors, utility stocks have felt the sting of rising interest rates.
While the Standard & Poor’s 500 is up nearly 5% this year, the utilities in the index are down 4.5%, besting only the real estate group, which has lost 5%.
Still, utilities, which were yielding about 3.6% late last week, remain attractive to income investors. With rates so low, these stocks serve as bond proxies.
At a time of rising rates and strong economic growth, though, investors are more apt to move from the sector into riskier parts of the market. And higher bond yields pose competition.
Regards,
Ted
http://www.cetusnews.com/business/Don’t-Chase-High-Utility-Yields.B1tqTUeBf.html

Hello.
This is Old_Skeet’s weekly barometer report for the weekending January 19, 2018.
Last week I reported that the 500 Index was extermely overbought with a barometer reading of 128. This week the reading is found to be the same at 128 and, with this, the Index remains extremely overbought as scored by the metrics found in the barometer. If the reading should drop much lower it will be off the scale. Generally, a higher barometer reading indicates there is more investment value in the Index over a lower reading.
For the week short interest for SPY is found to be 1.8 days to cover.
In review of the 500 Index compass the lead pack remains XLE (energy), XLF (financials) & XLY (consumer discretionary). Within the lead pack my spiff hound remains XLY and has for sometime as the consumer continues to spend. The bogey hound for this compass is EQL.
In review of the global compass the lead pack consists of GSP (commodities), EEM (emerging markets) & EWJ (Japan). Last week EEM had pulled back a bit but has now regained its momentum and edges out VTI (domestic stocks) for third place. Within the lead pack my spiff hound remains GSP and has for sometime as good demand for commodities continues. The bogey hound for this compass is VT.
This investment strategy was derived from a betting strategy I used years back at the dog track. The betting strategy was that I’d bet three dogs to either win, place or show during the early to mid races. This strategy provided a number of ways to have a dog (or dogs) be in the money. And, for me, this resulted in some good winnings as I had a prety good system that aided me in picking some good opportunity dogs for a wager.
Thanks for stopping by and reading.
I wish all … “Good Investing.”
Old_Skeet

VFINX or pretty much any other S&P 500 index fund, no load, 0.14% ER, 1.69% yield. I just don't see any reason for me to own this fund. There are many other dividend-centric funds out there that give you better bang for your buck with the same degree of risk.

2017 was quite a good year. My 2 core funds, my anchors, are still PRWCX and MAPOX. The first is about double the size of the second. Today, I sliced a sliver off PRDSX and added that sliver to PRIDX. The trade will go through on Monday. PRDSX is 6.14% of portf. and PRIDX is 7.71%. I still have just 11% of portf. in foreign stuff. As for bonds, I'm 15% in PREMX and 9% in PRSNX--- STILL. I have not pulled the trigger on PRSNX yet. (Thought I might switch into TUHYX or RPIHX.)

So let me see. a 5.75% load, a 0.9% ER and a yield of 1.08% No thanks, I think I'll pass.

Very valid points made by all. Maybe "hedge" was the wrong term and misused as BrianW points out.
I almost feel like adding to FMIJX now or waiting for it to pull-back further, could be trying to catch a "falling knife"; i'm just not sure and maybe way off.
NO DOUBT 13 months does not a trend make. But if significant under-performance continues for the next year or two and I have not, at least, consider another alternative, am i not doing myself a disservice? I'm not divesting from FMIJX, just reducing it from low-to-mid double-digits to just over 9%. I don't believe that's unreasonable, maybe i'm wrong though.
As BriansW says FOMO is maybe what is motivating me to branch out. The category is doing very well, but what will happen when the category goes south? Is FMIJX going to be the superhero as in the past? There are concerns as have been previously pointed out, asset bloat, weaker$, etc.
Lastly, I'm not saying 15.5% absolute return is bad; I would take it EVERY YEAR, but we all know that is a pipe dream. I guess my thoughts are if FMIJX continues to SIGNIFICANTLY under-perform the category, is it not worth a look-see and try to enhance performance while the getting is good?
Please let me know if I am off-base and/or missing the point! Thx!!!!

