http://www.insidermonkey.com/blog/bruce-berkowitzs-fairholme-affiliate-in-talks-with-sears-holdings-corp-shld-regarding-short-term-loan-328818/
http://www.bloomberg.com/news/2014-09-19/sears-needs-10-times-loan-from-lampert-corporate-finance.html
"St. Joe Co. (JOE) may contribute as much as $100 million to the loan, according to a filing yesterday. St. Joe, a real estate and timber company, is 24 percent-owned by Bruce Berkowitz’s Fairholme Capital Management, which also has a 24 percent stake in Sears."

I believe, although I couldn't find the details again of what I've read, that two of the most hawkish members of the Fed, Fisher and Plosser, will rotate off as voters next year. This should make the Fed more dovish on balance. At the same time, Yellen has shown herself to be pretty dovish so far and to the extent that history provides any evidence, the Fed's chairperson usually gets what they want even though there's a committee that "votes" on whatever the Fed does. At the press conference after the meeting finished Yellen commented on the "Dot Plot" specifically and my interpretation was that she essentially said it just reflects each member's expectations about a future that hasn't happened yet and it doesn't tell you anything about how much confidence each member has in their own projections.
In terms of what happens when the Fed raises rates, in theory at least, the longer the term the less the rate should adjust. That's because what people believe about the next 10 years shouldn't have a 1:1 relationship with what happens today (although admittedly it does sometimes) and because future rates should already discount what's expected for the future.
I think if you wanted you could use the historical information from the Fed to graph or create a table of what has historically happened to 10 Years when the Fed Funds rate changes, or pretty much any other comparison you'd want to do.
federalreserve.gov/releases/h15/data.htm
If you do that I'm sure lots of people, including myself would love to see the graph :)
The following link shows the history for the Fed's target for rates. To my surprise when rates have gone up historically they've gone up pretty quickly.
newyorkfed.org/markets/statistics/dlyrates/fedrate.html

I'll call BS. I do not see rates at 3.75 by end of 2017.
"the Fed just said last week that this is what they expect to do! "
And how many times has one Fed governor said one thing only to have another Fed governor say the opposite a few days later? How many times have they changed their forecasts? How many times have they moved the goalposts?
Go about your business and invest in a way that is appropriate for you. This whole situation with what the Fed is doing and analyzing whether or not a couple of words ("considerable time") were the same on the last Fed statement has really brought this whole thing into a new realm of utter ridiculousness. (Yellen: "No mechanical interpretation of "considerable time" - in other words "it depends on what your definition of is is".)
Edited to add, and sure enough...."http://headlines.ransquawk.com/headlines/fed-s-kocherlakota-says-should-be-very-cautious-about-starting-to-raise-rates-with-inflation-so-low-23-09-2014"

This is not your Uncle (Ben's) Fed. Stating what they expect rates will be on a given date seems to me very close to "de facto" rate increases - albeit at a future date.
I felt that under Bernanke they were very attuned to the markets - especially commodities. Generally when commodities slid, they found a way to bolster the markets with dovish (and seemingly well orchestrated) statements from different governors. That's not happening this time.
Haven't paid due attention to PIMCO. But keep in mind the increases in the overnight lending rate, which I think they're talking about, could very well tank the equity markets and push money into longer bonds - which would cause long term rates to fall. Not sure there's any inconsistency in the two predictions.
A little more .... rjb112 Your math sounds correct. If and when longer rates rise longer dated bonds will get killed. The math is awful. My point above is that raising the short term lending rate doesn't necessarily have to cause longer rates to rise. Under some scenarios, depending on economic conditions, it could conceivably cause longer rates to fall. Seems to me some bond fund managers are betting on that second possibility occurring.
JSHT

