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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.
  • 3 out of 4 retirees receiving reduced Social Security benefits
    I wonder if the impact of 0-Care on people is forcing them in taking SS early?
    Another thought is that by taking SS early, one does not have to use their tax deferred retirement savings, in the hope they will experience gains. In my calculations, if I take SS at FRA ,my break even age is 70 figuring the total amount received if I took it at 62.
    Did you include COLA in your calculation? Remember, you will often receive COLA increases most years and they are cumulative. Also, this lower income may qualify you for programs that are income dependent.
    The hardest nut seems to be covering healthcare costs yourself during these early retirement years prior to qualifying for Medicare at age 65.
  • 3 out of 4 retirees receiving reduced Social Security benefits
    http://www.marketwatch.com/story/3-out-of-4-retirees-receiving-reduced-social-security-benefits-2015-05-05
    "Of course, the best way to maximize Social Security is to delay claiming benefits until “full retirement age,” which is climbing gradually to 67, or beyond. A person due to receive a benefit of $1,000 at a full retirement age of 66 would receive only $750 at age 62 (the earliest age at which most people can claim benefits) – and $1,320 at age 70."
    Note that underlined part. People will still need to take it earlier but (I'm guessing) when they do take it earlier and the full amount is 67 or later they will receive even less at 62.
    This adds to my "give up hope of retiring early" thread.
    From what I not see about my finances (having been retired for 9 years, starting at 51) I am feeling less flush. A the major change in that feeling is Obamacare. I was paying $3,000/year before OC. I will be paying $7,200 under OC. If, OC was the law before my retiring I may have had second thoughts.
  • Buffett And Gross Agree: Slump In 30-Year Bonds Makes Good Sense
    FYI: Warren Buffett and Bill Gross signaled the end is at hand for Treasury market bulls as 30-year bond yields rose to a four-month high.
    Longer-maturity Treasuries led losses after Buffett, the billionaire chairman of Berkshire Hathaway Inc., said long-term bonds are overvalued. Touting bearish bets after yields climbed last week by the most in almost two months, Gross said the bull market “supercycle” for both bonds and stocks is ending.
    Regards,
    Ted
    http://www.bloomberg.com/news/articles/2015-05-04/buffett-and-gross-agree-slump-in-30-year-bonds-makes-good-sense
  • TTM Earnings for the S&P 500 Index are now in decline!!!
    From review of Doug Short’s Advisor Perspectives it seems earnings are in decline for the S&P 500 Index.
    http://www.advisorperspectives.com/dshort/updates/PE-Ratios-and-Market-Valuation.php
    With this, I am looking for a pull back as we move into the summer months.
    Old_Skeet
  • Suggestions for "Near-Cash"
    I would think the odds of loss in any of these worthy funds over the next 5y to be nontrivial, no matter what they do, even, you know, BERIX and FPA. So I would stick a hundred thou, or even more, into SC 4% bonds, and make a few thou against inflation. I mean, I like very much PONDX, FSICX, DODIX, FTBFX, BOND, PDI, and a few others, but have had trouble breaking even with all of them over selected short recent periods, when I was overmonitoring.
  • Pimco Total Return Fund Loses World's Biggest Bond Fund Title
    FYI: (The king is dead, long live the king ! Vanguard Total Bond Market Index Fund )
    The Pimco Total Return Fund, launched by Bill Gross, has lost its title as the world's biggest bond mutual fund, following two years of withdrawals.
    On Monday, Pimco said investors yanked another $5.6 billion from the Pimco Total Return Fund last month, bringing its assets to $110.4 billion at end of April.
    By comparison, the Vanguard Total Bond Market Index Fund had $117.3 billion as of April 30, according to a Vanguard spokesman
    Regards,
    Ted
    http://www.reuters.com/article/2015/05/04/us-investing-pimco-flows-idUSKBN0NP1W820150504
  • Eventide Gilead fund
    Hi, Alex.
    In general, we describe our coverage universe as "all those funds that are off Morningstar's radar." In general, we're willing to initiate coverage of a way cool fund if it is: (1) less than three years old or (2) has less than $150 million AUM. That covers roughly half of all of the funds in existence (about 1300 meet the first criterion, 3100 meet the second, some meet both). Once we've started tracking a fund, we'll stick with it even as it becomes older and larger so long as it continues to do stuff that we think you need to know about.
    We will make exception and write about larger funds from time to time. Two categories come to mind: (1) there's been a change so substantial that it has de facto become a new fund. An example would be when FPA Paramount went from a quality-growth domestic smid cap under one team to a mid-cap absolute value global fund under a new team. And (2) if a newly reopened fund has been closed so long that it's dropped off the radar. Matthews Asia Growth & Income is an example of that.
    Could we cover larger funds? Sure. Two things constrain us: (1) I do 99% of the fund profiles personally and it's hard to track more than 3000 funds while also having a full-time job and being dad and (2) the value-added isn't necessarily as great because other folks are likely to write about such funds.
