Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

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.
  • Pimco Income Fund – Distribution Update -- PIMIX
    Another sign of the times (where to hide?).
    Effective August 3rd, 2020, the PIMCO Income Fund (the “Fund”) is making a change to its daily distribution rate. Over the course of the month this change will lead to a monthly distribution rate change from $0.0555/share to $0.0400/share (Institutional Class).1
    The recent sudden drop in yields across fixed income markets has left investors around the world
    searching for yield.
    We recognize the importance of income to our investors, but we also aim to balance this with the
    desire to preserve capital. In this environment, we believe it is critical to seek to generate income in a
    diversified and prudent manner
    https://documents.pimco.com/Viewer/GetFile.aspx?Id=nHUY2SUo9QOxF3VWEzGBYoDrLWRlnZLA5zHxp1cfhF99lmPE3dql3s4MG01b7orgpuKsxaOYW9k%2BvPlglzR9q8crYaDxCBk5G6m5o3k8L6ABM9YHRWZSkC36DoaNYIUORHRsHGxzcH9IpEPtCwo1FXQLZJNS719ScVKY0K4Jxn9KA1WdYUVMKlzM7X69N1UGLeQvdH6mP1SUn3R8GCG0hsjSotDrjdpz1YkguqOasY8%3D
  • COVID-onomics: Should You Invest in Biotech Stocks Now?
    https://www.medscape.com/viewarticle/935875
    COVID-onomics: Should You Invest in Biotech Stocks Now?
    Dennis Murray
    August 18, 202
    Many physicians are looking for ways to replace lost income and save for the future. At the same time, partly as a result of the COVID-19 pandemic, developments in technology and biotechnology, including potential vaccines and treatments, have prompted many to consider biotech as having sound possibilities for successful investing.
    https://www.google.com/amp/s/investmentu.com/invest-covid-19-stocks-biotech/?amp
    Could be a long way to go before heading down
  • If history repeats, the stock market will hit a new high by the end of August
    https://www.marketwatch.com/story/if-stock-market-history-repeats-the-s-p-500-will-close-at-a-new-high-by-the-end-of-august-11597676415
    If history repeats, the stock market will hit a new high by the end of August
    By William Watts
    S&P 500, on average, has made new highs 8 days after closing within 1% of record, CFRA’s Stovall says
    So much exuberant out there...any chance double dip or large corrections beforeelection?!...
  • BONDS AAA, a bit twitchy this past week; Update AUG 28
    Hi guys,
    My income sleeve made a little money yesterday (8/17) being up +0.08% but is down -0.17% for the rolling five day period. I had one fund that was down and that was Pimco Income with the others being flat to up for the day. For the day the portfolio as a whole was up +0.30% while the S&P 500 Index was up +0.27% and for the rolling five day period the portfolio is up +0.49%. And, do +0.49% every week and that equates to a little better than +25% for a 52 week period or a little better than +2% per month. Based upon my asset allocation currently of 15/45/40 (Cash/Bonds/Stocks) I'm only looking for an average annual return, from my funds, in the 6% to 8% range. So, overall yesterday, on average, was better than a normal day for me. Currently, my ten year annual average total return is +9.86% which includes profits made from my equity spiff positions. So, buying the dips and selling the rips through special investment positions, from time to time, has added alpha to my overall portfolio returns.
    Thus, I plan to keep on using Old_Skeet's Market Barometer which drives a suggested equity weighting for me within my asset allocation. With stock market valuations being scored as elevated, by the barometer, this suggested weighting is currently 40% for my stock allocation, which I am presently at.
    I wish all ... "Good Investing."
    Old_Skeet
  • Foreign frontier funds
    These days, investing directly in foreign stocks sold on foreign exchanges is pretty easy. I'm guessing that's what you've been doing. Investing in offshore funds is more difficult.
    Several years ago, I looked briefly into making use of a dual citizenship to invest in offshore funds. My reason then was to gain access to funds investing in regions beyond what US-based vehicles offered at the time. Reminding you that this was just a cursory look, what I found was that the loads and higher fees didn't make it worth investigating further at the time.
    Now, if your interest is in Africa ex-SA with a focus on sub-Saharan countries (a la African Lions), there's an ETF traded on JSE, The AMI Big50 ex-SA ETF. Not a recommendation, just an observation that you don't have to go the overseas OEF route.
