MSCFX Because of, or in spite of, localization?
From M, via SFGate: The main argument for regional funds is that managers gain an edge by being close to the companies they own.
But from
CS Monitor (1998): Many years ago, regional investing might have made sense. ... But with the proliferation of data sources and telecommunication, I can be just as close to a company in California as I can to one down the street.
It went on to observe that out of thousands of stock funds, there were only "about two dozen [regional funds] (whose combined assets total $3.3 billion)" . At least back then I could name a handful of those two dozen - Safeco NW, Franklin Calif. Growth, M&P Growth, and Golden Gate Fund GGFDX (SF Bay Area). Name any regional fund management company today other than M&P. I can't (which doesn't mean they don't exist).
All these regional funds falling by the wayside. I think that qualifies as odds stacked against the genre. Which brings me back to my lead sentence - is M&P doing well because of, or in spite of, its regional focus?
Most might indeed agree that M&P trounced the odds decade after decade. I suppose it did in the sense that it managed to survive while most regionals didn't. But in terms of performance, it was decidedly mediocre for the three decades between
1970 and 2000. (
From 1/1/70 to 12/31/99, a $
10K investment in MPGFX grew to $349K, compared to $345K for the average LCBlend fund, and $5
13K for the S&P 500.)
This lends credibility to the thesis that it is the fund's management and not its regionality that had given it more recent success.
when should I act?
when should I act?
MSCFX IMHO it's all about culture and attitudes, not state lines. How do people act, vote, shop? By these metrics, I tend to view cities like Buffalo and Pittsburgh as midwestern cities. And then there's how people talk:
Pop vs. Soda (vs. Coke):
http://www.popvssoda.com/More to the point on regional funds: Who remembers Franklin California Growth Company (still FKCAX)? It
gave up its 80% California growth mandate in 2002 (reducing it to 50%, i.e. majority), and then in Oct 2004
dropped California from its mandate altogether.
I figure if a growth fund can't make it in tech-rich, large economy, California (note that Franklin Templeton is based in California), then the odds are stacked pretty high against funds in smaller regions.
Northwest-focused funds
gave up the ghost also around the same time. I was familiar with Safeco Northwest, which expanded into Canada (BC) in 2002, and
gave up the regional focus entirely Oct. 2003.
Stock mutual funds that have done well since the Brexit low @Paul_Katseff, thanks for the contributions! It appears both articles are pushing IBD's Comp rating so I wondered if you have any statistics about how well those ratings have done over time and in different markets? The articles say one should look for stocks with a rating of 95 or higher. If someone had bought all stocks that reached that rating how would they have done? What's the expected holding period or the trigger to sell?
I'd also suggest being careful with data from Morningstar. In the second linked article your table includes the top
10 funds since the June 27th lows but it doesn't include Primecap Odyssey Aggressive Growth (POAGX), which I believe had a
17.5% return from 6/27-8/28, or Primecap Odyssey Growth (POGRX), which I believe had a
16.
1% return during that period. I only checked 5 or 6 funds that I own or keep track of and know have done well so I wouldn't be totally surprised if M* left out a few others too but who knows, maybe I just got lucky.
when should I act? A chart comparing an investment starting in 1980, for example, should have an inflation component to it to reflect the decline in purchasing power.
Here are the inflation adjusted returns for VFINX since
1986 (last column):
MSCFX @Lewis: I know this is hard for you to believe, but the Sun doesn't rise and set only in the eastern region of the U.S. The Midwest is the real America.
Regards,
Ted
Minnesota Vikings "Skol Vikings"
MSCFX People have been wondering that about M&P since Christmas of 1961.
when should I act? @DanHardy>> A chart comparing an investment starting in
1980, for example, should have an inflation component to it to reflect the decline in purchasing power.
Not quite following the point. Inflation "applies" to all investments. What $
10k bought in
1979 costs $33k today, $29k if you start in
1980.
While VOO went from $
10k at the end of
1979 to $5
12k --- well over a half-mil.
That's why we all invest.
when should I act? Hi Guys,
Although it has taken a number of informed comments, we have finally arrived at deploying the Presidential Cycle as a market entry/exit timing mechanism.
Like most market advice, it is not without considerable controversy. To be fair, I provide two Links, one that favors the proposition and one that opposes it:
http://gbr.pepperdine.edu/2012/10/presidential-cycle-and-stock-market/http://www.marketwatch.com/story/the-presidential-cycle-is-nonsense-2012-01-20The divergent opinions are not surprising. That mix is what makes for a dynamic marketplace.
Since I favor a Buy-and-Hold approach, I am a neutral on the matter. There certainly is evidence to support the proposition, but that evidence can be questioned from a statistically meaningful perspective.
It’s amazing how often experts offer faulty forecasts on significant matters. Their error quotient is disappointingly high. Remember the “x-rays are a hoax” statement by Lord Kelvin. And Thomas Edison’s prediction that “….. alternative current is just a waste of time. It could kill a man as quick as a bolt of lightning. Direct current is safe.” And the military is certainly not immune to bad projections. Recall RADM Clark Woodward exclaiming that “as far as sinking a ship with a bomb is concerned, it just can’t be done.”
