10-25-24

DB plans became too expensive to run. The benefits grew steadily, but the funds/portfolios supporting them didn't.
Then, there were abuses.
Companies could raid DB plans with excess funds, but not care when plans got underfunded. The nail in the coffin was when the rules were changed to require flowing some unfunded pension liabilities through company earnings. No wonder, companies would do anything to avoid the DB trap. Good luck to BA machinists.
States also abused DB plans by skipping their required contribution, or funding it with borrowing but sticking the plans with debt servicing. State DB plans still exist, but they are supplemented or replaced by 401k/403b.
People who miss DB plans can buy immediate-annuities (SPIA) that are basic, no-frill annuities that can be bought online (i.e. without high commissions). Realize that insurance company has to make money too, so the only way to come out ahead with SPIA is to live forever.

If M* can be trusted:
WCPNX. ER = 0.65%
-duration is out to 5.5 years, now. That smells more like intermediate-term.
-risk, looking back 3 years: just 20 out of 100, on their proprietary scale.
-LOW risk, HIGH returns.
-zero in equities.
0.97% in cash. So, fully invested.
Weighted coupon =5.37.
Securitized stuff in portfolio= 56.02% of total.
gummint = 29.21%
corporate = 13.77%
https://www.morningstar.com/funds/xnas/wcpnx/portfolio
I own it, and am growing it. Since I got in several weeks ago, it's been dead. Maybe I should not be so patient, but the sadistics and ratings (not just at Morningstar) look attractive. It fits into the frame of what I've been wanting to initiate in my taxable.

Indeed that is a good news. Here is a map from USGS on lithium deposit in US.
https://pubs.usgs.gov/sir/2017/5118/sir20175118_element.php?el=3
US is not a big producer of lithium, majority of lithium came from Chili and Argentina.

That came as a surprise to me too. The latest offer included a one time upfront bonus of $7k and $5k deposit into 401(k). May be they will be offered an increase in this.
Everyone wants their future guaranteed but not their own contributions. As we remember, UPS union received a handsome contract about 18 months ago but their service level has not improved. I would rate USPS about 10X over UPS service.
Good luck indeed for DB plan.
As to breaking up BA (on my wish list), evidently they are looking to sell their space business.

A lot to digest, but very interesting and worth understanding.

The Federal Reserve has continued to unwind the buildup in its balance sheet. It accumulated a lot of Treasury debt and mortgage backed securities (MBS) during 4 separate rounds of quantitative easing (QE), and since early 2022 it has been letting those mature and roll off. That action is referred to as “quantitative tightening”, or QT.
QT is a bearish force on the stock market, because it takes liquidity out of the banking system. But QT has been getting mitigated by something else the Fed is doing. Starting in 2021, the Fed began accepting a whole lot of “reverse repurchase agreements” or RRPs. An RRP involves a bank borrowing Treasuries from the Fed, to make its balance sheet look better. That bank pledges some of its loan book as collateral for the borrowed Treasuries. The effect of this on the stock market is that RRPs lock up money in the banking system so that this money is not available to do things like help lift stock prices. You can read the NY Fed's description of the process at https://www.newyorkfed.org/markets/rrp_faq

source:
McClellan Financial Publications
reverse_repos_mitigate_feds_qt_campaign

Newmont (NEM) fell nearly 15% today on a weaker than expected earnings report if anyone is wondering what happened to GDX / gold miners.

I've learned to expand my definition of alternative funds. I look at PVCMX as an alt fund in that it uses cash for defense - in a manner quite different from most other funds (thus the ALT view).
Low SD of 5, with a 7.84% 5 yr return. It's worst quarter in 5 years was -(1.83%).
I had purchased QQMNX recently as well, but that's it for market neutral funds. It will sit alongside HMEZX, RSIVX, WBALX, CBUDX, CBLDX. Low SD grinders that I hope get me close to 7% annually.
Many true ALT funds are finicky.

warning : the potential complexity of most gold ETFs is a mess for taxes.
if not each year, then certainly the manual collection and calculation of data of all years past when you sell. repeat for each subsequent sell, and hope you did it roughly right. there is no hand-holding or even hints in turbotax.
it is for this very reason i abandoned k1s in the past, and will never be adding new buys in this space.

+1 / Sounds like it. Best held in tax exempt / tax sheltered accounts. As Yogi noted above the 28% tax on collectibles does not apply to etfs that invest only in mining companies.

warning : the potential complexity of most gold ETFs is a mess for taxes.
if not each year, then certainly the manual collection and calculation of data of all years past when you sell. repeat for each subsequent sell, and hope you did it roughly right. there is no hand-holding or even hints in turbotax.
it is for this very reason i abandoned k1s in the past, and will never be adding new buys in this space.

”HM mentions most of us should be investing in low risk / low volatility debt that will return 7-10% going forward and provide a "fix outcome". Sounds good.
Anyone have a list of such investments?
@bee - You need to mail that request to Santa.

from the memo:

In my view, the thought process set forth in this memo leads to the conclusion that investors should increase their allocations in this area if they are (a) attracted by returns of 7-10% or so, (b) desirous of limiting uncertainty and volatility, and (c) willing to forgo upside potential beyond today’s yields to do so. For me, that should include a lot of investors, even if not everyone.
My recommendation at this time is that investors do the research required to increase their allocation to credit, establish a “program” for doing so, and take a partial step to implement it. While today’s potential returns are attractive in the absolute, higher returns were available on credit a year or two ago, and we could see them again if markets come to be less ruled by optimism. I believe there will be such a time.

