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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.
  • S&P Tops $20 Trillion
    FYI:T The main U.S. stock indexes hit record intraday highs on Monday, with the S&P 500 topping $20 trillion in combined market-capitalization for the first time ever, as the "Trump trade" jump-started on renewed optimism about the economy.
    Regards,
    Ted
    http://www.reuters.com/article/us-usa-stocks-idUSKBN15S1D3
  • Time-Stamp of Speculative Euphoria
    What's the word which is the opposite of "uplifting"? That would describe this article.
    It sure would have been nice to have seen the normal and customary 10% corrections more frequently over the past few years. The spring is wound very tightly.
  • Time-Stamp of Speculative Euphoria
    John Hussman Weekly Market Comment, 2/13/2017
    "If there's any point in U.S. stock market history, next to the market peaks of 1929 and 2000, that has deserved a time-stamp of speculative euphoria that will be bewildering in hindsight, now is that moment."
    https://www.hussmanfunds.com/wmc/wmc170213.htm
  • Barron's Cover Story: Best Fund Families Of 2016
    Couple excerpts (Page S4, Barron's print edition, February 13, 2017):
    --- "This year's top-ranked fund family, Natixis Global Asset Management, rebounded from second-to-last in 2015."
    --- "Unlike most investment stories in Barron's, the emphasis of this ranking is on one-year returns."
    The article attributes Oakmark's OAKIX, Natixis' largest fund, having beaten 97% of its Lipper peers in 2016 with much of Natixis' success for the year. And Natixis' second largest fund, Oakmark's OAKMX, beat 99% of its peers.
    (Harris Assiciates, based in Chicago, operates the Oakmark Funds. Harris is part of the much larger French based Natixis financial group.) Couple months ago I suggested in a thread that I considered Oakmark one of the most "underappreciated" fund families. That said, these rankings don't amount to a rat's rear end as another board member opines.
    The article suggests that the year's results reflect, in part, increasing success of active managers compared with passive investments after their having lagged for many years. The article also provides 5 and 10 year rankings, with Pimco scoring at the top for both longer periods. T. Rowe Price is near the top in the 5 and 10 year rankings, but falls to #30 in 2016. A skeptic might interpret that to mean the equity markets are currently seriously overvalued.
  • When A 401(k) Might Not Make Sense: Sorry, Ignore No Link
    High fee is a consideable drag on annual return. The worst of all it compounds itself just like annual return. Unless the company offers a significant matching, 10% for example (in reality this is rare), it is difficult to cancel the disadvantages of high fee.
    One option is open up a Roth IRA account and use inexpensive mutual funds.
  • When A 401(k) Might Not Make Sense: Sorry, Ignore No Link
    Try this:
    https://assetbuilder.com/knowledge-center/articles/when-a-401(k1;-might-not-make-sense
    "The authors assumed a 35-year time horizon for a young employee. ..."
    That's quite an assumption - that someone is going to leave high money in a high cost 401(k) plan for 35 years. It assumes that the person is going to stay with the same employer for 35 years (otherwise the money could be moved to a new 401(k) or an IRA upon separation of service). It assumes the plan does not allow in-service distributions at age 59.5 (otherwise that longterm employee would still be able to move money out before retirement). And it assumes no matching.
    The better advice IMHO is to recognize that most jobs don't last decades, put money into the plan, and move it out as soon as you can. There is significant value in getting money tax-sheltered, and a few years of higher costs are usually not enough to completely eliminate that value.
  • Go anywhere fund
    Yeah - I was thinking of that one too. I own it and have been adding. Not sure it qualifies as go-anywhere however. But they do have a lot of discretion in their mandate when you read the prospectus. 10% is in a fund of hedge funds. Can invest in various kinds of derivatives. Not sure about about short-selling, but I think they can. Can own various types of bonds, including converts and junk both domestic and international.
    For a conservative investor more interested in protecting against a big loss than in growth it's probably a good choice. The big knock against this fund is fees. Carries a 1.2% ER. You can own a great balanced fund like DODBX for less than half that much - but it's a bit more volatile and not as apt to hold international securities.
