July 17th Episode:

On another note, I’ve been hmmming a lot over the events in Seattle, Portland and other American cities.
I’m thinking there must be a graphic buried away somewhere (maybe in a political science department’s vault) that visually delineates the gradual progression from “protest” to “insurrection” to “revolution“. And I’m humming over whether this idea of unidentified (presumably) federal police dressed in military style fatigues showing up and “helping” to police cities that don’t want the help gains traction and becomes a permanent fixture of the American scene. More specifically, I’m wondering whether they’ll be hanging out on Michigan streets come November.
In case you’ve been living in a cave -
https://www.washingtonpost.com/nation/2020/07/25/seattle-

List of Businesses Amazon is in ..... (Pardon my dangling preposition.)
1. Retail goods
2. Amazon Prime
3. Consumer electronics
4. Digital content
4.1 Amazon Studios
4.2 Amazon Games Studios
5. Amazon Video
5.1 Video Direct
6. Delivery
6.1 Groceries
7. Amazon Business
8. Amazon Drive
9. Private labels and exclusive marketing arrangements
10. Amazon Web Services
11. Amazon Publishing
12. AmazonSmile
13. Amazon Local
14. Retail stores
15. Amazon Home Services
16. Amazon Cash/Top Up
hmmm... https://en.wikipedia.org/wiki/List_of_Amazon_products_and_services
In rural / northern Michigan I just acquired internet service adequate for streaming movies. Quickly learned that Amazon Prime Video ain’t so “prime”. For most of the good stuff they hit you up for charges ranging from $2 to $4 for a maximum 48-hour rental. By contrast Netflix and others let you watch as much as you want for one flat fee ($9 a month in the case of Netflix)

insane numbers, there. And when the music stops, well you don't want to be there. Which reminds me:

One reason maybe that AVEFX ''flies under the radar'' is it is not available at Fidelity or Schwab no load/NTF.

In 2020 peak to trough AVEFX lost about 10% while FPINX lost only about 2%.
AVEFX has 20% in stocks FPINX < 1%
Vanguard VASIX is a better choice than AVEFX. See (chart). VASIX ER=0.11%. It has better performance and SD(volatility) is close.

“They said that as AUM increases, the yield will fall.”
That’s what they told me would happen back in early June. AUM was around 11 million then. If AUM is up to 17, then I has increased by about 55%. Cash has increased to 36%. This was all to be expected. The question is how will they deploy all that cash. It looks like they are expecting a covid second wave, recession/depression, defaults, etc. They want dry powder. By hiring them as managers, I’m paying for this type of tactical allocation. We’ll see how it works.
I don’t need this fund for monthly income. It’s an aggressive opportunistic allocation.

As of 6/30 they have 35.57% in cash. They will probably have an update in the week following this week. It's strange they have so much cash. 17 million is a very small portfolio and it should be very easy to find more bonds for extra 6-7 million.
The next 1-2 weeks would tell us plenty. Is the daily distribution fall around 0.0015, 0.002 or more.
If the expense ratio goes to 9.2% (the waiver of 8.38% ends at 7/31/2020) this fund will not be good.

Jeff's weekly column is always a good use of 15 minutes of my time. Hopefully you will find some value in this weeks writeup.
"I have written about economic indicators for more than fifteen years in WTWA and studied them before that. Usually there is some value in each. Not now. Very few are helpful in identifying the economic turn and prospects.
Indicator Analysis
I will summarize the indicator, how it is interpreted, the current implication, and my own comment."
Weighing The Week Ahead: Time To Look Under The Hood

@Derf - May 12 at $58.50. Haven't added to it since but wish I had.

From Jesse Felder, The Felder Report:
"Just three stocks, Apple, Amazon and Microsoft, make up more than 16% of the S&P 500 Index and over a third of the Nasdaq 100 Index. Together they are now valued at nearly $5 trillion. That’s larger than the entire economy of Germany and roughly the size of the Japanese economy."

Hi guys,
With this past Friday's market close on July 24th Old_Skeet's stock market barometer, which follows the S&P 500 Index, produced a reading of 129 which indicated, by the barometer's scale, an overbought reading for the Index. The last reported reading of 121 on July 17th reflected that the Index was extremely overbought. A higher barometer reading indicates that there is more investment value in the Index over a lower reading.
Generally, I will not open an equity spiff position until the barometer has reached a reading of around 160 or better; and, I start stepping out of a spiff postion with a barometer reading of 140, or lower. With this, we still have a ways to go before the Index becomes a buy for me.
My current asset allocation is about 15% cash, 45% income and 40% equity. I am overweight the income area by +5% because of low cash yields. My normal asset allocation is 20/40/40.
Thanks for stopping by and reading.
I wish all ... "Good Investing."
Old_Skeet

“They said that as AUM increases, the yield will fall.”
That’s what they told me would happen back in early June. AUM was around 11 million then. If AUM is up to 17, then I has increased by about 55%. Cash has increased to 36%. This was all to be expected. The question is how will they deploy all that cash. It looks like they are expecting a covid second wave, recession/depression, defaults, etc. They want dry powder. By hiring them as managers, I’m paying for this type of tactical allocation. We’ll see how it works.
I don’t need this fund for monthly income. It’s an aggressive opportunistic allocation.

