Barron’s is exceptional in the latest (Nov.7) issue. Several good articles touch on this overall theme. (And I’ve posted the cover art)
- One writer makes the distinction between “market peaks” and asset “bubbles.” He thinks what we’re witnessing qualifies as the latter (good). When a peak turns into a correction or crash, most everyone gets hit. With bubbles you can move assets out of the overpriced bubble(s) gradually and into more reasonably valued assets (ie: funds, stocks, sectors).
- One article visits a large public Crypto Conference recently staged in NYC’s Times Square. It hones in on a 30 -something aged woman who is amassing a collection of high priced “non-fungable” tokens. These digital certificates give the owner the “exclusive rights” to things like dog photos or images of funny looking hats that are actually free to view on the internet, In other words worthless. She learned how to “invest” on U-Tube and has also taught “investing” to her mother and siblings, who are now investing in these assets.
Enough said.
peace

I agree opt out programs significantly increase participation rates above that of opt in programs. They may be the most effective way of boosting participation. However there is the danger of unintended consequences for lower income workers that tax credits or some other form of subsidy could mitigate.
From the same report, pp. 24-25:

Authorize Automatic IRAs at the Federal Level
...
Advocates of automatic IRA efforts cite that the coverage gap between workers with and without pension coverage will decrease and that increased savings will reduce the burden on future social assistance programs. In addition, some researchers found that automatic IRAs implemented early on in individuals’ careers could increase retirement income for between two-thirds and one-half of individuals in the lowest quarter of the income distribution at age 70.
Others caution that automatically enrolling lower-income individuals into savings plans may have unintended consequences. For example, increased savings could result in decreased standards of living during working years and could result in disqualification from means-tested governments programs (e.g., losing Medicaid eligibility due to mandatory withdrawals in retirement). One study found that automatic enrollment in retirement accounts may cause increases in auto loans and first lien mortgage balances. Another found that automatic enrollment may not necessarily have large impacts on household net worth over time.

"Fifteen percent of households in the labor force without employer-sponsored pensions indicated owning an IRA in 2019."
Congressional Research Service, Individual Retirement Account (IRA) Ownership: Data and Policy Issues, Dec 9, 2020.
https://crsreports.congress.gov/product/pdf/R/R46635/3
So for the vast majority of people without jobs offering 401(k)s or 403(b)s, the size of the IRA contribution limit makes no difference.

A retirement plan for those without access to traditional 401k/403b plans could include an automatic enrollment provision to increase participation rates. Vanguard released a study earlier this year which indicates that participation rates tripled in 401k plans with an automatic enrollment feature.
This can be a very useful "nudge".
PDF

Roth IRA used to have $2,000 limit when it started in 1998. Many people don’t have jobs with 401K) and 403(b) plans. How can one save enough for retirement with $6,000 and 1,000 catch-up, per year?

"Fifteen percent of households in the labor force without employer-sponsored pensions indicated owning an IRA in 2019."
Congressional Research Service, Individual Retirement Account (IRA) Ownership: Data and Policy Issues, Dec 9, 2020.
https://crsreports.congress.gov/product/pdf/R/R46635/3
So for the vast majority of people without jobs offering 401(k)s or 403(b)s, the size of the IRA contribution limit makes no difference.
If the concern is in encouraging the 75% of households (ibid) who do not have any IRAs to save for retirement, I might suggest better publicizing the Savers Credit and making it a refundable credit.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit

Roth IRA used to have $2,000 limit when it started in 1998. Many people don’t have jobs with 401K) and 403(b) plans. How can one save enough for retirement with $6,000 and 1,000 catch-up, per year?

I converted my small Traditional IRA (~ $35K) to a Roth IRA in 1998.
I've been very fortunate that the Roth IRA has increased in value considerably since 1998.
However, the Roth by itself would not provide for a comfortable retirement.
Thankfully, I also have access to 401k and HSA plans.
It would be beneficial to have a retirement plan similar to the Thrift Savings Plan (TSP) universally available for employees without access to traditional 401k/403b plans (often employees at smaller companies).

@lynnbolin2021,
Looking forward to your next MFO article..should be interesting as always....
Curious as to your thoughts for addition in the "all-weather" approach regarding funds such as:
PVCMX Palm Valley Capital Fund. Invests generally in small cap value co's, high quality, strong balance sheets, strong free cash flow, profitable co's. Not afraid to hold cash in market bubbles (whatever that means anymore) Absolute return focused.
TANDX (Castle Tandem Fund) Invests in Large cap, growing dividend payers, that are capable of growing earning regardless of economic conditions, not afraid to hold cash if need be, does not make market call to go to cash, only if can't find the appropriate value in a stock
Trying to look forward as to what may come rather than backwards look at performance, data etc.
Very intrigued by BLNDX/REMIX as mentioned by Prof David, have initiated starter position.
If you would, please define your interpretation of what "all weather" means from your viewpoint.
Is it a marketing term, maybe overused like ESG, maybe nebulous terminology or maybe not?
Mine is of a fund that you could have significant holdings of your wealth and hold thru a 30-40% drawdown in the markets, while sleeping well and having the confidence that the fund mgmt will make the right decisions over the next few years. Also, do like funds that have a succession planning in place...no funds with the boomer aged guru with no protege learning and next in line etc.
I also define as all weather fund as a fund that could compete when compared with a 45% SPY/55 SCHO ETF backwards look performance wise...most can't, no?
Best to all, I enjoy your postings, makes me think...
Baseball Fan