@JohnChisum, the bond fund you went into has a manager that is actively doing things to prepare. A lot of bond funds never do that, because by prospectus they have to stay pretty close to an index, like the total bond market index, which is based on the "Barclays Capital U.S. Aggregate Float Adjusted Index, a broad proxy for the investment-grade U.S. bond market", according to M*.
There seem to be two big IFs:
1. Will the Federal Reserve actually raise rates 3.75% by the end of 2017?
2. What will happen to longer term interest rates, such as the 10-year Treasury rate?
PIMCO doesn't believe the Fed will go that high. Bill Gross and company believe there will be a "New Neutral" rate of 2%, not the old standard of close to 4%, which apparently the Fed still believes in.
But look, the Fed just said last week that this is what they expect to do! And they told the whole world. We'll see who turns out to be correct, the Fed or PIMCO.
With regards to your question about "will bond funds perform better than equity funds in this same climate", I have no idea. I've read that stocks have not reacted nearly as badly as bonds to the initial volley of interest rate hikes. But who knows if the past historical patterns will repeat themselves.

@rjb112, A lot of bond funds have been adjusting duration recently to get ready for the inevitable raise. While bond funds will go down I think it will depend on the managers. Long term funds are obviously going to get hit worse than short term. A bond fund I recently put money in has already reduced duration from less than 3 years to a average of 1.8 years. Also, will bond funds perform better than equity funds in this same climate?

John, the Fed also says they will raise rates in 2015....2016....and 2017. So it would be a steady raising of rates once they start. If it happens, and if the longer term rates follow suit, most bond funds are in trouble. The expected raise in 2015 would be to 1.25%, from the current rate of 0% to .25%. Even with that modest rise, the total bond market index would go down 5.7% in NAV, add in the 1.99% income for a total return of -3.7%. Again assuming that the longer term rates follow suit with what the Fed does.

The financial media will twist and turn this news as they have been doing.
The end of 2017 is a long ways off. The economy needs coddling beyond the current administration. Steady as she goes.

Last week, the Federal Reserve released its "Dot Plot", which is a plot of what each member of the FOMC thinks the Fed Funds interest rate will be. They think they will have raised interest rates 3.75% by the end of 2017. That's a lot, and it has big implications for bond funds. The big question: if they raise rates 3.75%, how much will the 10-year Treasury yield rise? Will it also go up 3.75% from where it is now, which is 2.57%? IF it does (admittedly a very big IF), we are going to see some big drops in the NAV of bond funds. Take the Total Bond Market Index Fund (VBMFX). It has a Duration of 5.7 years. For every 1% increase in the corresponding interest rates of the bonds in the fund, the NAV is expected to drop 5.7%. IF the yield on the bonds in the fund goes up 3.75% over 3 years, we could see a 3.75 x 5.7 = 21.4% drop in the price of the fund. Add in the yield to get the total return. The current SEC yield is 1.99%. With a rise in rates/bond yields, the bond fund SEC yield will rise, but since the average bond in the Total Bond Market Fund has a maturity of 7.8 years, it should take a long time to clear those bonds out of the fund for the yield to rise enough to significantly offset the NAV drop. Not a pretty scenario for the bond market.
Your comments please!
http://blogs.marketwatch.com/capitolreport/2014/09/17/dot-plot-shows-fed-will-be-quick-about-raising-rates-once-it-starts/?mod=MW_story_top_stories

Vanguard PRIMECAP Core Fund
http://www.sec.gov/Archives/edgar/data/826473/000093247114006730/ps1220a092014blue.htm
Vanguard Capital Opportunity Fund
http://www.sec.gov/Archives/edgar/data/932471/000093247114006729/capitalopportunityps11109201.htm
Vanguard PRIMECAP Fund
http://www.sec.gov/Archives/edgar/data/752177/000093247114006728/ps59a092014blue.htm
Here is one of the filings as an example:
Vanguard PRIMECAP Fund
Supplement to the Prospectus and Summary Prospectus
Important Changes to Vanguard PRIMECAP Fund
New or current Vanguard PRIMECAP Fund shareholders may not open new accounts or contribute to existing Fund accounts, except as described in this supplement. Clients enrolled in Vanguard Flagship Services® or Vanguard Asset Management Services™ may open new Fund accounts, investing up to $25,000 per Fund account per year as described in this supplement, in individual, joint, and/or personal trust registrations. There is no specific time frame for when the Fund might reopen for new account registrations by other Vanguard clients, or increase investment limitations.
Limits on Additional Investments
Current PRIMECAP Fund shareholders may invest up to $25,000 per Fund account per year in the Fund. The $25,000 limit includes the total amount invested during any calendar year in each Fund account. Dividend and capital gains reinvestments do not count toward the $25,000 annual limit. Participants in certain qualified retirement plans may continue to invest in accordance with the terms of their plans. Certain qualifying asset allocation programs may continue to operate in accordance with the program terms.
The Fund may modify these transaction policies at any time and without prior notice to shareholders. You may call Vanguard for more detailed information about the Fund’s transaction policies. Participants in employer-sponsored plans may call Vanguard Participant Services at 800-523-1188. Investors in nonretirement accounts and IRAs may call Vanguard’s Investor Information Department at 800-662-7447.
© 2014 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor.
PS 59A 092014