    @Ted - PRPFX? I understand the reasoning, but in a sense it's a go-nowhere fund, as the perameters of what it can hold are fairly static and can't be changed at manager's discretion, even as conditions appear to change. (I own this one too).
  • Go anywhere fund
    Hi @Art,
    One fund that comes to my mind and that I have owned in the past is Hotchkis & Wiley Value Opportunities A (HWAAX). This fund is mostly an all cap fund and from an Instant Xray review it consists of 63% large caps, 20% mid caps and 17% small caps.
    I chose to let this fund go when I trimmed my large mid/cap sleeve from six funds to three funds in the growth area of my portfolio. While I owned it, it made good money for me. I now own a sister fund HWIAX (in my domestic hybrid sleeve) and it follows much of the same equity holdings as HWAAX on its equity side but HWIAX has more of a high yield income influence on the fixed side plus it offers a monthly distribution. Currently, HWIAX Xrays at 57% large cap, 24% mid cap and 19% small cap. Both are indeed good funds from my perspective with good returns plus both hold some foreign assets although they are not classified as global "go anywhere" funds they seem to do just that ... "go most anywhere they want."
    I have linked their Morningstar reports below.
    http://www.morningstar.com/funds/XNAS/HWAAX/quote.html
    http://www.morningstar.com/funds/XNAS/HWIAX/quote.html
    If not these ... Hopefully, you'll come across something that will catch your fancy.
    Skeet
  • Go anywhere fund
    @Art: Here are some more very flexible funds that have go anywhere theme.
    Regards,
    Ted
    IVWAX
    MDLOX
    FPACX
    PRPFX
    PAAIX
    Investopedia Article
    http://www.investopedia.com/articles/investing/090915/goanywhere-funds-sometimes-go-nowhere.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
    Vanguard Study "Go-Anywhere Funds:
    https://personal.vanguard.com/pdf/ICRBOR.pdf
  • MFO Ratings Updated Through January 2017
    Gotham now has 16 funds. Half just a few months old. Oldest just over four years. Average ER 2%. But 15 of 16 have beaten their peers since inception by an average of 5%. Through January, the funds have $2.9B in AUM ... most in their oldest three funds: Gotham Enhanced Return Fund (GENIX), Gotham Absolute Return Fund (GARIX), and Gotham Neutral Fund (GONIX). Gotham is top rated on the MFO Fund Family Scorecard.
    Other top-rated families this month include American Beacon, American Funds, Artisan, Boston Parnters, Buffalo, Cambiar, DFA, Dodge & Cox, First Eagle, FMI, Grandeur Peak, Guinness Atkinson, Hotchkis & Wiley, JOHCM, Leuthold Weeden, Longleaf, Mairs and Powers, Metropolitan West, Oakmark, Oberweis, Osterweis, Parnassus, PRIMECAP, Rainier, RiverNorth, Scout, TIAA-CREF, Tweedy Browne, Vanguard and Wasatch.
  • When A 401(k) Might Not Make Sense: Sorry, Ignore No Link
    FYI: 401(k) could hurt you too. The tax-advantage is like a free meal. But it might cause some trouble if the fees are too high. That’s according to researchers Ian Ayres and Quinn Curtis. In 2014 they published Beyond Diversification: The Pervasive Problem of Excessive Fees and “Dominated Funds” in 401(k).
    Regards,
    Ted
    https://assetbuilder.com/knowledge-center/articles/when-a-401(k)-might-not-make-sense
  • the February 2017 issue is live
    Hi, Sandra.
    The panic of 1837 was one of the major financial events of the 19th century, at least as far as the emerging U.S. economy was concerned; about a hundred actors were moving simultaneously and independently, and we have terrible documentation concerning most of them. (It's the sort of story that I love playing out when I'm teaching the research course on Historiography.)