    If your concern is rapid devaluation of the dollar, keep in mind that most US-based foreign equity funds are unhedged. If your concern is truly a substantial collapse of the US monetary system, then I expect most people here would disagree with the idea that in that event, other parts of the world will do fine.
    Sovereign Man confuses empires with the nation states that arose in the past two centuries, notably after WWI. If the US is indeed an "empire" as asserted, then its scope is worldwide, and we should expect a dark age of global proportion when this "empire" collapses.
    As you observed, taxation needs to be handled carefully. Note that even if one elects to treat the PFIC as a QEF, dividends are taxed as ordinary income, not as qualified divs.
    Regarding the funds you're looking at - they carry restrictions somewhat analogous to those of private placements in the US. The are sold only to the equivalent of accredited or sophisticated investors (i.e. based on your assets/income and/or demonstrable investment experience), and generally not offered publicly. Even if you circumvent these restrictions, it's worth keeping in mind that they're there for a reason. As you noted honestly, this is not your forte.
    Here are a couple of excerpts:
    (African Lions Fund):
    This Website has been set up in connection with the private offering and sale of the shares of AFRICAN LIONS FUND ...
    As a Private Fund the Fund is suitable for private investors only and any invitation to subscribe for fund interests may be made on a private basis only. ...
    the requirements considered necessary for the protection of investors that apply to public funds in the BVI [British Virgin Islands] do not apply to private funds. An investment in a private fund may present a greater risk to an investor than an investment in a public fund in the BVI. Each prospective investor is solely responsible for determining whether the Fund is suitable for its investment needs.
    (Sturgeon Capital)
    [T]here shall [not] be any sale of any investments or commitments in connection with this website in any jurisdiction in which such offer, solicitation, or sale would be unlawful, including the United Kingdom and the United States.
    ...
    The regulated services provided by Sturgeon Capital are only accessible to Eligible Counterparties or Professional clients as defined in COBS 3.5 & COBS 3.6 or in the case of Fund investors COBS 4.12 of the Financial Conduct Authority handbook. ... the same levels of protection afforded to Retail Clients would not be available to prospective clients of the firm.
  • TDAmeritrade woes and recommendations for alternatives

    So TDAmeritrade's ThinkorSwim platform (and maybe others) have been mostly offline since 925ET this morning following last night's update. TDA has acknowledged the problem but it's becoming a s---tshow over there with their messaging (er, lack of it) ... the easiest thing would be to roll back the update, but they've chose not to, and thus many folks are unable to trade.
    TDA's been fairly solid for me since 2007 .... but I'm flashing back to the dark days of 2012-14 when every update would cause havoc and break things. Schwab's gotta be livid since they just announced TD's active platform ThinkorSwim would be their platform going forward, too.
    Anyway, I'm curious folks' thoughts on E-Trade or Fido as a possible all-in-one non-wirehouse brokerage replacment for TDA/Schwab for stocks/options/futures/OEFs.
  • Berkshire Makes a Bet on Gold Market That Buffett Once Mocked
    “Warren Buffett’s Berkshire Hathaway Inc. added Barrick Gold Corp. to its portfolio in the second quarter, sending shares of the world’s second-largest miner of the metal surging.”
    According to the above excerpt from John’s article, the purchase was sometime in the second quarter (April-June). Not necessarily all at one time. Might have caused an upward tic in Barrack at the time. More likely, the real impact will be on the retail investor crowd (you and me) now that the purchase was disclosed. I dunno. I can see a big run-up towards the election. But the big players can “pull the plug” anytime and send prices reeling - at least for shorter periods as they did recently.
    Folks will recall the March 7-15 period where gold and miners fell through the floorboards dropping 20% or more in a few days. I’m not sure when the recovery in (gold and miners) price started, but would guess sometime late in the first quarter (before WB apparently bought in). Note that he bought Barrick mining - not bullion - big difference.
    BTW - miners up 5% today at last look.
  • The rise of the upper middle class
    Decline of the middle class, or a skewing within the middle class?
    1967: 84% middle class
    2016: 85% middle class
    The working class is another story. As the WaPo concluded: "Falling behind is the lower middle class, once called the working class."