having to deal with bid/ask spreads which can be wide in something as thinly traded as HYMB. In the mini selloff in junk munis in early July, HYD sold off over 4% early that month (closing highs to intraday lows) while HYMB sold of over 3%.

@Junkster,
I have a large position in HYD and the bid/ask is a two edge sword. I have put in low market limit buys in and got some of them filled. Also, after the dividend is paid, I've noticed HYD does decline some. It could be people buying the dividend and then some selling.
I also have NHMAX that I bought when Fidelity waved the front end load of 4.2% - I just can't bring myself to pay a load.
YTD HYD is doing better then HYG
http://finance.yahoo.com/echarts?s=HYD+Interactive#symbol=HYD;range=1y

Hi Old Skeet!
I'm like you....cash ready, hang tough. It's coming..... after all, the G-20 are meeting now, so please be calm. We don't want to scare the children, now would we? I was looking in Fidelity funds because of EU doing QE. Thought some money. Would go elsewhere in the world. Bumped into this fund FEMEX. Wow! I say run away if this is the best they got. I am waiting for a small & mid cap fall....not so much the big stuff. Am buying silver now. Does anybody have any investments for the strong dollar? I am looking at MAPIX, GLFOX for this. Also, for U.S. mid caps: CHTTX. I like the girls. I also saw (on CNBC) that 1 in 4 Americans want to secede from the country. Me, too! And my state stinks, too. Duke says I can be President of our country if I want to. He said he'll be the army... not sure how well that's going to work out. Wife says she wants to be First Lady, and that means a new wardrobe. Can you say, deficits already?! That also means a new car...have to go in style. Maybe I can print my own money....that would help. Get some inflating going. That always helps things. Duke wants a new doghouse. Awww, the military always wants something. I guess I have to give it to him. Don't want a coup. He's been snappy since the pool's closed. Anyway, looking for a pullback really bad. I want to buy some things. Cash doesn't pay well.
Party on Dudes!
the Pudd

somebody once said "take me where the action is" 80% stocks &14% bonds...sounds about right for 4th Quarter, My age I leave out of any figuring

Would like to see SHLD stop falling.
Can't wait until earnings season.
Suspect it will be pretty good, given the vibrancy across nation this summer.
M* says I'm US Eq 50/EM 10/US Bond 10/Cash 30, shorts factored in.

"I don't care what HIS opinions are on index funds or how he handles investment costs, but when he directs his nonsensical 2nd hand information in my direction, I feel obligated to give him the "Facts"!"
Tampabay,
1. Being you do not care what MJG has to offer, and it happens to be a whole bunch, why are you reading his posts?
2. Being you do not care, why are you even on MFO? To talk about yourself?
3. "nonsensical 2nd hand information"? Huh?!?!
4. " I feel obligated to give him the "Facts"!" Who are you?!?!
5. Regarding your comment to me, no, I do not know your portfolio. From another board, which you are persona non grata, I know your " Stock Sector| Holdings Detail Vs. the S&P (per Morningstar)". I asked you "Would you be so kind to share your portfolio with us?" Possibly you should care what MJG says, so you can learn the difference.
Good luck with your "portfolio".
Mona

Scott....thanks for the note on WPC awhile back. It's establishing a firm position in the income sleeve.