    The 2nd Bank of the U.S., indeed, had a 20 year charter. It served, literally, as the bank of the United State. The federal government deposited its cash into, and paid its bills out of, the bank. As a result, the bank had substantial (huge, for the day) cash reserves that it could lend out to other banks. By controlling that lending, the Bank of the U.S. served to discipline the rest; "get crazy and we cut you off." Jackson was pissed, in part, because the Bank of the U.S. discriminated, in his judgment, against frontier financial institutions. When he became president he took two sets of actions against the bank. He refused to renew its charter (effectively breaking its monopoly power) and he withdrew the federal reserves from the Bank of the U.S. and deposited them in other banks that he thought would be more pro-growth. (Or, his critics charged, would lend to speculators.) In particular, that moved hard currency away from the more established banks in New York City, our emerging financial center, and into the hands of folks in ... say, Louisville or St. Louis.
    The net effect was to remove one brake on the system and add fuel to it.
    Then other stuff happened. Reduced liquidity in the central banks. Minor British banking crisis which led them to demand specie for US banks. Land and financial speculation. Jackson's demand that bills owed to the federal government be paid in gold or silver (technically, "specie") as a way to check land speculation.
    One of the dullest, but most careful, bits of economic historical scholarship is Peter Rousseau's essay for the National Bureau of Economic Research, entitled "Jacksonian Monetary Policy, Specie Flows, and the Panic Of 1837" (2011). After 40 numbingly careful pages of financial flow analyses, he concludes:
    The Panic of 1837 was the culmination of a series of policy shifts and unanticipated disturbances that shook the young U.S. economy at the core of its financial structure -- the banks of New York City. Over the nine months leading up to the crisis, the specie reserves of these banks came under increasing strain as they reacted to legislation designed to achieve a “political” distribution of the surplus balances among the states and an executive order allegedly aimed at ending speculation in the public lands. With much of the nation’s specie diverted from its commercial center, the prospect of shifts in specie demand both domestically and from abroad combined with a break in land prices to render the panic inevitable.
    So, not the refusal to recharter the Bank per se but the effects of defunding it?
    And I certainly agree that the test for Mr. Trump, as for Mr. Carter before him, is the sticking power of his initiatives. That, in part, might be driven by whether he can drive the election of a lot of like-minded persons in the Congressional elections of 2018.
    For what that's worth,
    David
    I think we have to consider that there were 4 recessions during the bank's charter that it did not prevent. And while there were Jackson's contributing factors there were other domestic and international factors e.g. Bank of England raising interest rates. My point being is that the Bank of US/Jackson/Panic of 1837 and Trump economics/Trump/Future economics analogy is a poor one.
    The presidential mid term congressional elections are often touted by the pundits as a referendum on the president. It is doubtful if they are. If they are then the incumbent party is not liked by the voters as "The party of the incumbent president tends to lose ground during midterm elections: over the past 21 midterm elections, the President's party has lost an average 30 seats in the House, and an average 4 seats in the Senate; moreover, in only two of those has the President's party gained seats in both houses."
    https://en.wikipedia.org/wiki/United_States_midterm_election
    Considering that the Republicans currently have a majority in both chambers; it is a good bet they will lose seats, as is normal for the midterms. However, if they were to gain seats or hold onto the majority I think that could be considered a win for Trump as it would be going against the historical record.
  • American Funds - first timer
    Let me try to harmonize the info that people have provided.
    "Class F-1, F-2, F-3 & 529 F-1, are designed for invstors who choose to compensate their financial professional based upon the total assets in their portfolio."
    Class F (later relabeled F-1) does have a fee structure designed for wrap accounts. It is different from Class A's structure (aside from loads). For example, Class F charges 0.05% for administrative services (e.g. account bookkeeping), while Class A charges only 0.01%. These charges are buried in "other expenses".
    https://www.sec.gov/Archives/edgar/data/1584433/000005193117000279/exhn.htm
    However, "designed for wrap accounts" doesn't preclude being offered for sale through different sales channels (e.g. retail sales through third party brokerages). So F-1 shares can be offered for retail sale, regardless of what the designed was optimized for.
    "TIAA clearly says minimum is $250 and additional is $50 for F-1 shares. It has NTF logo displayed prominently as well."
    VF has noted (if I'm reading correctly) that TIAA does not flag funds as available for retail sale vs. available only through advisors. So if BALFX is available at TIAA only through advisors, then TIAA could be reporting correctly that it is NTF and its min is $250.