  • Vanguard Energy Fund changes
    https://www.sec.gov/Archives/edgar/data/734383/000168386320012536/f6661d1.htm
    497 1 f6661d1.htm VANGUARD ENERGY FUND 497
    Vanguard Energy Fund
    Supplement Dated August 17, 2020, to the Prospectus and Summary Prospectus Dated May 29, 2020
    The board of trustees of Vanguard Specialized Funds (the “Board”) approved restructuring of the investment advisory team of Vanguard Energy Fund (the “Fund”), removing The Vanguard Group, Inc.'s Quantitative Equity Group (“QEG”) as an investment advisor to the Fund. Wellington Management Company LLP (“Wellington”) will serve as the Fund’s sole advisor. All references to QEG, and all other details and descriptions regarding QEG's management of certain assets of the Fund in the Prospectus and Summary Prospectus are deleted in their entirety.
    The change in the Fund's investment advisory arrangement is expected to change the Fund's expense ratios to 0.33% for Investor Shares and 0.25% for Admiral™ Shares.
    Additionally, in the fourth quarter of 2020, the Fund will change its primary benchmark to a custom market-cap weighted blend of the MSCI ACWI Energy Index and the MSCI ACWI Utilities Index to better reflect how Wellington intends to position the Fund within the energy industry (as currently described in the Prospectus and Summary Prospectus).
    Prospectus and Summary Prospectus Text Changes
    The following replaces a similar table under the heading “Fees and Expenses” in the Fund Summary section:
    Annual Fund Operating Expenses
    (Expenses that you pay each year as a percentage of the value of your investment)... (see link for table)
  • ? DSENX-DSEEX a little help please if you can
    The other good thing for ETFs, in my mind, is you can place a trailing stop order. Like @carew388 I'm also skeptical of this market, especially going into the typical September swoon not to mention what will for sure be a tumultuous election process.
    I did this recently with QQQ. I sold a chunk of AKREX and put it into QQQ with a trailing stop of 5%. It's almost close to where if the order kicks in I would break even. I just don't want to ride all my equity money down 10, 15, 20% in another free-fall.
  • Leuthold, echoing everyone I've interviewed
    @David_Snowball
    Hi David- it looks like the situation in Iowa is finally getting a bit of attention. This, from NPR:

    'The Devastation Is Widespread.' Iowans Continue To Struggle Following Deadly Derecho
    Thousands of Iowans are still coping with the aftermath of a storm that pummeled the state last Monday with 100-mile-per-hour winds — a storm that flattened corn and soybean crops, damaged grain elevators and leveled banks, churches and homes.
    More than 158,000 Iowans were still without power as of Friday evening, according to Iowa Public Radio. By Sunday morning, more than 98,000 continued to lack power, according to the monitoring site PowerOutage.US.
    "The devastation is widespread. It's intense. Block after block of houses, every one with some amount of damage. Trees piled 6 to 10 feet high along the road. It's like walking through a tunnel of green with some fluorescent orange of placard houses that are unsafe to enter," Tyler Olson, a city council member from Cedar Rapids, told NPR's Weekend Edition on Saturday. "The city itself has been working hard to get roads cleared, so that has taken place in many parts of the city. But we're still without power. The majority of our citizens are without power."
    The storm system that flattened crops and toppled trees is called a derecho, a particularly damaging and severe kind of wind storm that can cause hurricane-force winds, tornadoes and heavy rains. As many as 14 million acres of farmland were damaged by the storm, The New York Times reported.
    "It's by far the most extensive and widespread damage that we've seen on this farm," Aaron Lehman, who grows corn and soybeans in Polk County in central Iowa, told Harvest Public Media. Lehman, who serves as president of the Iowa Farmers Union, said the damage was worse than a typical tornado.
    "Unlike a tornado, which is a mile wide, this stretched for a width of really intense damage — of approximately 40 miles, probably closer to 60-70 miles wide," he said.
    In Cedar Rapids, some families were left living in tents. At one badly damaged apartment complex, displaced children played outside amid shredded shingles, rusting nails and the chunks of fiberglass insulation, Iowa Public Radio reported.
    "I didn't hear no sirens until our electricity went off. And then we went out and looked out the window and then it just all happened," said 14-year-old Lenberg Phillip in an interview with Iowa Public radio. "We were just watching out the window and then minutes later the roof came off."
    Olson says they're still hoping to get a presidential disaster declaration.
    "We need electricity," Olson said. "The [Iowa] National Guard arrived a couple of days ago to assist with utility with power back on, but we have citizens without food, without medicine. And we're working as hard as we can as a city to meet those needs but we really need the federal government and their resources."