Happy to help! It's a looooong-term holding for me and remains one of my largest holdings.
Actually, I didn't even notice this from a couple of days ago:
"NEW YORK, Sept. 18, 2014 /PRNewswire/ -- W. P. Carey Inc. (NYSE: WPC) reported today that its Board of Directors increased its quarterly cash dividend 4.4% to $0.94 per share, which equates to an annualized rate of $3.76 per share. Payable on October 15, 2014 to stockholders of record as of September 30, 2014, this marks W. P. Carey's 54th consecutive quarterly dividend increase. Since going public in 1998, W. P. Carey has paid over $1.5 billion in dividends to investors."
http://money.cnn.com/news/newsfeeds/articles/prnewswire/NY16615.htm

Asset Allocation | Holdings Detail Morningstar
Tampabay
Long% Short% Net%
Cash 3 0 3
U.S. Stocks 77 0 77
Foreign Stocks 5 0 5
Bonds 14 0 14
Other 1 0 1
Not Classified 0 0 0
Total 100 0 100
For What its Worth: 77% U.S. stocks 3% cash 0% short, Ready for 4th Quarter run up? Really.....

With the lull before earning season and mid term elections, I am wondering what investors on the board might be thinking, positioning, and or doing?
For me I have been mostly looking as the recent dip did not go deep enough to peak my buying interest in equities. In checking one of my reference sites I find that the S&P 500 Index is trading on a TTM P/E Ratio of 19.3 and on Forward Estimates at 16.8 while its year-to-date gain has been about 8.7%. With this I am wondering how much is still left in the ride until we reach year end? Yes, indeed a lot of uncertainties exist. I am still thinking October might bring a buying opportunity with a dip or pull back coming. After all, we have mid-term elections coming the first part of November before we get to the traditional fall rally phase part of the year starting somewhere between Halloween to Thanksgiving and carrying on past Christmas to the first part of the New Year.
My target asset allocations are 15% cash, 35% income, 40% equity and 10% other. Currently, I am cash heavy at 20%, income light at 25%, equity heavy at 45% and neutral in other assets at 10% as shown by Morningstar’s x-ray. I’d like to move 5% of my cash to equities for the anticipated traditional fall stock market rally but wish to position in during a good dip or pull back in the stock market. Should we get to the rally without the anticipated dip then I’ll just most likely let things ride as they are and forgo a rebalance after the 1st quarter. Heck, I always enjoyed my fall rally “spiff” investment move as it was a way I generated a little extra cash. My spiff investments set ups have been hard to come by of late.
I’ll close with I am currently just looking while I ponder.
So ... What might you be thinking?
Old_Skeet

MJG
September 19 Flag
Hi Tampabay,
"Sorry to learn that your situation is such that you have severely constrained options relative to active/passive fund decision-making and changes."
Who made it "personal"? I don't care what HIS opinions are on index funds or how he handles investment costs, but when he directs his nonsensical 2nd hand information in my direction, I feel obligated to give him the "Facts"!
His GENERAL comments on his fact finding missions would be useful sometimes...I guess......
How would you handle it John Wayne?

Mona, love you, but you know my portfoilio by heart by know, but I'm going to give MJG MY Stock Sector| Holdings Detail Vs. the S&P (per Morningstar)
Portfolio Tampabay
(% of Stocks sector) vs S&P 500 (%)
Tampabay S&P
Cyclical 18.30 30.51
Basic Materials 0.98 3.36
Consumer Cyclical 9.47 10.42
Financial Services 7.81 14.76
Real Estate 0.04 1.97
Sensitive 23.83 43.02
Communication Services 11.52 3.98
Energy 2.66 10.39
Industrials 3.36 10.94
Technology 6.29 17.72
Defensive 57.87 26.47
Consumer Defensive 29.10 9.37
Healthcare 27.73 14.09
Utilities 1.04 3.01
No diversification there Baby ,"a diverse array" not really....tb