    In fact, since TIAA says that it requires at least $500 for a position sold through its retail brokerage, that $250 min suggests that it doesn't sell BALFX to self-directed customers. TIAA writes:
    "Minimum initial investment for mutual funds [in retail brokerage account]: The greater of either the listed amount in the fund’s prospectus or $500. Different minimums may apply for managed accounts."
    https://www.tiaa.org/public/brokerage-account-fees
    Click on mutual funds; the NTF section contains this info.
    For completeness, here's the full info page I could find on TIAA retail brokerage accounts: https://www.tiaa.org/public/offer/products/brokerage
  • Consuelo Mack's WealthTrack: Guest: Charles Dreifus, Manager, Royce Funds
    Just my humble pie:
    So the fund (RYSEX) was closed to new investors in 2012. The closing was a result of "a lack of opportunities in the market". The fund remained closed and held very little cash since no new money was coming in.
    Had he left the fund open, the fund would have accumulated cash (not necessarily a bad thing to new and old investors).
    Had he left the fund open, he could have deployed this cash during a dip in the market (opportunity).
    Instead, "no one came to party" (no one bought into his fund) after it re-opened. As a result, his fund bought very little new opportunities and I want him managing my money why?
    He's suggestion of VSMGX at the end of the interview is really an index allocation fund strategy.
    This is a fund that's made up of 4 index funds (fund of funds). Index funds have no active management and therefore no active down side risk strategy, they rise with the market and fall with the market. Only the bond index allocation in the "fund of funds" serves as the ballast to the equity index allocation. VWELX has a similar equity/bond allocation, but through active management has navigated the upside and downside with greater success.
    Here's the comparison over the last ten years VWELX outperformed VSMGX 9 out of 10 years):
    image
    Finally, I find it interesting that a active manager is recommending an non-active index fund.
  • the WSJ is closing its Google loophole
    I can't remember how much both Barron's and WSJ cost, but unless your portfolio is only a few thousand dollars, the money is money well spent and beats paying an adviser 1%
    Although of the two Barron's is a far better deal for most of us( $52 a year first year). The Murdoc's have horribly dumbed down the WSJ and it's investing articles are nowhere near as good as they used to be.
    I keep reminding myself to look at FT
  • the WSJ is closing its Google loophole
    Oh well. Had to happen sooner or later, I guess. We'll have to see how long it lasts. Though I prefer the FT anyway and am a happy subscriber there already.
    BTW the NYT[1] just launched a thing where new subscribers also get free premium accounts on Spotfiy. To me, that's a win-win and while I've not subscribed to Spotify, I plan to sign up to reward good journalism. And hey, I don't mind seeing what Spotify is all about, either.
    [1] You know, the newspaper that's allegedly "failing" in some deluded assessments despite double-digit growth in subscribers and readership.
  • American Funds - first timer
    Hi @VintageFreak,
    I am sorry to learn of your difficulties in your attempt to purchase F sares. I am going to reference the link to American Funds I recently posted above.
    https://www.americanfunds.com/individual/investments/share-class-information/share-class-pricing.html
    It reads, in part, "Class F-1, F-2, F-3 & 529 F-1, are designed for invstors who choose to compensate their financial professional based upon the total assets in their portfolio." With this, I'm thinking that to purchase F shares your account has to be part of a qualified fee based program. Is your account at TIAA part of a fee based program?
    Again, I admire you trying to find a short cut around the above ... and, if you do "I say "Bless You" and don't tell.
    Again, I am sorry to learn of your difficulities; but, not surprised. And, I wish you the very best in your finding a resolution to this matter.
    Best regards,
    Old_Skeet
  • American Funds - first timer
    VF, at Fidelity the minimum is $2500 for the inicial purchase of F1 shares. Maybe you need to investigate what the minimum is at your brokerage?
    dude... TIAA clearly says minimum is $250 and additional is $50 for F-1 shares. It has NTF logo displayed prominently as well. Can we just agree TIAA is the culprit here, not me and move on :-D