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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.
  • Hussman’s Returns, Like His Forecasts, Are Dismal
    There is still about $550 million in his Total Return fund. That's down from $2.7 billion in 2011. But it is hard to believe any shareholder would still be in the fund. Similar for the so-called Growth fund, which has actually a 10-year NEGATIVE return, but still has more than $900 million in it (down from $6.2 billion in 2010). Folks have crabbed (rightly so) about MFLDX this year, but at least that fund's long-term record is respectable. Hussman's funds are simply terrible in almost every way imaginable. Can you imagine the marketing tool..."We will only charge you 1% to give you an average return of -2% over 10 years."
  • Morningstar's Portfolio Manager Price Updating Concern ...
    It seems M*'s problems go back some years so your wait might be a long one. While they do have a very comprehensive data page, the fact that they cannot update a simple NAV is very frustrating as you know.
    The day before I was watching AAPL and had their current day chart up. The live quote displayed on top was way different than the price on the chart. We are talking 30-35 cents or so. I ended up using another service. I am not a paid subscriber to M*.
  • Biotech/healthcare
    @linter
    Looking at Standard Deviations/Sharpe Ratios over the past 1-, 3- and 5-year periods, PRHSX (14.28/2.21, 13.78/2.39, 15.31/1.78) clearly beats POAGX (15.15/1.15, 14.51/1.71, 17.42/1.31). So I think that either a 10%/5% mix of PRHSX/POAGX, or even a 15%/Foothold mix makes sense to me. In the long run, I am confident that Americans are more willing to shell out money for HC/Biotech (PRHSX) than a mix of HC and tech (POAGX).
    Kevin
  • Paul Merriman: Why Vanguard Total Stock Market Isn’t The Best Fund In the Fleet
    Hi Guys,
    Indeed "Best" is a relative and elusive term. It depends.
    It depends on the comparison standard; in this instance a simplistic 60/40 equity/bond mix with only 2 holdings. More importantly, it depends on the selected timeframe.
    I did a quick analysis using Portfolio Visualizer for three other starting times: 1985, 1990, and 2000, each ending in December 31, 2013.
    The referenced. "Best" portfolio did deliver superior returns for the 1985 and 2000 starting periods. However, the simple 2 holding portfolio generated a better outcome for the 1990 starting time. Study timeframe always matters.
    Also, the simple portfolio produced its outcomes with slightly less volatility (standard deviation) for all periods examined. The "Best" portfolio achieved its enhanced rewards with more risk at the margin. Nothing new here.
    Best Wishes.
  • You Aren’t Investing In Africa—And You’re Missing Out: MFO's David Snowball Comments
    I own a small position
    Morgan Stanley Inst Frontier Em Mkts A MFMPX Load waived widely available.
    As of 9/30/2014
    Africa/Middle East 58.19% Bench Mk 10.01 Catgy Ave 8.94
    http://portfolios.morningstar.com/fund/summary?t=MFMPX&region=usa&culture=en-US
    Book review in today's W S J Copyrighted Material
    Bookshelf
    Third World Problems
    Africa has never been a poor place. For ages it has been the source of fabulous wealth for others, yet seldom for its own peoples.
    http://online.wsj.com/articles/book-review-the-fortunes-of-africa-by-martin-meredith-1417562898
    Old_Joe said...
    Not in my lifetime, I expect, but how long can all of the good stuff go the few on the top without serious repercussion, especially since a large number of the folks on the bottom will be well armed....
    Oh those rock bands,some of them were a little ahead of their time..
    Rawwww

  • You Aren’t Investing In Africa—And You’re Missing Out: MFO's David Snowball Comments
    TRAMX has not had a good very recent streak. I was fortunate in a backhanded way, so I did not get in right away, in '07, when it first opened. The new(er) Fund Manager seems to know what to do.
    Past 5 years: +10.7% (Reuters.)
  • Hussman’s Returns, Like His Forecasts, Are Dismal
    Good stuff. Thanks Ted.
    I think one reason my Roth has outdistanced my Traditional IRA over the past 5-6 years is that I leave it alone and seldom, if ever, "tinker" with it. I don't know if that strategy works under all market conditions, but it has worked since early '09.
    One lesson from Hussman may be that the harder we work to get something "right", the more apt we are to get it wrong. I guess you could say this guy has "written the book" on screwing-up. So sad for all those investors who sent him their money over the years,
    There was the article not that long ago that said that Fidelity found that some of the customers who performed best were the accounts that had not been touched for so long they were deemed forgotten.
    http://www.businessinsider.com/forgetful-investors-performed-best-2014-9
  • You Aren’t Investing In Africa—And You’re Missing Out: MFO's David Snowball Comments
    Yikes! No thanks! Some years back, T Rowe Price started an African fund. Sounded interesting, lots of interesting sales literature, Price has conservative reputation, what could go wrong? So I invested. Lost more than 50% in the blink of an eye, until I was unable to sleep at night and couldn't digest my breakfast. Sold it and took the 50%+ loss. Too risky for me. [Please don't tell me the fund has gone up 10,000% since I sold, I can't stand the pain.]
