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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.
  • When a 59% Annual Return Just Isn’t Enough - Jason Zweig
    Got curious and found a report by Natixis about the survey. The optimism is global:
    US investors may have the highest long-term return expectations at 17.5%, but the 161% gap with the professionals’ call for returns of 6.7% looks better than what’s expected in other countries. The 157% gap in France looks considerably smaller as well (12.1% vs. 4.7%2).
    It may be surprising to say the countries where the lowest gaps are found are those where investor expectations were still more than double what advisors say is realistic. This includes 118% in Germany (10.7% vs. 4.9%2) and 120% in Canada (11.2% vs 5.1%2).
    image
    https://im.natixis.com/us/research/2021-natixis-global-survey-of-individual-investors
  • When a 59% Annual Return Just Isn’t Enough - Jason Zweig
    “Optimism is as American as hot dogs and apple pie. Too much optimism, though, is about as good for you as eating a few dozen hot dogs and slices of pie. In a recent survey of 750 U.S. individual investors, Natixis Investment Managers found these people expect to earn 17.3% this year, after inflation. That might not sound like pie in the sky. The S&P 500 returned 18.4% last year, counting dividends, and is up 15.9% so far in 2021. Recent past returns always mold future expectations.
    “Over the long run, however, the people in the Natixis survey anticipate earning an average of 17.5% annually, after inflation—even higher than for this year. That’s up from the 10.9% long-term return they expected in 2019, the previous round of the survey. It’s also more than twice the return on U.S. stocks since 1926, which has averaged 7.1% annually after inflation. It’s more than triple their 5.3% return over the same period after both inflation and taxes, according to Morningstar … The biggest winner of all over the 10 years through the end of May was Tesla Inc., up an average of 59.1% annually …”

    Full story appears in The Wall Street Journal July 3, 2021
  • Old_Skeet's Market Briefing, July 2, 2021
    Hi guys, I copied and pasted Old_Skeet's Market Briefing for July 2, 2021 from the Armchairinvesting board with his permission. Thought some of you would enjoy the read. It read as follows:
    This briefing is for the week ending July 2, 2021.
    The Index Review
    For the week the major market indices finished up for the week. The Dow Jones Industrial Average was up +1.02%. The S&P 500 Stock Index gained +1.67%, while the Nasdaq Composite climbed +1.94%. The Russell 2000 Small Cap Index gained +1.23%. The three best performing sectors for the week were technology +3.24%, consumer discretionary +2.07% and health care +1.99%. The 10-year US Treasury bond yield closed at 1.44% while the dividend yield on the S&P 500 Index was listed at 1.33%. Year-to-date the widely followed S&P 500 Index has gained +15.86%.
    Articles Investment Interest
    Morningstar: Q2 2021 Market Performance in 7 Charts
    https://www.morningstar.com/articles/1045559/q2-2021-market-performance-in-7-charts
    If the link fails, simply Google the article title and read through Google. Often times this works.
    How investors should reload stock gun for second half of 2021
    https://video.foxbusiness.com/v/6261767651001/
    Global Regulators Try Again to Eliminate Money-Market Hazards
    https://www.bloomberg.com/news/articles/2021-06-30/global-regulators-try-again-to-eliminate-money-market-hazards
    Old_Skeet's Third Quarter Investment Focus
    For the third quarter my investment focus centers in the following areas of my portfolio as I look for stocks to continue an upward path while most bonds, I think, will trend lower by year end. On the equity side I plan to buy around the edges in my growth & income area and especially in funds which pay qualified dividends plus some buys in my commodity strategy fund. In my income sleeve I plan to increase my muni income fund's weighting from about a 6% to an 8% weighting over time. Should the S&P 500 Index pullback into correction territory I most likely will open a special investment position (spiff) to play the swing. Funding for these buys will come from the portfolio's income generation which has averaged about 4.4%, per year, over the past three years along with a cash draw if needed. From my perspective, cash is the best "at will" call option there is. I use the below resource links to help me determine the better times to buy on the equity side of my portfolio as I like to add to existing positions, that are under step buy construction, during market dips and pullbacks.
