Stock picking is not easy over time and I certainly don’t have the time and skills to do that consistently, Thus we use mutual funds (both index and active) and they provide good enough return for us. In recent years, we include active ETFs that open up more possibilities in our asset allocation. Not trying to overly greedy, we stride to keep up with S&P500 index while reducing the downside risk as our goal. So far so good.
We got lucky (not skills) with few stock picks:
Bought lot of Apple when Steve Job introduced iPhone back in the 90’s and the stock has done well.
Started buying BRKB after reading Warren Buffet’s books. When Charlie Munger joined Buffet, we continue to add on every dips. Through Buffet we learn to be humble in order to be a good investor.
With the lately AI craze, we stay within our competency and pick a semiconductor ETF, SMH, instead NVIDA. Even though SMH has 25% NVDA, the rest are “picks and shovels” companies similar to those of the gold mining days. So far the thesis holds up.
Over the years, we have too many loser stocks to list here. Thus, we hire good active managers to run the funds for us. There is something to be said about diversification with just a S&P500 index fund or ETF.

Based on 2023 portfolios, in high tax states (~10% marginal rates) SUTXX is competitive with VUSXX on an after-tax basis.
Rougly 20% (19.94%) of VUSXX was subject to state income tax.
That shaves ~20% x 5.28% x ~10% ≈ 0.1% off the after tax return.
In contrast, SUTXX was virtually 100% (99.61%) state tax exempt.

@BaluBalu Schwab is competitive with minimum balances of $1MM on a few products. VMSXX 3.18% vs SWOXX 3.19% and VMFXX 5.28% (VMRXX 5.29%) vs SNAXX 5.30%. Schwab does not monitor if the balance falls below $1MM. Schwab is not competitive on the Treasury Money Market even with a $1MM balance. VUSXX 5.28% vs SUTXX 5.17%.

Our own Lewis Braham just highlighted them in An article in Barron’s. Some excerpts:
“ Despite the confusion, some of these funds are worthy diversifiers for a traditional fixed-allocation portfolio. The hard part is figuring out which ones, as their strategies can vary significantly. “The issue to me is ‘tactical’ means the portfolio changes,” says Michael Lowenberg, manager of Modern Capital Tactical Income  (ticker: MCTDX), which Morningstar categorizes as Moderate Allocation. That category generally includes funds with 50% to 70% in stocks and the remainder in bonds, but Lowenberg says, “Our portfolio is dramatically different” from a year ago when “fixed income wasn’t investible” as interest rates were rising and bonds falling.”
“In early 2023, Lowenberg avoided most bonds, but today, now that he thinks the rate increases are over, his fund’s portfolio, as of March 31, was 53% in bonds and cash. Lowenberg’s aggressive shifts have paid off. In 2022, his fund was up 13.9%, with significant weightings in energy stocks and cash in an inflationary environment. Last year, the fund was up almost 18% as he gradually shifted more toward high-yield bonds and floating-rate debt.”
“How do you analyze a fund like this when you don’t know what’s in its shifting portfolio? Morningstar categorizes only 80 mutual funds and 23 exchange-traded funds as Tactical Allocation, but if you include the word “tactical” in a fund screen, those numbers go up to 126 mutual funds and 50 ETFs. Some but not all of those correctly belong in non-tactical-allocation categories as they are shifting more between individual stock or bond sectors than entire asset classes.”
“Compounding the confusion, some of the best tactical funds invest in closed-end funds, both to allocate their assets and to exploit deep price discounts to the closed-ends’ underlying portfolio values. When closed-end fund price discounts narrow, their share prices get bid up. That augments the tactical funds’ returns but also adds an extra layer of closed-end fund fees. Modern Tactical’s seemingly high 1.92% expense ratio actually masks that it charges a much more reasonable 0.60% management fee. There are additional fees charged by funds it holds, like Templeton Emerging Markets (EMF), which has a 1.47% expense ratio, but also trades at an attractive 15% discount.”
“Modern Capital has an 0.86 three-year Sharpe ratio, higher than any fund in Morningstar’s Tactical Allocation category, followed by Saba Closed-End’s 0.44 and Matisse’s 0.39. Most funds in the category have negative Sharpes, indicating they aren’t rewarding investors enough for their risks.”

Twice I’ve asked absolute strangers met while traveling for investment tips. More of a conversation piece than serious talk. The first was while relaxing at a beach in the Florida Keys sometime in the early 2,000s. The fella recommended gold. Had been in a bear market. But had a great run later that year. Miners were up 30+% for the year. The second came from a young fella riding a hotel shuttle bus to the airport in Charlotte NC 3 years ago. He recommended 1 stock - NVIDA. Being of the “brilliant” variety, I completely ignored both suggestions. :) Have to wonder how much NVIDA is up since May ‘21?