  • Hussman’s Returns, Like His Forecasts, Are Dismal
    Good stuff. Thanks Ted.
    I think one reason my Roth has outdistanced my Traditional IRA over the past 5-6 years is that I leave it alone and seldom, if ever, "tinker" with it. I don't know if that strategy works under all market conditions, but it has worked since early '09.
    One lesson from Hussman may be that the harder we work to get something "right", the more apt we are to get it wrong. I guess you could say this guy has "written the book" on screwing-up. So sad for all those investors who sent him their money over the years,
  • The Closing Bell: U.S. Stocks Rise; Dow Closes At Record
    In reference to Ted's blurb on auto sales.
    Alan Mulally may have demonstrated impeccable timing here. Get out before the all aluminum (read: expensive to build, buy, repair & insure) pickup debuts as gas slides below $2.50. One report has it under $2 in some areas of the U.S.
    BTW: Chev recently reported brisk sales of the non-alum Silverado.
  • Creating a More Tax-Efficient Portfolio
    Nice post msf. It looks like neither the Vanguard 500 Index fund VFIAX nor the Vanguard Total Stock Market Index Fund VTSAX have had any capital gains distributions in the past 10 years
    Source: https://advisors.vanguard.com/VGApp/iip/site/advisor/investments/price?fundId=0540#state=30
    And the tax cost ratio and tax adjusted returns for VTI (Vanguard Total Stock Market Index ETF) and VTSAX (Admiral shares, Total Stock Market Index Fund) were just about identical over 1, 3, 5 and 10 years, per Morningstar.
  • Creating a More Tax-Efficient Portfolio
    Sometimes ETFs are not more tax efficient.
    Vanguard Admiral class shares and ETF class shares are identical in tax efficiency. Vanguard Investor class shares, which are a poorer choice, are inherently more tax efficient.
    For example, for the Vanguard 500 fund, its admiral share class (VFIAX) and ETF share class (VOO) have 1 year tax cost ratios of 0.83%, and 3 year tax cost ratios of 0.57%. (VOO doesn't go out five years.)
    VFINX, the investor share class, has corresponding tax cost ratios of 0.78% and 0.53%.
    The reasons are twofold:
    1) These are different share classes of the same (not merely identical) portfolio, so they share equally in the realized gains.
    2) Interest and dividends of the underlying stocks are used to pay the ERs. So the higher the ER of a share class, the less that is distributed in the way of income dividends. That means that the higher the ER, the higher the tax efficiency (lower dividends).
    It's the same idea as hoping a fund will have small distributions because it made little money. Not something to be hoped for.
    Admiral shares and ETF shares currently have the same ERs, so they'll have the same tax efficiency. All else being equal, the ETF will lose a little bit on a round trip, because of the bid/ask spread that is absent from the other share classes.
  • QVAL: "Insider" View
    QVAL is the subject of a big article in the December issue. As I've been an investor with Alpha Architect, the manager of QVAL, I wanted to take a moment to endorse the ETF. I've had a SMA with Alpha for close to two years. Due to regulations, I assume Alpha was not allowed to use the SMA figures in any QVAL documents but there is no prohibition against my doing so. The account I had that used the same approach that QVAL is using outperformed the S&P 500 after management fees by several percent during the period I was invested. I have transitioned my SMA to QVAL because of the superior tax efficiency of the ETF structure. If you really want to do a deep dive into the inner workings of the strategy, read Wes Gray's Quantitative Value book. AA are good people and I'm writing this as an MFO subscriber that wants to see QVAL succeed so that I'm not caught up in a fund liquidation if it were forced to close due to not enough AUM. I don't think that will be a problem because I believe in the long run it will outperform its benchmark and there are very few funds that actually do that. OTOH I wouldn't want it to get so successful that huge AUM interferes with their ability to execute the strategy! However, the inevitable stretches of underperformance will probably prevent that from happening. So I encourage you to look into QVAL unless you're looking to invest a billion dollars. If so, please don't ruin it for the rest of us!
  • The Closing Bell: U.S. Stocks Rise; Dow Closes At Record
    FYI: U.S. stocks closed higher on Tuesday as investors welcomed stronger-than-expected construction spending figures for October as well as robust car sales data. November car and light truck sales were second-highest in eight years, according to figures from Autodata.
    Regards,
    Ted
    http://www.marketwatch.com/story/us-stocks-rise-dow-closes-at-record-2014-12-02/print
    Bloomberg Slant: http://www.bloomberg.com/news/print/2014-12-02/u-s-stock-index-futures-are-little-changed-after-s-p-500-slips.html
    Markets At A Glance: http://markets.wsj.com/us
  • Your Roth IRA in retirement
    I just turned 65. My Roth is invested rather aggressively but as I built it the intent was to have it generate enough income to cover my day to day living expenses. It does this easily and then some at this juncture. All of the current income is reinvested in additional shares which of course.......you see where this is going. At some point I may have to flip the switches and start withdrawing that income but for now both my needs and wants are small and life is good.
