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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.
  • Money Market Rates - interesting again?
    One can't always believe what one reads. Especially from tertiary sources.
    Investopedia writes:
    Not every security will have the same settlement periods. All stocks are T+2, and mutual funds differ but are T+1 and T+2, depending on the fund. However, bonds and some money market funds will vary between T+1, T+2, and T+3.
    ...
    Correction—May 5, 2022: This article previously contained an error regarding the settlement date timeline for mutual funds.
    Fidelity also has apparent inconsistencies. Contrast the MMF prospectus excerpt Yogi provided with this writing in Fidelity's help section (bold in original): "How long does it take for a mutual fund trade to settle? ... Sells and buys of money market funds settle the same day"
    Investopedia is right on one point - settlement times of MMFs vary. Some MMFs settle T+1 and some settle T+0. Read their SEC filings. Examples of T+0 funds are the institutional shares of Blackrock MMFs.
    In their prospectus, the purchase and sale section of each fund reads in part: "To purchase or sell shares of the Fund, purchase orders and redemption orders must be transmitted to the Fund’s office ... You have until the close of the federal funds wire (normally 6:45 p.m. Eastern time) to get your purchase money in to the Fund."
    They really do settle same day. I've owned at least one of them. You can trade them through Merrill.
    One can infer from the prospectus that it's not up to the brokerage whether to settle the same day or not. If the brokerage carries the fund it must settle the same day.
  • AAII Sentiment Survey, 6/29/22
    For the week ending on 6/29/22, Sentiment improved a bit but was very negative: Bearish remained the top sentiment (46.7%; very high) & bullish remained the bottom sentiment (22.8%; very low); neutral remained the middle sentiment (30.5%; below average); Bull-Bear Spread was -23.9% (very low; interestingly, it has good correlation with the UM Sentiment). Investor concerns included high inflation & supply-chain disruptions; the Fed; market volatility (VIX, VXN, MOVE); Russia-Ukraine war (18+ weeks). For the Survey week (Thursday-Wednesday), stocks were up, bonds up, oil up, gold down, dollar up. #AAII #Sentiment #Markets
    https://ybbpersonalfinance.proboards.com/thread/141/aaii-sentiment-survey-weekly?page=6&scrollTo=689
  • Time to invest in natural gas ?
    @TheShadow : Nice find. Time to check the bill again. Pay-back is a Bitch !
    Thanks, Derf
    Added : After checking bill it shows a PGA Purchased gas adjustment.
    130.3 therms @ $0.36240 Base
    130.3 '' @ $0.23650 PGA 7/28 days
    130.3 '' @ $0.32890 PGA 21/28 days
    FEB . billing
    Wouldn't gas distribution company have contract with their supplier . Maybe their suppler has to buy on the spot market ?
    Also note that PGA is on all bills.
    Is it time to own a piece of the suppliers & pay yourself.
  • Time to invest in natural gas ?
    This was from the local Philadelphia news last night about customer's bills:
    https://6abc.com/pgw-weather-normalization-adjustment-bill-surcharge-philadelphia-gas-works/12004300/
    Also, while not rating or recommending this mutual fund, you can play the natural gas angle through Hennessey's Gas Utility Fund (GASFX /HGASX).
  • How a massive refinery shortage is contributing to high gas prices
    Bloomberg provides a reasonably fair summary of the situation. This paragraph summarizes the story: https://www.bloomberg.com/news/articles/2022-06-29/why-is-fuel-so-expensive-it-s-not-just-the-oil-price-quicktake
    “5. Can’t we just make more fuel?
    Swaths of refinery capacity shut down during the pandemic and it’s not easy to bring it back online. The US lost more than 1 million barrels a day of capacity between 2019 and 2022 and the remaining plants were already running close to flat out. Some facilities will never restart, even with profit margins near records. The big, multiyear investments needed for such facilities have become tougher to secure as everyone from policymakers to consumers and financiers eye greener alternatives.”
    Counterpoint… the lack of investments in refinery’s or drilling is not due to consumer demand or consumer shifts, it’s a current policy issue. It seems to me that the majority of consumers and policy makers are nowhere near consensus on the issue. I’m not certain that policy makers find the high price of gas to be a problem and they likely view it as an excellent opportunity to promote alternatives.
  • Money Market Rates - interesting again?
    I see T+1 settlement for m-mkt funds at Fido & Vanguard, just as at Schwab.