Don't feel too bad.
A coworker asked me for a stock tip in 1995 or 1996.
I disclosed that I only invested in mutual funds and was not a stock expert.
I suggested he consider Microsoft which recently released Windows 95.
IIRC, he invested ~$10k initially in MSFT and another ~$10k a few weeks later.
My coworker left the company a short time later and he didn't even buy me lunch for the stock tip! :-(
MSFT got hammered in the Dot Com bubble and it also performed poorly under Steve Balmer.
Still, if someone invested $10k in MSFT on 01/02/1996 and held through yesterday
(experiencing a max drawdown of ~70% along the way), Microsoft stock would be worth over $1.2mm.
Did I purchase MSFT - of course not!
MSFT Statistics
I recall when Steve Jobs returned to Apple as interim CEO in late 1997.
Apple's stock price was very low at the time and Jobs brought a lot of energy to the struggling company.
Around this time, I thought Apple might be a good investment opportunity.
If someone invested $10k in AAPL on 01/02/1998 and held through yesterday
(experiencing a max drawdown of ~82% along the way), Apple stock would be worth ~$16mm!
Did I purchase AAPL - of course not!
AAPL Statistics
Oh, and I've lived within 15 miles of Amazon's main corporate headquarters over the past 30+ years.
There were many articles about Amazon published in local newspapers during the 90s.
The company's sales took off like a rocket but profits were elusive during those times.
I believed the stock was consistently overvalued.
Did I purchase AMZN - of course not!
I now regret conducting this exercise as it has triggered a major bout of depression!

@Carefree It would be interesting to hear how you happened on this one and what you like about it. Suspect there’s a story there or maybe a personal situation that lends itself to this fund.
MCTOX
1.92% ER
About 40/40 equity / fixed income
10-20% “other” and a little cash
Pretty much a “go anywhere” mandate
They can short securities, but don’t currently seem to be shorting to a significant degree.
Heavy investment in real estate and energy (MLPs?)
Low asset base - only around $50 mil AUM
Turnover 1,229% These guys are “wheeling and dealing.”
I don’t worship at the alter of M*, but do look at what they say. In this case M* gives the fund a Negative rating. They don’t hand a lot of those out. They could be proven wrong as the fund is so new it’s hard to tell. That said, I don’t think I’d buy a fund with their negative rating. They’re generally correct on that score.
There’s not much they like, but in particular M* faults the “excessive” fees and lack of investment experience by the managers, Following is a brief excerpt from Morningstar::
”Peter Montalbano brings three years of listed portfolio management experience. The team is small and inadequately equipped, with only one other listed manager supporting it. Together, the two average three years of listed portfolio management experience “

jesus christ
Like teaching
Can one buy 5% Fidelity money market funds within a CMA?
y/n

@rforno …. Thanks very much for posting this. I didn’t realize that Schwab was charging so much for their MMs. I will have to explore some of these alternatives that folks here are recommending. So did you put all your excess cash into SGOV?

Aren't these Schwab money market yields net of the expense ratios? If so, while the expense ratios are high, the money market yields are competitive with Vanguard and Fidelity.
https://www.schwabassetmanagement.com/products/money-fund-yields

All three of us have Schwab accounts and so you do not need my comparison with
Vanguard sweep account, which has a 7 day yield of 5.28% as of 6/5/2024.
Yes, yields are net of expense ratios. But the Schwab yields are not competitive with Vanguard's for MM balances below $1M. I have not checked for the higher balances.

I have 40+ stocks in a stock/bond portfolio. Cash/ bonds are at 25%. NVDA started at 1% of portfolio and is now at 4%. Gain for the year as a whole is +12%. Tech and Utilities lead the way. I am pleased with stocks only so far and was lucky on a few picks(NVDA, AVGO,VST and NRG).

IMO, the most compelling CP CD rates are at 5 years. This is a moment in time that will pass far quicker than many here think. Not sure what is compelling about 1-12 mo rates when Prime MMkt funds are paying just about the same and provide full flexibility for that bucket.

Everyone has their own personal criteria for how they use brokerage CDs. I personally do not want to tie up my money for 5 years at my age, but others may be interested in doing that. Regarding MM funds, I do maintain a fair amount for liquidity reasons, but I have already started to see some decline in MM rates over the past couple of months, and I do not expect those rates to stay the same, or increase in the future.
But to be fair, what is compelling for me, would not necessarily be compelling for others, such as you.

If you can manually buy (from your sweep) one of their 5% money funds, looks like a complete winner
In your Fidelity brokerage account, "When [you] sell something in [your] Fido account the proceeds go automatically into FDRXX."

>> CMA ... is just a standard brokerage account with a few special features.
points out one of the redditors at that site. Appears quite so; I am having trouble finding meaningful limitations. If you can manually buy (from your sweep) one of their 5% money funds, looks like a complete winner.

Guys, my question is only WHERE low_tech is going to move his money when mm drops below 4.5% !
Nothing to do w 4% swd, which has always been low imo.

My retirement portfolio is kicking off over 6%, most of which gets reinvested into my taxable account -- including all the MM interest.
I moved part of my SCHD holdings into a MM a few months ago -- it pays more interest than SCHD and the principle is now stable. Why get 3.5% with a fluctuating share price when you can get 5% with a stable share price? I know I'm forfeiting growth but that's okay for now. I have other stock holdings.