    Hope that helps,
    David
  • 4 Pricier Funds That Are Worth Their Salt
    There are some funds that M* gets enthralled with, data aside. WPVLX is one of them. Like David, I took a flier on this fund in the late 90s and got burned. I looked through the M* analyst report archive to find the following headlines:
    3/2000: WPVLX's bet on financial may be worth the short-term pain it is causing.
    6&7/2001: We think that this is the kind of fund to buy and put away for years.
    11/2001: This could be a buying opportunity.
    2/2002: This fund's strict attention to value has paid off over the long haul.
    4,6,&10/2002: Despite its struggles, WPVLX is worth keeping.
    1&2/2003: Better than it looks right now.
    7/2003: Investors in this offering have long been rewarded for patience.
    12/2003: This fund is worth waiting for.
    3/2005: Is this glass half full, or half empty? -and- Not for everyone.
    9/2005: We still think there's good reason to like this mutual fund.
    5/2006: Despite a very tough year and a half, we thing this mutual fund still has the goods.
    12/2007 & 1/2008: This fund fund is down but definitely not out.
    6/2008: Be patient with this fund.
    11/2008: Recent performance woes don't dim our support for this mutual fund.
    4/2009: Investors should stick with this fine mutual fund.
    9/2013: Take a bow, Wally Weitz et al. -
    the analysis says: "this fund has never been better than duringthe past 4.5 years." After which it wound up in the 63rd percentile for all of 2013 (meaning it had a dreadful latter part of the year) and 82nd percentile for 2014.
    Briefly on costs. The M* article concedes that ARTKX's cost is not above average, but they wish it were lower given the large size of the fund. But the article wasn't about sizes of funds, it was about costs, and ARTKX isn't challenged by a high cost.
  • Suggestions for "Near-Cash"
    FPNIX is IMHO a unique fund, one managed for preservation (using a wide variety of strategies and derivatives defensively), as contrasted with a fairly vanilla (albeit well managed) short term bond fund.
    Different paths to the same end. As you note, performance is very similar after expenses. Which suggests that the modest incremental cost of the more wide ranging fund has been paying for itself, even in a pretty constant low interest environment. When the markets shift sooner or later, I expect its defensive strategies to show their mettle.
    If one just looks at average figures (which, especially in the case of FPNIX I feel do not tell the whole story), one is getting double the SEC yield and duration that's only 3/4 as long (1/2 year shorter) in exchange for diving into some junk. (Though nearly 70% of the fund's bonds are AAA rated - more than BSBIX's AAA, AA, and A combined.)
    I'm a fan of Baird funds, so I'm not knocking BSBIX. Rather, I'm addressing what is different about FPNIX.
    I'm another fan of the Baird Funds, but I'd say the main difference between BSBIX and FPNIX is that the disastrous year of 2008 saw BSBIX lose 1.79% while FPNIX managed a gain of 4.31%. That would probably be something of a worst case scenario for BSBIX in a comparison with FPNIX. Otherwise, BSBIX seems to pretty consistently outperform FPNIX by a small margin.
    I should think if the original poster is willing to wait 3-5 years that pretty much any solid short term bond fund will provide a small gain (maybe 2% or so). I wouldn't argue against either BSBIX or FPNIX, or even ZEOIX or RSIVX (which are quite different but still pretty safe over 3-5 years, I think).
  • Suggestions for "Near-Cash"
    Gosh, Solarcity 5y bonds, if you can go 5y, and perhaps others similar.
    This is assuming BERIX and VWINX are too risky for your taste.
    I own BERIX and VWENX in the moderate portion of my portfolio (10-15 years away).
  • Suggestions for "Near-Cash"
    Gosh, Solarcity 5y bonds, if you can go 5y, and perhaps others similar.
    This is assuming BERIX and VWINX are too risky for your taste.
  • Suggestions for "Near-Cash"
    If one were going to choose FPNIX, Why not consider BSBIX? The institutional shares are almost half the cost of FPNIX .30% vs. .56%? What would be the advantage over BSBIX? The performance seems very similar as well.
  • What Is ‘Underweight’ Or ‘Overweight’?
    Huh? Article is exceptionally sketchy. I guess Simon's purpose was simply to define a term.
    He alludes to "benchmarks." What is not very clear is that one's benchmark for a given asset varies tremendously depending on factors like goals, risk tolerance, age, etc.
    At age 85, I'd consider a 50% allocation to equities to be overweight. At age 25, I'd consider the same allocation underweight. An investment or fund manager may set a benchmark for any asset, not just equities. Some managers benchmark gold, Treasuries, real estate, etc.
    Most mutual fund Prospectuses lay out some type of benchmark for the various assets it may hold - though the exact terminology differs.
  • Suggestions for "Near-Cash"
    My interpretation of not taking "a big risk with principal", and of "near cash", and of "3-5 years" is that one is willing to live with short term fluctuations and minor dips in principal, but expects to come out positive at the end of 3-5 years.
    That puts pretty tight limits on what one can do with the money. Otherwise, I wouldn't consider it part of a "cash" allocation. In other words, I tend to be a bit more cautious with cash. YMMV.