    President Donald Trump has not signed an emergency declaration yet. On Tuesday, he tweeted: "Sad to see the damage from the derecho in Midwest. 112 mile per hour winds in Midway, Iowa! The Federal government is in close coordination with State officials. We are with you all the way - Stay safe and strong!"
    At a press conference in Cedar Rapids on Friday, Republican Gov. Kim Reynolds said the soonest she'd be able to submit an application for a disaster declaration is on Monday, according to Iowa Public Radio.
    "We're moving forward, we're coordinating efforts, we're working with the local emergency managers and working with city officials and the mayor," Reynolds said. "They're on the ground. They need to let us know how we can supplement and help them with the work that they're doing and that's how we can efficiently and effectively serve citizens."
    This all comes as Iowa continues to battle the COVID-19 pandemic. While the rate of infections appears to be decreasing, now averaging 458 new cases a week with more than 52,000 cases and 975 deaths, experts are worried about how the state will be able to handle two disasters at once.
    "[The pandemic] has complicated relief efforts," Olson said. "It's hard to gather people together. It's hard for repair companies, insurance adjusters, to go into homes. Obviously protections that are in place because of the pandemic. And it really, the city's resources were strained before in trying to deal with that and now we're dealing with this probably historic disaster."
    We surely hope that things are improving for you folks .
    Regards- OJ
  • BONDS AAA, a bit twitchy this past week; Update AUG 28
    @Catch22,
    Thanks for the update on bonds.
    I appreciate this very much as I am more of an equity guy; but, I do pay attention to the price movement of my income sleeve which is made up of bond and multi sector income funds. For the week it was down -0.24%, for the month it is up +2.49% and for the past 90 days it is up +8.53%.
    Following the March/April stock market swoon my income sleeve has performed well, as it also took a hit with my equities, and it is now back to a little above even. Overall, though, my portfolio is up year to date due mostly to my growth funds as my value funds still lag both my income and growth funds. But, I'm seeing my value funds now starting to find some traction as they were the better performers this past week.
    Perhaps, a rotation it taking place where some investors are repositioning and moving from overvalued to undervalued funds within their portfolios. Anyway, value was on the move last week as my domestic equity income sleeve was up +0.81% for the week, +4.30% for the month and +11.95% for the past 90 days. My global equity income sleeve has been on the move as well with a weekly gain of +0.90%, +3.39% for the past month, and +18.51% for it's three month period. Hopefully, this will continue and close the distance between my value and my growth funds which have had the better performance thus far this year.
    Take care ... stay safe ... and, thanks for the update on bonds.
    Old_Skeet
  • BONDS AAA, a bit twitchy this past week; Update AUG 28
    The week was rough for U.S. bond performance. However, the bond and equity markets remain, somewhat, within the functions of the central bank. Barring economic reports near term that are beyond belief to the positive side, I expect enough bond buying (in spite of issuance amounts) support to recover this weeks reversal in positive price trends. Looking at some of the YTD returns at this point of the year; one can't complain too much, eh? I've placed links below that won't take much of your time, related to bonds.
    Currently, I glance at data for , but do not track muni's, mortgage or foreign bonds.
    A few data views from bondland, for mostly AAA rated bonds:
    AUGUST 14 WEEK / YTD
    --- MINT = + .02% / +1.2% (Pimco Enhanced short maturity, AAA-BBB rated)
    --- SHY = - .07% / +3.0% (UST 1-3 yr bills)
    --- IEI = - .31% /+6.9% (UST 3-7 yr notes/bonds)
    --- IEF = -.9% /+11% (UST 7-10 yr bonds)
    --- TIP = -.7% / +8% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
    --- LTPZ = -3.2% / + 19.7% (UST, long duration TIPs bonds
    --- TLT = -3.9% /+21.6% (20+ Yr UST Bond
    --- EDV = -5.4% / +28.3% (UST Vanguard extended duration bonds)
    --- ZROZ = -6.1% /+29.8% (UST., AAA, long duration zero coupon bonds)
    ***Other, for reference, not AAA rated:
    --- HYG = -1.3 / -1.4% (high yield bonds, proxy ETF)
    --- LQD = -2.4% / +7.7% (corp. bonds, various quality)
    Priya Misra, Aug. 12, 3 minute video, bonds, yields and the FED.