Thanks @Mark
My sense has been that there’s still some “reasonable” value out there if you get away from the big hitters like the ones you cited. A “sense” isn’t the same as a “fact” and I could be wrong. Nor would I want to direct anyone to specific areas I think might still hold value. Another thing … If the heavy hitters take a tumble, they’d probably bring down a lot of other stuff even if it’s reasonably priced.
I posted last night how NVDIA has zoomed 150% (or some crazy number) YTD and has passed Apple now in value! Link

https://www.sec.gov/Archives/edgar/data/874964/000093041324001838/c109092_497.htm
497 1 c109092_497.htm
THE LAZARD FUNDS, INC.
Lazard Managed Equity Volatility Portfolio
Supplement to Current Summary Prospectus and Prospectus
The Board of Directors of The Lazard Funds, Inc. (the “Fund”) has approved the liquidation of Lazard Managed Equity Volatility Portfolio (the “Portfolio”).
No further investments are being accepted into the Portfolio, except for investments by certain brokers or other financial intermediaries or employee benefit or retirement plans (acting on behalf of their clients or participants) with pre-existing investments in the Portfolio pursuant to an agreement or other arrangement with the Fund, the Distributor or another agent of the Fund regarding Portfolio investments. Promptly upon completion of liquidation of the Portfolio’s investments, the Portfolio will redeem all its outstanding shares by distribution of its assets to shareholders in amounts equal to the net asset value of each shareholder’s Portfolio investment. It is anticipated that the Portfolio’s assets will be distributed to shareholders on or about August 5, 2024.
Prior to the liquidation of the Portfolio, depending on the arrangements of any broker or other financial intermediary associated with your account through which Portfolio shares are held, the Fund’s exchange privilege may allow you to exchange shares of the Portfolio for shares of the same Class of another series of the Fund in an identically registered account. Please see the section of the Prospectus entitled “Shareholder Information—Investor Services—Exchange Privilege” for more information.
Dated: June 5, 2024

Guys, my question is only WHERE low_tech is going to move his money when mm drops below 4.5% !
Nothing to do w 4% swd, which has always been low imo.

Thanks to @yogibearbull and @msf. That 15% “cash position” I referenced earlier was somewhat in error and I’d gone back and edited it out - but too late. Had overlooked the fact that I count a significant slug of PRIHX as “cash” for allocation purposes. Probably not wise, but I’ve long done it. So currently the actual (retirement assets) allocation to Fido’s money market funds is only around 7-8% (about half of my cash position). And that is split between Roth and Traditional.
Good news. I followed Yogi’s directions and stumbled upon the Fido settings for cash positions. When I clicked on “cash” in my portfolio overview it pulled up the current setting as SPAXX. :) So I take back any bad things I may have uttered about Fido.
FWIW - My nominal IRA cash weighting (including PRIHX) is 10%. So at 15.5% today there is an excess amount equal to around 5.5% that is earmarked for some needs later this summer.
I am rewarded nearly every time I log in to this great board!

@David. Since I started this thread. I will answer your question with why I had an interest. I find that the rule is often quoted so I wondered aloud why some fund company didn’t offer a 50/50 fund fitting Bengen model. Personally I think the rule silly and unworkable in real life and only meaningful as a thought exercise.

I’m really getting screwed. I remember when my Fido retirement accounts used SPAXX. Than that changed a year ago to “money market.” I didn’t realize there was a difference. Duh. Please advise what step I need to take in order to change my settings so that SPAXX serves as the sweep account for my retirement accounts.

If you're looking at your account positions and seeing "Cash, Held In Money Market", that's cash held in a money market fund, not a money market bank account. Click on the link. You'll likely see that it is SPAXX. Mine are FDRXX, perhaps because of grandfathering. Just a couple of basis points difference between them. Both are just south of 5%.
Fidelity taxable MMFs.
As noted elsewhere, I’ve bumped the retirement cash up to 15+% as I prepare for significant need for cash late summer. Rather pissed at Fido.
If you've got at least $10K in cash in your IRA, you can open up a position in FZDXX ($10K min for retirement accounts). It's currently paying 5.15%. Fidelity officially requires one to maintain at least $10K in the fund, but generally it is quite forgiving so long as you don't bring the balance down to zero.
This is not a core fund, so any time you have cash in the IRA (e.g. non-reinvested divs), you'll have to move it to FDRXX yourself or the cash will sit in your "Cash, Held in Money Market" fund.
To answer the original question: click on the cash link as described above. You may see a "Change Core Position" button if other options are available.

Regarding Fidelity cash management - it will shortly be adding SPAXX (current SEC yield is 4.97%) as a core account option to its CMA account. Currently you're limited to a bank sweep paying 2.69% APR (2.72% APY).
Duh. I didn’t realize that. I just figured the Cash Management account paid normal money market rates (around 5%.) If what @msf said is true (I believe so) I’ve been duped because I typically keep well north of 10K in the CMA. It comes in as an automatic monthly transfer from my local bank and serves budgeting needs.
Thanks @msf for the timely links. I’ll wait until june 15 and take advantage of the new SPAXX option. Better late than never I suppose.
It pays to read everything @msf posts. He must eat, breathe and sleep investing! (Even better than AI) :)
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