HM mentions most of us should be investing in low risk / low volatility debt that will return 7-10% going forward and provide a "fix outcome". Sounds good.
Anyone have a list of such investments?

@MikeM - exactly what I was going to say! Along with FLRN there's also FLOT. They're not quite indistinguishable, but pretty close.
The knock against IG floating rate funds is that they don't do as well in falling interest rate environments. Or so I've read. And until this month (Oct) WCPNX was slightly outperforming them YTD, though not now.
A question is what you are looking for. RPHYX/RPHIX may be unique in how it invests. This results in after-expense returns that are extremely steady and IMHO worth the cost. Funds like FLRN and FLOT invest more traditionally and have slightly higher volatility and slightly lower returns. They are still well within the ultra-short duration and volatility ranges.
WCPNX is a traditional short term bond fund. As such, it can get jostled by market disruptions (see, e.g. 2022 and March 2020). The floating rate funds also got hit in March 2020, a market "blip" that affected pretty much everything. They held up nicely in 2022. Also, Schwab imposes a fee if you sell WCPNX within 90 days of purchase.
So WCPNX is a good fund if you're anticipating holding it for awhile (at least a year), but perhaps there are better choices if you are looking very short term.
Be advised that WCPNX changed name and strategy at the end of 2016. It had been Weitz Short-Intermediate Income Fund.
Portfolio Visualizer comparison - RPHIX (benchmark), WEFIX, FLRN, FLOT

I believe RPHYX is no TF at Schwab, but that doesn't help you with the higher than normal ER (1.19%). I don't think to much about the ER since, even being on the high side, the risk reward is so good. FWIW, I've also held FLRN (SPDR Bloomberg Investment Grade Floating Rate) for years as a steady-eddy income fund, though this one has had a couple hiccups along the way.

For the past two months, I have been following two "Market Neutral" funds, QQMNX and VMNFX, which held up very well and provided some protection during recent market downturns. New managers have been at the helm of both funds since 2021.
As MikeM said: "I have to admit, QQMNX is a tempting alternative in this alternative field for a less bumpy ride and, so far, excellent returns."
..............QQMNX....VMNFX
YTD.........15.6%.......8.9%
3 YRS.......14.4........14.8
5 YRS.......10.3..........8.2
2022..........9.5.........13.5
Std. Dev....8.6%.......7.3%
As a retired investor who doesn't need a lot more money, preserving capital is more important to me than seeking sizeable returns on capital. While both funds have excellent risk/reward profiles, I have decided to add QQMNX to my portfolio at this time of fairly high equity valuations.

A couple other market neutral funds you can consider: BDMAX and JMNAX. BDMAX has outperformed QQMNX over the last 1 and 2 year trailing periods, and has a higher Sharpe ratio and lower standard deviation over the last 3 years according to Morningstar data. JMNAX has had lower returns, but has a smooth ride. I use a combination of BDMAX and JMNAX, but I might consider adding QQMNX. Thanks for bringing it up.

And thanks for bringing up BDMAX and JMNAX, much appreciated.
Unfortunately, BDMAX has a 5.25% load at my brokerage firm. But, another share class, BDMIX, may be available in an IRA with no minimum investment limit. Still checking it out.
However, JMNAX looks very promising and, as you said, it offers a "smooth ride" with a very low standard deviation of 4.35%. It's available NTF (No Transaction Fee) and offered load-waived.
I will continue to monitor both funds. I am currently fully invested, but some of my CDs are maturing early next year and will make some investable cash available.
Thanks again, Chinfist.

AI is at its best when we utilized to solve problems such as these.

Using a combination of water testing and machine learning, a U.S. Geological Survey-led study estimated between 5 and 19 million tons of lithium reserves are located beneath southwestern Arkansas. If commercially recoverable, the amount of lithium present would meet projected 2030 world demand for lithium in car batteries nine times over.

Article:
unlocking-arkansas-hidden-treasure-usgs-uses-machine-learning-show-large
Indepth Article:
https://science.org/doi/10.1126/sciadv.adp8149

AAII Sentiment Survey, 10/23/24
BULLISH remained the top sentiment (37.7%, average) & bearish remained the bottom sentiment (29.9%, below average); neutral remained the middle sentiment (32.4%, above average); Bull-Bear Spread was +7.8% (above average). Investor concerns: Elections, budget, inflation, economy, the Fed, dollar, Russia-Ukraine (139+ weeks), Israel-Hamas (54+ weeks), geopolitical. For the Survey week (Th-Wed), stocks down, bonds down, oil up, gold up, dollar up. NYSE %Above 50-dMA 56.58% (positive). Bond yields & dollar rose since the Fed's jumbo cut on 9/18/24. #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/post/1709/thread

I sold the lot I bought last week as the general market looks to pause, union leader in his interview did not give me the warm feeling the company’s offer would be ratified, post 11/5 election uncertainty, etc. The profit on the trade is not worth talking about but better than if I had traded fixed income. I redeployed the money into NYCB, which at the moment looks a bit rich but its turnaround is already underway.