    Fido SPAXX (core/settlement fund) prospectus: "Shares will be sold at the NAV next calculated after an order is received in proper form. Normally, redemptions will be processed by the next business day, but it may take up to seven days to pay the redemption proceeds if making immediate payment would adversely affect a fund." https://fundresearch.fidelity.com/mutual-funds/summary/31617H102
    VG VMFXX (core/settlement fund) prospectus: "If your redemption request is received in good order, we typically expect that redemption proceeds will be paid by a Fund within one business day of the trade date; however, in certain circumstances, investors may experience a longer settlement period at the time of the transaction." https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx#fund-literature
    If some brokers offer T+0 m-mkt fund settlement, that would be good to know.
    Edit/Add: I also know that Fido and Schwab update their websites by 8:30-9:00 pm Central on most days but that doesn't affect their official settlements.
  • Time to invest in natural gas ?
    Natural gas in the US recently was $9/MMBtu (about triple from a year ago) but is multiple times more expensive than that in Europe and Asia. In June, Freeport LNG plant in TX had an explosion and suddenly the US prices collapsed to $6+ (still double from a year ago) - on the fear that very profitable US LNG exports would go down. Yes, volatile it is.
    https://www.cnbc.com/2022/06/14/natural-gas-plummets-as-freeport-delays-facility-restart-following-explosion.html
  • How a massive refinery shortage is contributing to high gas prices
    Price gouging !! I just posted about huge increase in monthly, average, natural gas bill.
    Derf
    Well, you call it price-gouging. But that seems to be popular behavior with every industry these days. -- Airline fares. Agriculture/food. its impossible to go through a burger drive-through without paying +$10/person, for crap 'food' (it may be Solyent Green). My landlord raised the rent 12%. Housing prices are up outrageous sums since the helicopter money was dropped by Jay "Top Gun" Powell.
    The employer I happen to work for has raised its prices on all of its product lines +100% since 2019. --- And we keep having more customers showing up at our door asking for more product.. (i.e. no loss of volumes due to the high prices).
    When everyone is "price-gouging", its not price-gouging. its inflation. Inflation is every where and at every time a monetary phenomenon (M. Friedman). Our govt (including Jay "Monopoly Money" Powell) has done this to us.
    Are you better off now than you were 4 years ago?
  • Fund Allocations (Cumulative)
    Fund Allocations (Cumulative), 5/31/22
    While high market volatility continued, there were very minor changes in fund allocations, so fund investors stayed put. The changes from the last month are for a total OEFs & ETFs AUM of about $30.24 trillion, so +/- 1% change is about +/- $302.4 billion. Also note that these changes are from both fund inflows/outflows & price changes.
    OEFs: Stocks 52.65%, Hybrids 7.22%, Bonds 21.03%, M-Mkt 19.10%
    ETFs: Stocks 81.31%, Hybrids 0.55%, Bonds 18.14%, M-Mkt N/A
    OEFs & ETFs: Stocks 58.89%, Hybrids 5.76%, Bonds 20.40%, M-Mkt 14.95%
    https://ybbpersonalfinance.proboards.com/thread/245/fund-allocations-cumulative-monthly?page=1&scrollTo=688
  • jp morgan hedged equity stategy funds
    I agree that seems like one part of the issue. Another perhaps related part may be the way the put spread collar works.
    Because the three month collars have different start and end months in each of the funds, it's possible for one fund to be in the "protected" area, where market declines don't affect the payoff value, while another fund could have already blown through the protection.
    See diagram below. In this example, where the collar kicks in after a 5% loss at which point it provides 10% loss "insurance". Suppose two months ago the market went up 5%, and in the past month it dropped 10%.
    A collar that started two months ago would be protecting a fund with a net 5% market loss. That is, the collar would just be kicking in now. But a collar that started just one month ago would be half used up. It would be protecting a fund with a net 10% market loss. (5% of that loss would be covered by the higher strike price put option.)
    After another 5% drop in the market, its protection would be used up. At that point, the value of the latter fund would follow the market down, while the former fund would still have some protection.
    image
  • How a massive refinery shortage is contributing to high gas prices
    In addition to high crude oil prices, refining for gasoline is the other bottleneck. Gasoline are produced locally and there are finite number of refinery plants across the nation. To build new ones takes over a decade given the safety requirements.
    https://npr.org/2022/06/26/1107265390/refinery-shortage-high-gas-prices-russia
    They are quite successful at directing the conversation to how hard it is to build new refineries. What is seldom discussed are refinery closures, the yearly gambit with changing the seasonal formulas, and the ever-popular down for maintenance when prices are high.
    https://www.eastbaytimes.com/2022/06/16/california-fuel-prices-set-to-soar-as-refiners-undergo-work/
    Me thinks it would be a simpler task to modernize and upgrade an existing facility than it would be to get permits for new facilities.
