@carew388: are you batting .388 on your stock and fund picks?
I can see playing the materials/natural resources sector by using one of my old favorites, FIW. It’s performance has been outstanding for the past 5 years and it does not have the volatility of other natural resources such as fossil fuels or lumber. It holds some great growth companies like Danaher and Ecolab and is light on international holdings. I think water is likely to be inflation-proof or even a beneficiary of rising rates.

Crazy ...keep gambling or keep day job
Dogecoin up 12,000% since January — here’s how much money you’d have if you invested $1,000 at the beginning of 2021
https://www.cnbc.com/2021/05/05/how-much-a-1000-dollar-investment-in-dogecoin-is-worth.html

Interesting discussions and part of the topic of my next article on MFO. It is about a tactical approach to a portion of a portfolio. The bulk of my investments are in buy and hold mixed asset funds, and I am setting aside a portion for tactical funds which still focuses on lower risk funds. For inflation. I bought the Vanguard commodity fund VCMDX and EAPCX, and the Fidelity real return fund FSRRX, and inflation protected bonds.
I am watching natural resource fund GUNR, and agriculture commodity fund DBA. Another idea is infrastructure fund NFRA. I also own gold equity stock. I have real estate funds, and they tanked with the threat of higher rates. Caution is justified.
Stocks do better than bonds with inflation, but valuations fall, and with valuations so high, I am looking more to value and international funds.
There are some great ideas in this discussion and I will check them out. I am considering setting tactical allocations at 25% of the portfolio, but not necessarily inflation hedges. High debt and aging demographics are deflationary. I expect increasing inflation in the short run, but will limit exposure to commodities.
Thanks for the ideas.

I Bonds are a great "safe" bond option in the current environment.
The $10k annual purchase limit* may be a hindrance for those with larger portfolios.
*additional $5k purchase available using your federal income tax refund

Quick note:
iBonds issued between May 1st and thru Oct of this year pay a combined rate (fixed and inflation) of 3.54%
Exempt from state income tax, $10k annual purchase limit
Probably a decent place to hedge inflation and earn a higher interest rate than in a money market, tbill, and likely most bond funds(?)
Best,
Baseball Fan

Yellen’s comment must have served to strengthen the Dollar on the currency exchanges, Most everything I own tied to non-dollar assets took a hit. Just by way of example: Miners lost 1.15% across the board. OPGSX, PRELX and RPGAX among my worst performers.
Yellen has also received some derision among the financial pundits. Quoth one: “Talk is cheap.”

I have been on the sidelines 90% or more for 51 weeks now, alas, alas, but on a recent dip just stuck 20% into VONV, fwiw

I too like INFL. While it has a chunk of energy ( 20%) and gold, the other thesis is to concentrate on companies that have less exposure to rising prices of their input materials, but are "asset lite" figuring they will not be forced to raise prices as their input prices rise.
One of the reasons for INFL's performance thus far is it's biggest position, Texas Pacific Land, which is up 120% YTD. TPL is the largest landowner in Texas, owning mostly arid oil and gas land in West Texas and fracking resources.
It restructured as C-corporation in January, from a Trust, which may account for some of the rise in the stock price, as there is now no K-1. Horizon Kinetics who runs INFL has a long discussion about this and the trust on their web page. They are very bullish ( some of their funds are 50% TPL) and although TPL is into fracking and oil, it is even in several ESG funds.
I don't own a lot but wish I had bought more.

Consider INFL ETF. It seems to follow a similar track to PRAFX, but since inception 1/11/21 to 5/3 it has come out ahead, INFL up 17.38%, to PRAFX up 13.34%.

@hank : You said, " On a sharp equity selloff, I’d probably cut that back a couple %." With -1 on the short side of equity that should be a positive. Presuming the shorts & longs cancel out .
Just wondering, Derf

@Derf - Inquiring minds like to wonder … You are correct that the fund is pretty much neutral as far as equity exposure goes. The NASDAQ got whacked today. I’ll guess that’s mainly what the fund is shorting. So don’t be surprised to see it gain a bit today.
What I meant was that if equities sold off sharply, I’d sell a couple percent of TMSRX and buy something more invested in equities - maybe add to PRSIX which has an ER about half of what TMSRX charges. TMSRX is 1 of 3 funds in my alternative camp. Combined they amount to 32% of holdings. Maybe drop it to 30%. We’re not taking about BIG moves here.
-

Lately, I notice that PRSNX has grown a small "short" position that wasn't there, before. (Morningstar's X-Ray.) Falling dollar, I suspect, is what's going on, in that case.