@Derf - It’s in both my Traditional IRA and Roth IRA. Roughly equal amounts. Currently comprises 47% of my 33% weighting to alternatives. That works out to 15.5% of total investments.
More than you wanted to know,. :). Thanks for asking.
For what interest it may hold for others, at 75 I’ve gone largely to a “preservation” approach.
In a nutshell: 30-35% Growth / 30-35% Income / 30-35% Alternatives / 2-5% Speculative

I own it, but have tactically been reducing its proportion in my portfolio. PRDSX. It's my smallest fund holding now. Down to 2% of total. I sense it's lost its mojo. Even though a quant fund is all about statistics and algorithms and such, and not so much about Fund Manager "savvy" and legerdemain. Is the Quant Model they're using not very effective any longer? This is the 2nd year in a row that the fund is a serious laggard vs. peers. (Well, "peers" as categorized by Morningstar.) Longer-term numbers mean much more, of course.
...So, when I see a couple of good up-days, I've been taking tiny bites out of it and putting it into PRSNX, a dollar-hedged TRP bond fund. I want to be growing my bonds, anyhow. And what's with the rather big estimated capital gain in 2021 for PRDSX? ($6.00/share--- if memory serves me.) I'm also thinking I could "afford" to put 6% of my portfolio into TRP Junk Fund TUHYX. Six percent. I would take that 6% from my RPSIX holding. At the moment, RPSIX = 21.95% of portfolio total, and PRSNX = 21.20% of portf. total. The other bond fund is 6.10% of total: PTIAX.

David, thanks for posting your research on REMIX. I compared REMIX to FMSDX, looks good...see https://stockcharts.com/freecharts/perf.php?REMIX,FMSDX&n=455&O=011000
Would love to hear Lynn Bolin's take on this fund as well. I am continuing to look for "defensive" funds that can offer decent returns, and was happy to discover REMIX here.
TIA,
Rick

Hi Rick, After reading David's article, I researched REMIX. It comes close to my minimum criteria of two years of age and $100M in assets. I compared it to other funds that I track. I placed an order to allocate 5% of one of my portfolios to REMIX, and plan to buy a little more. I like its relative smooth performance. It joins CTFAX, CRAAX, FMSDX, FSRRX, and TMSRX, among others, in my attempt to build an "All Weather" portfolio.
This portfolio is the subject of my next MFO article.
Lynn

Thanks for the insight to your planning @bee.
And I like this one :)

...trying to own the very best funds and the very best fund managers.

... aren't we all? Problem in doing so is a new better fund and best manager shows up in cycles. They make interesting topics here at MFO. I'm not as fixated 'anymore' on chasing that ever-changing field. But like you, I am a believer in PRWCX which I believe is now ~ 25% of my total self managed account.

@hank said,

But I’d have more money if I’d sunk 100% in PRWCX 25 years ago and followed with a “RipVanWinkle” act!

I stand at the launch pad of retirement (age 62) thinking that PRWCX, VWINX and a little Cash will provide a safe withdrawal (different than a safe withdrawal rate) in the first ten years of retirement. I am positioning about 1/3 of my portfolio in these two funds (plus 1 year of cash equivalent withdrawals). My hope is to derive both growth and income from these positions.
The remaining 2/3 will hopefully not be needed for 10 years and will be invested for growth (to help fund year 72 - year 92 ). Along the way, I hope to reallocate gains from this long term bucket back into these 2 funds (and replenish cash). I will deal with down markets by withdrawing a little less since I have other reliable monthly income. I am a fan of withdrawing fixed percentages rather than fix dollar amounts and letting the market dictate the ups and downs of the actual dollar amount (withdrawal).
A 4% withdrawal (based on the entire portfolio) from a fund like VWINX which has a MAXXDD of about 10% would mean a withdrawal haircut in a very bad year that equates to 3.6% (10% off of 4%). I can live with that as a number to plan around. I feel VWINX will work well in conjunction with cash (as an alternative withdrawal source) giving VWINX a 1 year recovery time if we have a MAXDD event. PRWCX will remain a 5 - 10 year position that will be milked or kept out to pasture depending on what the market offers. PRWCX's milk will be refrigerated into VWINX and Cash as needed.
Long time (2/3 of my portfolio) I want to invest in trends....healthcare, tech, and consumerism...trying to own the very best funds and the very best fund managers.