    Short Volume S&P 500 Index ... http://nakedshortreport.com/company/SPY
    Breadth Reading ... http://indexindicators.com/charts/sp500-vs-sp500-stocks-above-50d-sma-params-3y-x-x-x/
    S&P 500 Chart, Elder Impulse System ... http://stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
    Thanks for stopping by and reading ... and, I wish all "Good Investing."
    Old_Skeet
  • JULY commentary, mugs, profiles, vacation recs and more!
    Interesting July commentary, as usual.
    I dearly wish, however, that MFO wasn't almost exclusively aimed at catering for those in retirement or approaching retirement.
    There is practically nothing at all within these pages to cater for or appeal to those starting out on life's investment journey. In fact, nothing to appeal to those from 18-45. I'm 55, and Lynn Bolin's monthly articles bore the hell out of me despite their impeccable quality. I'm still seeking agressive growth.
    What's a younger invester to do?
  • JULY commentary, mugs, profiles, vacation recs and more!
    Very interesting Bee!
    As Malcom Forbes said years ago - “There’s more money to be made selling it than buying it”! It being mutual funds, in the case.
    Re “the impending launch of a whole new series of funds from T. Rowe Price”

    I have been very impressed with TROW as a stock holding...anyone own TROW?
    https://morningstar.com/stocks/xnas/trow/quote
    Quick comparison with PRWCX, TRRBX, & TROW over the life of TRRBX.
    TROW Comparison
  • Be glad you don’t own this one (PFIX)
    IVOL was working earlier this year but I sold my positions and took profits when it started slumping. Using JEPI in its place. Looking for these type of funds to return at least more than 50 basis points, which is what I could earn with a Marcus money market account. I look at my etf positions daily, and don't hesitate to sell, if necessary !
  • JULY commentary, mugs, profiles, vacation recs and more!
    Enjoy Western New York! We, too lived in Rochester for five years well before the wineries became so popular.
    A friend and I spent several hours in Konstantine Frank's basement "sampling" his wine with him in the 80's.
    https://www.drfrankwines.com/
    Frank singlehandedly developed the vinifera grapes in the area in the 1950's. When he started it was all Concord grapes grown for Welch's grape Jelly. I think his vineyard still has the best Chardonnays and Rieslings
    A great read for the story of the vineyards there
    "Summer in a glass" By Evan Dawson.
    https://www.amazon.com/Summer-Glass-Coming-Winemaking-Finger/dp/1402797109
  • JULY commentary, mugs, profiles, vacation recs and more!
    Re “the impending launch of a whole new series of funds from T. Rowe Price”
    I have been very impressed with TROW as a stock holding...anyone own TROW?
    https://morningstar.com/stocks/xnas/trow/quote
    Quick comparison with PRWCX, TRRBX, & TROW over the life of TRRBX.
    TROW Comparison
  • JULY commentary, mugs, profiles, vacation recs and more!
    Re “the impending launch of a whole new series of funds from T. Rowe Price”
    Can’t wait!
    image
  • Be glad you don’t own this one (PFIX)
    If you are interested, I would encourage you to read Harley Bassman's "Convexity Maven" blog. Even if you do not agree with his concerns about inflation, he is wicked smart and worth listening to. He also has a model portfolio in December with some very interesting ideas, and has been referenced frequently in Barrons, for example.
    He designed PFIX as "fire insurance" against the damage the rising interest rates can do to financial commitments that are interest rate sensitive, ie Intermediate and Long Term Bonds, or an adjustable rate mortgage for example.
    https://www.convexitymaven.com/wp-content/uploads/2021/06/convexity-maven-fire-insurance.pdf
    He sees this a a $50,000 insurance premium against a $1,000,000 portfolio of intermediate bonds, that will pay off if interest rates shot up. If you believe inflation is truly "transitory" then you do not need this insurance. Some of us remember the 70's, however.