    So I like the NTAUX suggestion (I wasn't familiar with this fund). Unfortunately, while it beats your current 0.50% taxable yield (since it's a muni fund), its 0.50% tax-free yield still doesn't beat FDIC-insured internet banks (yielding around 1% taxable now).
    I also like FPNIX (and have suggested it before myself). I'm comfortable with its junk bond (BB) rating, but only because I've followed this fund for years (never invested). Otherwise, I'd be leery of delving into junk now, especially with my cash allocation.
    Another thought is to use defined maturity bond funds. Here's an AAII paper explaining them, discussing the pros and cons, and listing (most of) the current options. (It omits the older American Century Zero Coupon series, which will be more volatile because with zeros, duration = maturity).
    If you're fairly sure you won't need the cash for 4-5 years, you might use an "immunization strategy". You can buy a fund like FMCFX (maturity 2019, muni bond fund, SEC yield 1.13%; it beats iShare's 2019 IBMH's 1.07% SEC yield w/o bid/ask spread); or Guggenheim's BSCJ (2019, corporate inv. grade, SEC yield 1.83%).
  • 4 Pricier Funds That Are Worth Their Salt
    FYI: Fees are no friend to fund investors.
    Over the long term, fees are among the best predictors performance, according to Morningstar. That means paying up for a stock picker is going to leave you fighting uphill from the get go.
    Greg Carlson, Morningstar’s senior analyst covering equity strategies on the manager research team, finds just four — count ‘em — funds that charge above-average fees but still attain the research firm’s highest rating.
    Regards,
    Ted
    http://blogs.barrons.com/focusonfunds/2015/05/04/4-pricier-funds-that-are-worth-their-salt/tab/print/
  • Bill Gross's Investment Outlook For May: A Sense Of An Ending
    If Mr Gross was of his stature in years past, this article would be generating a lot of buzz on this board. But now he's just another prophet of pessimism, the likes of many we have seen since 1982 (not sure where it gets 1981) Still, an interesting missive by Mr Gross and let's face it, at some point these talking heads will get it right about the End of the end. On a personal note, albeit still 2 years away from the dreaded 70 of Mr. Gross, I can certainly empathize with his phobia of being 70. Even though I am as active and healthy as I was 50 years ago, unlike turning 40, 50, or 60, I simply am unable to put a positive spin on turning the big 70. Yuck!
    Edit: where does he get that " fully invested investors wound up with 20 times as much money as when they began" (since 1981 and the Dow at 900) It's much more than that when you factor in the compounding of reinvested dividends.
  • How Dimensional Fund Advisors Really Earn Better Returns
    I have a 529 account in Utah (with Vanguard index funds) and one in West Virginia (using DFA funds) and it is interesting to compare. Over the past 4 years, the Utah plan has outperformed, but again its not apples to apples. FWIW
  • Should You Buy Target-Date Funds?
    "Target-date funds have selected dates at which time the assets will be liquidated"
    Once again we find a financial writer who doesn't seem to know what he is talking about.
    Target date funds' dates refer to the general date of one's retirement. They tend to come in two varieties: one with a glide path that reaches its terminal allocation at the retirement date (e.g. 70/30 or 80/20), and one where the fund holds a gradually declining amount of equities for 10-15 years into retirement (in anticipation of a 25-35 year need). Either way, these funds are not liquidated.
    There are two types of funds I'm aware of that are liquidated on a specified date (excluding UITs that pretty much by definition terminate). One type is target maturity bond funds, like the American Century Zero Coupon Bond Funds, or Fidelity's newer Defined Maturity Funds, or Guggenheim BulletShare ETFs. Here's a good Vanguard paper on defined-maturity bond funds.
    Another type includes some managed payout funds. Managed payout funds are funds that are designed to work like annuities (if all goes well - they're not guaranteed). Some, like Vanguard's, are designed to pay out in perpetuity. Others, like Fidelity's Income Replacement Funds, are designed to terminate on a specific date. These funds hold a mix of equity and debt, and are liquidated on the specified date.
    That subtype of managed payout fund is the only one I know that match the description of a "target date fund" given in the article here.
  • 3 Reasons Investors Still Buy Actively-Managed Funds
    Mark makes a very good point. Maybe I'm wrong, but my sense is we have very few "stay-put" type investors posting on this board. There's one notable exception (And I'd rather not go there, thank you.)
    Hi hank,
    I am a "stay-put" investor. Leaving out bonds in my retirement accounts and internationals where I like to go active, for the most part, my returns are inevitably superior with passive index funds. I have a few exceptions like a Primecap Managed fund, but my exceptions are far and few between.
    I have never learned how to time the market, which to me is synonymous to being "active", so the best I have learned is that if I want to gamble with some percentage of my portfolio, and I do, the ER will not be over 50 basis points. The least I can try to do is put some odds on my side.
    Best Regards,
    Mona
  • VWINX: The one-fund lazy retirement income portfolio
    Hi bee,
    A nice lower Standard Deviation combination throwing off some nice income, is a combination of VWINX and PONDX
    Since 2008 that combination would have improved a stand alone VWINX portfolio:
    (click on image to view more clearly)
    image