David, thanks for posting your research on REMIX. I compared REMIX to FMSDX, looks good...see https://stockcharts.com/freecharts/perf.php?REMIX,FMSDX&n=455&O=011000
Would love to hear Lynn Bolin's take on this fund as well. I am continuing to look for "defensive" funds that can offer decent returns, and was happy to discover REMIX here.
TIA,
Rick

I’ve never seen such heightened speculation across the wide investment spectrum. There’s been spec before - but I fear the new crop of retail investors is unprepared for what may happen. Should we worry? Not a lot. But a good analogy might be driving 70-80 mph on a crowed interstate surrounded by other nearby vehicles operated by drunks or folks who aren’t watching the road. All can seem perfectly “normal” until someone begins swerving out of control and brake lights begin flashing in every direction. In the end, everyone pays for the excesses of a few.
Noteworthy among small retail investors, there’s significant leverage being employed. And there has arisen a plethora self-made internet gurus who amass large followings ready to pounce on their next recommendation - or perhaps sell some hapless stock all on the same day. As the M* piece notes, markets can remain in a state of elevated exuberance for years or even decades. But, if history is a guide, the eventual declines can last for years at a time and be brutally painful.
I can’t recall such wild swings in the value of some assets. Energy stands out to me, with crude oil futures going negative in early 2020 and than rapidly gaining about $140 per barrel to $86 about 15 months later. This leads me to believe there’s a lot of hot money chasing assets. If it’s happening to oil, it’s likely happening to other assets. Can’t even get my head around crypto. But it makes the above mentioned swings in oil meager by comparison. Jamie Dimon, head of J.P. Morgan, is no idiot. His assessment is that Bitcoin is worthless.
There’s notably less public concern today than in the late 90s before the “tech-wreck” which saw the NASDAQ drop about 50% in a matter of days, while dragging down other markets along with it. It was more than a decade before the NASDAQ got back to its 2000:high. Where is Alan Greenspan with his “irrational exuberance” warnings of the late 90s? Or Vanguard with its “Trees don’t grow to the sky” cautionary statement to its investors around than?
What to do? Anybody’s guess. None of us can predict the future. Saying that many assets are in speculative territory does not lead to any particular solution. Some of the answer resides in age, risk tolerance and individual skill-set. Some in ancillary issues like pension, home ownership, dependents, life style. A good portion of the answer, however, resides in one’s macro view of how things will evolve going forward. For example, one view is that asset prices will eventually deflate. Another view says paper currencies will be devalued (thru price inflation) making today’s asset prices reasonable. Politics (often heated) here and abroad, has also become an ingredient to be reckoned with when trying to assess the macro view. And there exists, too, a middle road on which there may be winners and losers. We tend to segregate “investments” into domestic stocks and bonds. Simplistic of course. That overlooks potentially attractive foreign markets. And there are assets like real estate, commodities, infrastructure, floating rate loans, gold and silver; as well as derivatives like puts, calls, options, futures that a skilled professional can use to advantage or to reduce overall risk in heated markets. Funds that lean on such approaches have been highlighted recently in the MFO commentary. While I own some such funds, I don’t find them particularly worthy of note.

https://www.morningstar.com/articles/1065850/investing-when-everything-is-expensive
Borrowed from the Armchair.

NVDA is this mutual funds top holding:
FDGRX
https://morningstar.com/funds/xnas/fdgrx/portfolio
Not a bad short and long term holding:

Nov 6th Episode:

The contribution limit for 401k/403b/457 plans will increase from $19,500 in 2021 to $20,500 in 2022.
The catch-up contribution limit remains $6,500.
Contribution limits and catch-up contribution limits for Traditional/Roth IRAs are unchanged at $6,000 and $1,000 respectively.
HSA contribution limits for single coverage will increase from $3,600 in 2021 to $3,650 in 2022.
HSA contribution limits for family coverage will increase from $7,200 in 2021 to $7,300 in 2022.
The catch-up contribution limit is unchanged at $1,000.
Refer to the article for additional contribution/income limits.
Link

https://www.barrons.com/articles/nvidia-nvda-stock-record-high-metaverse-51636044280
Nvidia Stock Tops $750 Billion Market Cap. This Analyst Sees Giant Metaverse Opportunities.
Updated Nov. 4, 2021 4:12 pm ET / Original Nov. 4, 2021 2:47 pm ET
Nvidia stock surged to a record in Thursday trading after analysts at Wells Fargo raised their price target by about 30%, saying the videogame- chip powerhouse was well positioned to help build the metaverse.
Meta
Nvda
One Trillion dollars industry soon!!??
? Next Apple Google 15 20 yrs ago??
Can read whole article incognito

The Bank of America has now joined the “dead for the long term” party. They now project that the S&P 500 will return somewhere between zero and a bit below zero annually for they next ten years. That’s perfectly in line with Research Affiliates’ projection of a negative 0.5% annual return for the broad US stock market and wildly more optimistic than GMO’s regression-driven estimate of negative 7% annual returns for the next seven years.
Brings to mind “If a tree falls in the forest ...” :)
Regards