@Crash - Here’s the Lipper breakdown on PRSNX
-13% Cash
111% Bonds
2% Other
0% Stocks
Total Net Assets $1.50B
Total Stock Holdings 1
Total Bond Holdings 560
% Foreign Stocks 0%
Portfolio Turnover Rate 144%
It’s not at all unusual for bond funds to hold short positions. Sometimes they’ll short the 30 year Treasury Bond. By doing so, they hedge losses in their shorter duration bonds when rates tick upward. Pretty sure DODIX has done that in the past. However, the short on a 30 year bond would only amount to a few percent.

LOL (click here)
Markets reacted to the non-sensical statement, so am posting it. What in h*** Yellen is trying to achieve with a statement like that escapes me, unless Powell asked her to sow the seeds of rising rates in investors’ minds prior to the Fed moving.

:) Thanks for chiming in guys.
@MikeM - My less than expert take is that a lot of the cash / bond position is actually held in “reserve” to back the short positions. And that that method of displaying is to comport with SEC disclosure rules.
As Mark implies, I think, funds that play in derivatives can post some pretty weird numbers. One commodities fund I once owned would typically display about 150% cash and bonds. Consider that your fund manager has no way to store crude oil or pork bellies. So the “commodity” exposure in commodity funds is achieved with smoke and mirrors (derivatives).
If I can find another fund with weird numbers like that, I’ll post it here.
My take on owning TMSRX - “Making the best of a bad situation”. That’s because of the super low prevailing interest rates along with what appear to me to be overvalued equity markets. So, by default, TMSRX has just north of 12% of my retirement assets. On a sharp equity selloff, I’d probably cut that back a couple %. With funds like that it boils down to a matter of trust in the fund’s operator not to gamble with your money.

@MikeM - maybe this will help you out. Or not.
Derivitives in mutual funds

Hi @hank. I assume the accumulative short and long positions in equity sum to -1%, but how can the bond/cash/other percentages be correct if it uses the 35 stock positions as a total of -1% ? Very confusing. Seems equity positions, regardless of being short or long, would be some greater percentage than -1% which in turn would reduce the given % for bond, cash and other. given above.
Very confusing to understand the break down of distribution. Or am I missing something?

With valuations in everything so high, over 20% of the SP500 in 5 stocks, margin debt at record levels and volatility falling, I am sitting on the sidelines. Once the FED just "mentions" tapering, there will be a significant correction. I am not sure even then I will jump.

Yes, the investor share at 1.22% is not cheap, but other alternative funds could cost even more. Don't recall that the fund ever took aggressive short equity position greater than 5%. Nevertheless 2020 drawdown was -8%, whereas Vanguard balanced index was down 2x as much. The fund did well by year end. The 100% turnover indicated very active trading of the positions in the fund. These days AI or machine learning algorithms is used in these type of funds.
BTW, I also invested in it too since the inception. It will be interesting to see how this fund held up today as the market pullback.

Annual ER:

Lipper Holdings for TMSRX
-1% Stocks
68% Bonds
30% Cash
3% Other
KEY STATISTICS
Total Net Assets $205.82M
Total Stock Holdings 35
Total Bond Holdings 141
% Foreign Stocks 8%
Portfolio Turnover Rate 100%
It’s hard to get a grasp on the inner workings of “alternative” (sometimes called black-box) funds. Actually, the layout above copied from Lipper is clearer than for many. Note the 1% (negative) holdings in equities (short position).
Just wanted to share. I do own it. My bigger gripe is the near 1.3% ER. However, that’s in line with similar funds, actually on the low end. Obviously, the managers aren’t “high” on prospects for stocks at current valuations.
my guess - The fund is long some stocks and short some others in roughly equal amounts. Net-net it’s 1% negative stocks. What about all that cash? Likely that’s to cover the short equity positions. Another oddity is that everything appears to equal about 100%. Funds that short equities and play in derivatives often have large cash / bond positions which laid out on paper display a total invested amount of 120% or greater / ISTM.

… just asking what % would most seem apropos, is it 10%, 15% etc.”
For many years I kept 10% in my “real assets” sleeve - which always included a commodity & real estate fund - and occassionally a mining fund. I kept another 10% in international bonds which might shelter against inflation too - and rebalanced back and forth between the two.
For many years I lost $$ on the commodities part as they went through a brutal decade+ long bear market. A year ago may have seen rock-bottom when they were literally giving oil away on the futures markets - hard as it is to believe. The real estate and gold funds did better over that time - helped along with some tactical buying and selling. But commodities stunk.
Growing more conservative with age, I’ve curtailed the real assets sleeve to 8%. Most risk assets have been curtailed. Not what my instincts would prefer. But I have no control over the aging process.
The above doesn’t take into consideration a roughly 10% hold in PRPFX - which spreads the money all around - and includes gold, silver, natural resources & real estate. It runs hot and cold, so I’d be loath to recommend it to someone today after a nice streak.