    Nearly everyone is a NIMBY when it comes to refineries. They have to be built where pipelines or tankers can get to them. In the latter case, new refineries tend to spoil waterfront views that are now typically expensive real estate. Whereas people living near existing refineries would be tickled pink if they were upgrading safety along with capacity.
  • How a massive refinery shortage is contributing to high gas prices
    In addition to high crude oil prices, refining for gasoline is the other bottleneck. Gasoline are produced locally and there are finite number of refinery plants across the nation. To build new ones takes over a decade given the safety requirements.
    https://npr.org/2022/06/26/1107265390/refinery-shortage-high-gas-prices-russia
  • jp morgan hedged equity stategy funds
    the original jhqax fund is only down 9.72% ytd. but the new jhdax fund is down 12.35 ytd and the new jhtax fund is down 14.85% ytd. i would appreciate it if someone could explain the reason the 2 new funds are down so much more than jhqax. im fortunate that i have a position in jhqax.
  • Money Market Rates - interesting again?
    What @larryB, @sma3 and I are seeing from SWVXX click within Schwab a/c is the following screenshot. It clearly says 0.60% as 7-day yield and that is WRONG, it is the distribution yield as seen in the following table of monthly distributions annualized using the main website data (that also shows CORRECT 7-day yield as 1.19%). So, it is BAD/WRONG presentation, NOT that Schwab is stiffing us for pennies. @msf makes a good point about rapid nonlinear rise in m-mkt rates.
    2/15/22 0.0278%
    3/15/22 0.0278%
    4/15/22 0.0712%
    5/15/22 0.2646%
    6/15/22 0.6014%
    image
  • Money Market Rates - interesting again?
    While I a not sure I believe them, Schwab chat claims with fed reserve raising rates, next months payout will be close to 1.19%. The "waivers' apply to individual investors also he says.
    That sounds more or less correct. As with MMFs generally, SWVXX declares dividends daily and distributes monthly. So the distribution on June 15th (this fund makes distributions in mid-month) includes the interest declared on May 16th, May 17th, May 18th, ..., June 14th.
    The 0.000501157 per dollar invested that was paid on June 15th, which as @sma3 calculated comes to about 0.6%/year, is really the average of rates on each of these days.
    https://www.schwabassetmanagement.com/products/swvxx (see distributions)
    Rates have been increasing nonlinearly over the past three months. One expects that to continue for some time. The SEC rate quoted is the average of the interest declared over the past seven calendar days, annualized. That means interest declared June 21, June 22, ..., June 27th.
    The midpoint of the days used to calculate the SEC yield of 1.19% is June 24th. The midpoint of the days for which interest was just paid (0.6% annualized) was May 31st. That's a difference of 3.5 weeks!
    Both rates are correct. One just needs to be precise as to what "rate" means. The 0.6% rate is the rate of interest earned between May 16th and June 14th. The 1.19% is the rate of interest earned between June 21 and June 27.
    If one extrapolates, the next payment, about July 15th, should be higher than 1.19%. That's because it will include interest earned June 15 - June 20 (6 days paying less than 1.19%), interest earned June 21-27 (7 days paying 1.19% average), and interest earned for about 17 days after that (paying more than 1.19%).
    17 days at rates higher than 1.19%, 7 days at 1.19% (average), and 6 days at lower rates. That should wind up averaging more than 1.19%.
    There is a 0.01% waiver in effect. So the annual yield without waiver would be about one basis point lower.
  • Dividend ETF's
    Yes, 3-5 year look-backs make more sense and are a more reliable indicator than 1 year. I too observe those statistics which @KHaw24 mentioned. As for dividends, well... I've begun to grow a sleeve of single-stocks which pay divvies. Of course, my big slug in FINANCIALS in PRISX will pay, but I won't see that until December. In the current stinky market, dividend payers have the advantage of "paying you" while we all wait for better conditions. My BHB Bar Harbor Bank pays quarterly, so that's the exception for me. My TRP Equity Income PRFDX does not yield as much as the ones you listed. @Bobpa
  • Dividend ETF's
    It's really not apples to apples compariosn to compare funds on a 1 yr basis. It's one the performance categories bit probably way down my list of importance. In simple terms, a lot of the 'top performers' on 1 year performance basis are in the same categories that held up diring the first half of 2022...Energy, Dividend paying funds, Large Cap Value etc...
    I prefer 3 and 5 year numbers personally, especially returns vs category! I also look at Upside/Downside on 3 and 5yrs, SD, Beta, Yield (if any), Sector Allocation (usually a good indicator of the source of the outperformance), Concentration ...
    As far as your hoices mentioned, I own SCHD as well so I'm not sure if you are asking to add another 'Value/Dividend ETF' in addition to that one?