So much for the accuracy of the expert class. That’s even more so in the financial community. The forecasts are often fun and entertaining, but I’m not convinced that they can be relied on in terms of action for positive outcomes. Forecasting is a risky business for both professionals and amateurs alike.
Best Wishes.
when should I act? Look back at the last 5y of, say, DVY or TWEIX and check both the size and the number of the "corrections."
You can wait a long unprofitable time waiting for a supposedly better moment to invest.
I always keep the Japanese experience in the back of my mind. And many charts do not take into account inflation. A chart comparing an investment starting in
1980, for example, should have an inflation component to it to reflect the decline in purchasing power.
http://finance.yahoo.com/quote/^N225/?p=^N225
Chuck Jaffe: Your Money-Market Fund Is About To Undergo Some Changes Here we go again. Either bad English, or bad reporting. Either way, not good for a columnist:
"Institutional and municipal money-market funds will move from the stable $
1 share price to a floating net asset value. Retail funds sold to individual investors will maintain the buck as their pricing standard."
The first sentence suggests that institutional funds
and muni funds (i.e. whether they are institutional or not) will have floating NAV. Wrong. It could read: institutional prime and muni MMFs, or for more clarity: institutional prime and institutional muni MMFs ...
There are two and only two attributes that matter
- institutional vs. retail
- US government vs. anything else (prime, i.e. corporate, or muni)
Muni MMFs are no different from prime MMFs. If they are institutional, their NAV must float. If they are retail, they can keep a fixed NAV, with fees and/or gates.
Here's what Fidelity correctly
writes:
Furthermore, under the new SEC rules, retail prime and
retail municipal money market funds are:
- Able to continue transacting at a stable $1.00 NAV.
- Available to "natural persons" investors who are not corporations or other types of organizations.
- Not available to institutional investors. Institutional investors will be eligible to use government money market funds and institutional non-government money market funds, which will have a floating four-decimal NAV.
MSCFX This fund was hugely successful shortly after it was opened, and in a month it will close. It is very positively profiled in this month commentaries. I decided to compare it with the Vanguard Tax Managed Small Cap fund VTMSX. I found that the outperformance of the MSCFX is due to the first year of its existence, when it was very small and nimble and managed to avoid the plunge of 2011. However, starting from 01/11/2013 the performance of these two funds is nearly identical. An advantage of the index fund VTMSX is that it does not suffer from its size and is not going to close. Any comments?
Chuck Jaffe: Your Money-Market Fund Is About To Undergo Some Changes
David Snowball's September Commentary
Seafarer Overseas Growth and Income Closing What you're describing isn't a Roth conversion at all. It's a distribution (counting toward your RMD) and a separate contribution to a Roth. There's no connection whatsoever. Unlike a conversion, here you don't have to show that the Roth money came from a traditional IRA.
Often funds that close will say something about whether existing shareholders are allowed to open new accounts. For example, RPHYX
prospectus:
Existing shareholders ... may purchase additional ... shares of the Fund through existing or new accounts ...
In contrast, PRWCX's
prospectus says:
New T. Rowe Price IRAs in the fund may be opened only through a direct rollover from an employer-sponsored retirement plan. ...The fund reserves the right, when in the judgment of T. Rowe Price it is not adverse to the fund’s interests, to permit certain types of investors to open new accounts in the fund ...
So the ability to do a Roth conversion into a new Roth IRA account is at the discretion of T. Rowe Price. I've used both of the paths above (for another fund, not PWRCX) - a direct rollover from a 40
1(k), and a Roth conversion (at the discretion of TRP).
As you wrote, you'll have to ask Seafarer what its policy is.
Seafarer Overseas Growth and Income Closing I have PRWCX in my Traditional IRA at T.Rowe but not among my Roths. Guess I could convert just $1,000 (their minimum IRA account requirement) of PRWCX to a ROTH and than move as much other Roth money into it as I wanted? Heck, they might not even insist on $1,000.
At this time such move would be of little consequence. On the other hand, might be good to do it before they change their rules. From what I've read, there's no age limit for Roth conversions. Out of curiosity ... would a (taxable) conversion to Roth count towards one's RMD requirement? (suspect NO)
As I recall, TRP didn't require the $
1K, but I didn't want to abuse the privilege, so I did a "full" $
1K conversion.
Regarding RMD
:
a) You are required to take your RMD before you do any conversion for the year (i.e. the first money out of the IRA is considered the RMD);
b) If you put RMD money into a Roth, it is considered a new contribution, not a conversion; so you need to have earned income, otherwise it is an excess contribution, heavily penalized.
Seafarer Overseas Growth and Income Closing I've gone through these exercises with Vanguard and with T. Rowe Price. At Vanguard, no new account means no new account, even for in-kind transfers. T. Rowe Price is happy to move shares around for you, even if it means opening new accounts for a closed fund.
Thanks for the tip. I have PRWCX in my Traditional IRA at T.Rowe but not among my Roths. Guess I could convert just $
1,000 (their minimum IRA account requirement) of PRWCX to a ROTH and than move as much other Roth money into it as I wanted? Heck, they might not even insist on $
1,000.
At this time such move would be of little consequence. On the other hand, might be good to do it before they change their rules. From what I've read, there's no age limit for Roth conversions. Out of curiosity ... would a (taxable) conversion to Roth count towards one's RMD requirement? (suspect NO)