    I think this represents the biggest tug of war going on now: Will inflation truly be transient, and all of the price increases are only the result of Covid disruptions to supply chains et. The "no increased rate or inflation" view is best summarized by Lacy Hunt at Hoisington Management, who believes Treasuries will continue to rally.
    But he thinks this will happen because the feds are sucking all available capital out of the system to pay for the deficit. This does not bode well for the economy either.
    Of course we might get both: Collapsing growth and higher rates ie stagflation.
  • $100 oil? Analysts share their price forecasts after a strong rally in the first half of 2021
    John said: “Increase buy enery maybe good idea
    Added more Vde yesterday”

    Yes - Buying after something’s price has rocked up 150%+ is always a good idea. Why buy a home for $200,000 when you can wait a year and get it for $500,000? Why pay $50 for a new shirt if you can have the same shirt for $150 in a year? That new car you’re looking at for $40,000 will definitely be a better buy when the price tops $100,000.
    “Chop-logic” (as one of Shakespeare’s players put it).
    Note: The chart does not reflect today’s oil price at over $75. But it does show that oil ended 2020:at around $50 after briefly falling below 0 that spring.
    image
  • Be glad you don’t own this one (PFIX)
    +1 Just the name: Simplify Interest Rate Hedge! Probably should have used a term like strategic, quantitative, analytical, research, quantum. Near a 52 week low for this fund, which probably means nothing, since the fund managers don't know anything either !
    You mean like the Quadratic Interest Rate Vltly and Infltn Hdg ETF which was Vltl-as-F recently and not the smooth portfolio 'ballast' that many expected it would be?
  • Markets, July 2 and July 5 (Monday)
    If you're fiddling about at the keyboard and thinking about clicking the BUY or SELL icon; July 2 (today) finds a normal business day for equity, and a bond market early close at 2pm.
    Monday, July 5 is a full close of U.S. markets.
    'Course other countries and other folks will still be trading.
  • Be glad you don’t own this one (PFIX)
    +1 Just the name: Simplify Interest Rate Hedge! Probably should have used a term like strategic, quantitative, analytical, research, quantum. Near a 52 week low for this fund, which probably means nothing, since the fund managers don't know anything either !
  • HYI: High Yield, No Leverage, Term Structure Fund Worth A Look
    1 year average discount 5.04 %, 1 month average discount 2.58%, so maybe a better buy when current discount reaches 6% ?
  • Be glad you don’t own this one (PFIX)
    http://www.funds.reuters.wallst.com/US/etfs/performance.asp?YYY622_G33B++xjN5AzUc4z1D4ErazCbDBLcGXIWzlyYCETzzYLmgzyAfnbo2oYm86Tdu3i
    A pundit I watch mentioned PFIX (Lipper score card above) as a potential buy 3-4 weeks ago. So I’ve been tracking it, just as I sometimes track funds folks here mention or buy.
    The idea behind this fund makes sense. Profit from the increase in interest rates everybody and his brother (or sister) expect to be coming by shorting longer dated bonds. This fund attempts to do that. I haven’t studied the mechanics. And don’t own it. Judging by the dismal 4 week results it must be using some leverage.
    Since inception (May 10, 2021): -18.9%
    Last 4 weeks: -13%
    Not to flagellate a fund (or anyone who might have thought it a good idea). But might be sobering, possibly instructive, for all of us to consider the difficulty “calling” interest rates. Just because everybody agrees they’re going to rise doesn’t mean they will - at least anytime soon.
  • donuts or DNUTS to day ?
    For the life of me. I don’t understand the appeal of donuts in this day & age. What’s the nutritional value of a donut? What’s the calorie count? I think I can honestly say I haven’t eaten one in at least 25 years. There’s a legion of serious health complications associated with being seriously overweight.
    No thanks.