    Jim Bianco Aug 14, 6 minute video, bonds and broad markets overview
    Scott Minerd, short text read, 30 year bond buying opportunity after sell-off
    As always, you'll have to be the final judge for the health of your portfolio mix using bonds.
    Take care,
    Catch
  • Municipal Bond Investing In The COVID-19 Era
    Here is my problem with this article
    1) I appreciate his explanation but I don't think an average and above investor should buy single bond. I'm mainly a bond investor and always bought mutual funds. It's easy, cheaper and I can switch any time.
    2) Munis is one of my biggest category sometimes a huge % like now. The chance I will invest in the article choices are slim. I like HY Munis. A 5 year chart (link) is all you need. BTW, I sold all my munis at the end of 02/2020 and started buying on 04/2020.
  • Vanguard pushing for "non-diversified"
    Here's the prospectus supplement announcing the change from diversified to non-diversified (and the vote required). The funds affected are "Vanguard U.S. Growth Fund, Vanguard Health Care Fund, Vanguard Energy Fund, VVIF – Growth Portfolio, and VVIF – Real Estate Index Portfolio "
    https://www.sec.gov/Archives/edgar/data/52848/000168386320012214/f6514d1.htm
    IMHO it's reasonable if not expected for sector funds to be non-diversified since they are already focused and they have far fewer securities to select from.
    As to US Growth, ISTM that this change highlights a potential problem with funds that use multiple management firms. While each firm is selected for its style of investing, and they are intended to be complementary, they may overlap on the selection of individual securities.
    Usually, even if each firm's style is focused (e.g. Jackson Square choosing 25-30 securities), a given security a firm selects can't constitute a large part of the whole fund portfolio. But, as alluded to by @WABAC, if there are "obvious" securities such as Amazon that most of the managers would independently select (regardless of investment style), then the fund could wind up holding too much of those securities.
    There are a couple of ways around this. One is to weight each manager's sleeve so that the ones with heavily concentrated portfolios don't have too much influence. The other is to coordinate their sleeves or put caps on how much they can invest in a given security. The latter impedes their style and this is what it sounds like Vanguard is concerned about.
    To get a sense of how three of the management teams function, one can look at PGIM Jennison Growth PJFAX (54 stocks; Amazon, Microsoft, Apple over 5%), Jackson Square-managed DUGAX (26 stocks; Microsoft, Amazon, and Visa over 5%), and Baillie Guifford US Equity Growth BGGSX (42 stocks; Amazon, Shopify, and Tesla over 9½%).
    Combined, these three managers used to control 50% of the fund (with Vanguard Quant and Wellington dividing the rest). After the merger with Vanguard Morgan Growth, they control 58% of the fund. It's gotten hard to keep holdings under 5% without cramping their styles.
    Figuring that this ballot measure is going to pass no matter what all the small investors vote, the more pragmatic question is: do you stay or walk? IMHO these are all fine management companies. But the portfolio holds all the usual suspects in spades. Maybe that's good, if only 5% of companies are worth owning. Or maybe you want to invest in a more wide ranging fund.
  • Gone for good? Evidence signals many jobs aren’t coming back
    Jobs gone forever, yep. I worked over 35 in IT and can tell you that the systems I coded and implemented were faster, better and cheaper than humans. So I knew it's coming in the 80" already.
    These processes got faster and better and why many can't compete and lost their jobs. Add to it globalization and now you can hire cheaper labor in other countries.
    If you are part of STEM(link) you will do OK. Most others may be in trouble.
    The next step is the middle class and up will start losing their jobs too. Think professions such as investment career: thousands got fired, how long can you charge too much about nothing, real estate: commission FINALLY are been cut to 5-4 and now 3% (Redfin will sell your house for just 4% and if you buy thru them will pay you 1%), many other white collar jobs in travel and more will be gone. If you can fix things (Plumbing, AC, vehicles) you will be ok too.
    Basically, the gap will increase and create more problems
    So, if you are crazy about history and go to university, you better pick another major. I gave my kids this option. We will pay for your tuition only if you select one major that we think you have a chance to find a job, and we only pay for 4 year, so you better get serious. My daughter had a hard time, and she selected 3 majors (2 what she wanted and third for her dad) and eventually got PHD in third and loves it now. Now tell me who is your daddy?