  • Your Roth IRA in retirement
    I think this depends on a great many factors, including age, tax situation, etc.
    (my age 69.5)
    We got into Roths late - doing a conversion of a portion of our Traditional near the '09 market bottom and after we had already begun taking SS benefits. Initially it was 100% invested in aggressive global growth funds because they were among the most beaten-up when we converted. Now, we're more interested in protecting our sizeable tax free gains (counter to the traditional approach to Roths).
    Roth now comprises nearly half our investments. it's still a bit more aggressively positioned than the Traditional IRA portion - but not that much so. Mostly balanced funds along with a portion in diversified income funds. I will say the Roth contains what I consider the finest funds we own - so overall quality of the Roth investments is better - and it continues to out-perform the Traditional IRA. Kinda begs the question: Why don't we move everything to those select funds? Go figure.
    Future uses? (1) Would be handy should we encounter some unexpected major expense - as wouldn't incur the tax cost pulling from the Traditional would. (2) Since Roths aren't subject to RMD, we'll be able to protect that tax-sheltered portion longer than otherwise.
    PS: Goal is to run completely out of money the day before we die. :)
  • How Retirees Can Manage Market Risk
    @MJG, no, no flipping of intent, or a dropped not, and I thank you much for your thoughtful analyses and data provision.
    It all depends on how much diversification the word wants to mean.
    I was going chiefly by my memory of
    http://www.investopedia.com/articles/financial-theory/09/international-investing-diversification.asp and
    http://usatoday30.usatoday.com/money/perfi/columnist/waggon/story/2011-12-01/euro-crisis-your-portfolio/51554946/1 and
    http://usatoday30.usatoday.com/money/perfi/funds/2009-01-06-diversification-stock-fund-losses_N.htm (note the Doll quotes).
    Perhaps in the future things will return to the rather less correlated statuses. But in retirement I have cut back on general international funds and bothering to research them while contrarily adding (small) some Matthews Asia and a couple of Japan funds.
  • Fidelity Fifty Fund to reorganize
    http://www.sec.gov/Archives/edgar/data/35348/000003534814000086/Main.htm
    Supplement to the
    Fidelity Fifty®
    August 29, 2014
    Prospectus
    Proposed Reorganization. The Board of Trustees of each of Fidelity Hastings Street Trust and Fidelity Capital Trust has unanimously approved an Agreement and Plan of Reorganization ("Agreement") between Fidelity Fifty® and Fidelity® Focused Stock Fund pursuant to which Fidelity Fifty® would be reorganized on a tax-free basis with and into Fidelity® Focused Stock Fund.
    The Agreement provides for the transfer of all of the assets of Fidelity Fifty in exchange for shares of Fidelity Focused Stock Fund equal in value to the net assets of Fidelity Fifty and the assumption by Fidelity Focused Stock Fund of all of the liabilities of Fidelity Fifty. After the exchange, Fidelity Fifty will distribute the Fidelity Focused Stock Fund shares to its shareholders pro rata, in liquidation of Fidelity Fifty. As a result, shareholders of Fidelity Fifty will become shareholders of Fidelity Focused Stock Fund (these transactions are collectively referred to as the "Reorganization").
    A Special Meeting (the "Meeting") of the Shareholders of Fidelity Fifty is expected to be held during the second quarter of 2015 and approval of the Agreement will be voted on at that time. A combined proxy statement and prospectus containing more information with respect to the Reorganization will be provided to shareholders of record of Fidelity Fifty in advance of the meeting.
    If the Agreement is approved at the Meeting and certain conditions required by the Agreement are satisfied, the Reorganization is expected to take place on or about June 5, 2015. If shareholder approval of the Agreement is delayed due to failure to meet a quorum or otherwise, the Reorganization will become effective, if approved, as soon as practicable thereafter.
    The foregoing is not a solicitation of any proxy. For a free copy of the Proxy Statement describing the Reorganization (and containing important information about fees, expenses and risk considerations) and a Prospectus for Fidelity Focused Stock Fund, please call 1-800-544-8544. The prospectus/proxy statement will also be available for free on the Securities and Exchange Commission's web site (www.sec.gov).
  • Your Roth IRA in retirement
    Not quite 70 so not quite your desired sample, but our Roths are the most aggressively invested, and indeed sometime over the winter I think I will swing more and more into DSENX.
    Kids get low-debt house plus anything left over, but the goal is to spend it, not heir-leaving. Maybe college help for grandchildren.
    Of course my travel abilities in 10-15y (if I am still alive) will be (even) more diminished than now.