Interesting comment. Thanks, Ted.
Parabolic moves in stocks that end in an up spike are rare. Typically, stocks make rounded, distributed tops and spikey bottoms when fear reigns.
Commodities are usually the opposite, making rounded accumulative bottoms and spikey tops when greed reigns.
The weekly RSI on the S&P is well above 80. Bear markets don't normally start from that level.
But we are certainly due for a garden variety 5% correction. In fact, it would be healthy in my view.

If you aren't a purist (Value Investor), may I suggest a simple FOMO checker. I would setup a hypothetical portfolio on Morningstar. I would use Index funds divided equally between Value and Growth. Your decision point is when either becomes 5% out of band. If you have your eye on this Growth fund, buy it when Value is 5% greater (55% of the portfolio). This isn't perfect, but it will keep your emotions in check.

FMIJX returned 15.5% in 2017. I'll take that every single time, thank you!
Know what you own and why you own it. FMIJX is exactly where one would expect it to be. If you are even looking at 2018 performance--which is to say around 12 trading days so far--you are better off indexing.

Appreciate the comments and insights! Thx!!
It's sometimes hard to accept SIGNIFICANT under performance. The 98th percentile in 2017 and early 2018 does not make a trend, but should it not raise "some" concern going forward???
Does it not warrant monitoring or am i being a little short-sighted and impatient?

Yes, they trailed badly in 2017, but this was after a relative performance of 2nd, 8th and 1st in 2014, 2015 and 2016 respectively. As Ben noted, their analysis of the ECB's actions are cautionary. I have sufficient irons in the fire to accept their caution at present. Attached is their most recent report...pls see starting on page 25.
http://www.fiduciarymgt.com/funds/shrpt/ann_shrpt_093017.pdf

As with VMNFX, FMIJX is currency hedged. This has made a big difference in the past few years, as the dollar has gone from soaring in 2016 to diving in 2017.
If what you want is a smoother ride (i.e. one where currency is taken out of the equation), these were and are fine funds. If you want full exposure including currency volatility, buy something else.
Here's a chart showing these two funds against the foreign large blend average. While the two funds occasionally diverge (as would be expected, with one foreign one global), you can see how they take off relative to foreign large blend in 2016, and then foreign large blend nearly catches up in the subsequent year.
Morningstar comparison chart.

I'm a long-time investor in FMIJX/FMIYX, from the launch. I have profited very well from my investment to this point, BUT, I was a bit dissapointed in 2017's return, 98th percentile and now this year, albeit only 2.5 weeks into 2018, again 98th percentile.
I am beginning to lose a "little" confidence in FMIJX. Obvioulsy, we are only talking about the past 13 months or so but the direction is trending down.
I still like the overall metrics and investment philosophy, but something is just not clicking.
Outside of the dollar hedge not working, does anybody have any thoughts on what might be holding back this historically excellent fund?
Are you losing any confidence in FMIJX? If not, why not? If so, why so?
Thanks for any thoughts, suggestion and opinions!!
Matt
fyi, also posted on M*

Perhaps the 46% YTD return (in the subject line) for 2018 through the end of July, 2018 is a bit of a stretch; but a +21% return for a lot of equity funds seemed a bit of a stretch in January of 2017, for that year, too.
Re-do: I don't find it difficult to imagine an equity pull back in light of the on-going run since the market melt and from the nearer term of Feb., 2016 period.
I picked a few from Fidelity, but there are representative of similar funds from other active managed fund vendors for the period of Feb. 5, 2016 to date total return numbers:
--- FSPTX = +104% (March 6, 2009 to date) +687%
--- FOCPX = +86% (March 6, 2009 to date) +611%
--- FDGRX = +80% (March 6, 2009 to date) +523%
--- FCNTX = +60% (March 6, 2009 to date) +370%
--- FSPHX = +34% (March 6, 2009 to date) +234%

http://stockcharts.com/freecharts/perf.php?FOCPX,FSPTX,FCNTX,FDGRX,FSPHX&p=6&O=011000
Anyway. A temporary exit plan was suggested if for ANY reason the equity markets decided to take a big rest while I would not be able to take any actions with our portfolio as deemed appropriate at the time.
A possible temporary EXIT plan, this is all that was indicated. The day will arrive at some point in the future, yes? I'm sure your plan would be different.
Interesting observations have been presented, and hopefully a few have considered their action plan to preserve capital.
Lastly, the equity sells noted would not be a current taxable event, as the monies in question, are in tax sheltered accounts.
Take care,
Catch

If Fink is serious, this is an important shift:
https://nytimes.com/2018/01/15/business/dealbook/blackrock-laurence-fink-letter.html

FYI: Plenty of things could upend the two-year rally in emerging-market equities. Yet no one seems to agree on just what they are.
Sure, the bulls abound. Fiera Capital Corp., the Montreal money manager that oversees $123 billion, expects attractive returns for several more years. Research Affiliates, a sub-adviser to such firms as Pacific Investment Management Co., calls emerging markets the " trade of a decade."
Yet contrarians are sounding the alarm, with Morgan Stanley the latest, saying that emerging equities may see a repeat of the year 2000, which began well and ended with a 32 percent drop. Here are five potential causes for concern:
Regards,
Ted
https://www.fa-mag.com/news/gundlach--goldman-sound-warning-on-emerging-market-stock-rally-36653.html?print

No apologies here. I'm just trying to stay hip/current/with it/in tune with the terminology/tone blessed by 45. Also, what is more joined to the hips of the economy and taxes than politics?

@Ted - how much weight would you assign to that tech fund in one's portfolio? My sense is that most would not hold enough to move the needle so to speak and may also be less exposure than one would get in an S&P 500 index fund or it's equivalent. We all have to build the portfolio we are comfortable with.

As it should have. He was talking about stocks, and there's a big difference between being a customer of a company and knowing a company. It's the latter sense in which he meant one should know what (company) one is investing in.
Still, when it comes to industries, knowing means something different. Working in an industry can give you a good sense of the health of that industry if you are attentive.
I was wondering whether you had any thoughts about how the CAPE index model will be adjusted for the new sector since this is a thread about DSENX. When real estate was carved out of financials, the CAPE index was modified to use a non-SPDR index fund, IYR.
I imagine that was done because it needed an index fund with a ten year history, and by definition, XLRE was a new fund without a history. Though IYR might have been chosen because it was more inclusive, holding mortgage REITS such as NLY that XLRE excludes.
However, that might mean that the CAPE index added a new group of companies (mortgage REITs) that it had not tracked before. A discontinuity. Regardless, another imprecision arose - the old history of the financial sector included real estate, while the sector itself no longer did. Was any attempt made to correct for this (e.g. recalculating the financial index history after pulling out the real estate component)?
This time things are even more interesting. The CAPE index tracks XLK for technology, but XLK combines technology and telecom. That's why there are ten "sectors" that the CAPE index uses, while there are eleven S&P sectors.
It is possible that State Street will decide to keep XLK as it is, in which case the CAPE index won't have to do a thing (other than watch the technology+communications "sector" continue to grow in weight). But what if State Street does finally create a communications Select Sector SPDR? There won't be any history for the new SPDR (just as there was no history for XLRE). Would the CAPE index turn again to a non-Select Sector SPDR? Also, as happened with XLF, the history for XLK will no longer precisely represent the new XLK after communications companies are carved out.
DSENX in turn will need derivatives that track whatever index or indexes the CAPE index chooses to track. Will they exist?
And they say that a machine can run an index fund.

Those are level load (C) shares. You can get the MGGPX share class mcmarsco originally named, without a load and with a much reduced 12b-1 fee (0.25% instead of 1.0%).

Of course that was never exactly Lynch's advice, more 'understand what you invest in' ---
https://www.investopedia.com/articles/stocks/06/peterlynch.asp ---
and he did often say things like 'know what you own and know why' etc.

Investopedia is describing stock investing (as one can tell from the URL). Investing in sectors/industries is a little different - one does not dig into the balance sheets of scores of companies.
I'll let Mr. Lynch speak for himself regarding how his oft quoted advice applies to stocks and to sectors/industries:

“I’ve never said, ‘If you go to a mall, see a Starbucks and say it’s good coffee, you should call Fidelity brokerage and buy the stock,’” Lynch says, some 25 years after his retirement ... “People buy a stock and they know nothing about it,” he says. “That’s gambling and it’s not good.”

and

“If you’re in the steel industry and it ever turns around, you’ll see it before I do.”

https://www.marketwatch.com/story/peter-lynch-25-years-later-its-not-just-invest-in-what-you-know-2015-12-28 (originally in WSJ.com)