Stole this from The Balance -
“ Emerging Markets List
The Morgan Stanley Capital International Emerging Market Index (MSCI Index) lists 26 countries. They are Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates.
Other sources also list another eight countries as falling into the emerging market category. They include Argentina, Hong Kong, Jordan, Kuwait, Saudi Arabia, Singapore, and Vietnam.
The main emerging market powerhouses are China and India. Together, these two countries are home to over 35% of the world's labor force and population. In 2018, their combined gross domestic product (about US$28.1 trillion) was greater than that of either the European Union ($18.8 trillion) or the United States ($20.5 trillion). In any discussion of emerging markets, the powerful influence of these two super-giants must be kept in mind.”
I wonder if an investor would be wise to be select some countries and rule out others?

The old M* shows 16.9 million (link)
My whole point is to show a huge reduction is distributions and why MWFSX performance will be much lower in the future.
If you look at M* for the Multi category(here) You can see the following
One month...category=1.79...MWFSX =0.89
One week.....category=0.75...MWFSX =0.11

0.0015 * 365 = 5.475%
It has accumulated $0.068212965 so far this month. with only 5 days left my guess is the distribution for this month about 7.6cents. Last month was 13cents.
other funds showed price appreciation but not this one. But the question is how long how far can the price go up. If MWFSX can keep price and distribution stable it is not a bad choice. my concern is its distribution is in a a downward trend and quite dramatically. Need to keep a close look.
AUM is 16.9M at their website. M* is 13.7M

Using rounded figures for back of the envelope calculations:
EDV:
2013 Price loss: 1 - 89.62/116 ~= 22¾% (Yahoo figures for 12/31/2012 and 12/30/2013)
2013 Yield: -18.86% - (22¾%) ~= 4%
Say that PSLDX had bonds of similar maturity, so it should have made 4% on the yield also.
It should have lost about 13½/25 as much on bond prices (shorter duration), or about 12¼%
It should have gained about 32¼% on the equity side.
(Per mid 2013 prospectus, the target duration for PSLDX was 13½ years ±2 years)
Thus it should have made: 32¼% + 4% - 12¼% ~= 24;%
It not only got crushed by its long bond holdings, but underperformed as well.
You are comparing a zero coupon bond fund with a coupon bond fund. That may be okay with a short term bond (or bond fund), but falls apart as maturities get longer. As Fidelity says:

Generally, bonds with long maturities and low coupons have the longest durations. These bonds are more sensitive to a change in market interest rates and thus are more volatile in a changing rate environment. Conversely, bonds with shorter maturity dates or higher coupons will have shorter durations

There are most definitely derivatives in play with PSLDX,
AFAIK, nearly all the "play" is simply to gain leverage. There's a whole lot of investment engineering one can do with derivatives, as PIMCO typically does with its funds. In contrast, here derivatives are used primarily to get market exposure without putting up much cash: "It does this by purchasing low-cost S&P 500 derivatives exposure." These derivative mimic the S&P. It can then use the cash that it would have invested in the equity market to invest in bonds. There's your 2x leverage. Nothing funky.
The marcom verbiage you're paraphrasing (with no quotes, no cites) says simply that when one mixes stocks and bonds, sometimes the bonds help, sometimes they hurt. I've posted on this too many times already to say much more than that. Other than to observe that one thing it omitted is that because this fund is leveraged roughly 2&frac14 x (100% stock exposure, 125% bond exposure) it could fall 2&frac14 times as fast as "the market" if both stocks and bonds fall. Which more than explains why :
it lost a ton of value in a few sessions, not explained by the market
From March 15 through March 23, PSLDX lost 21%, the S&P 500 lost 17%, and VWESX (an IG grade fund with a similar 14 year duration and similar 21-22 year maturity) lost 8%. Just adding the equity and bond losses together (forgetting about the extra 25% bond side leverage), one gets a loss of 25%. Impressive performance, actually.
Here's a chart showing these funds, plus PSTKX over this short period.
Equity, long bonds, leverage. Not much else going on here, no magic.

Yeah, since Feb 20 it looks chiefly like this aggressive 85% fund w LCG (???), and now is back to right where the somewhat similar VALIX is.
That is some mid-March trough for sure.
Longer-term it is all rock 'n' roll, and they sure did something yuge starting June 2019.
$1M min??
This is interesting, a little, from before mid-March: https://www.bogleheads.org/forum/viewtopic.php?t=305950

I’m not too concerned about 3 month performance. If this continues for a year I’ll reevaluate. They are up to 36% cash. If all that cash was invested at 4.5%, the fund would yield a little over 6%. I like them keeping dry powder in these volatile times. 36% seems quite large, but I fully expect them to use it opportunistically. As always, time will tell.

So many great suggestions. My thoughts, overall, are that the hands-on experience grandson will enjoy with his initial nest-egg will motivate him to engage in financial conversation and study on his own. Books? I get lots from folks around the holidays. Seldom do I ever read any of them, as I’d rather “set my own (reading) table“ so to speak. Plus, many loving relatives (nieces, nephews, etc.) don’t realize that 90% of my reading today is on tablet devices and most of the rest thru audiobooks. Because of my ancient and grizzled appearance, younger people who don’t know me very well must assume I still read paper books. Excuse the digression. But, often telling someone they should read a particular book (or do anything else) achieves the opposite effect..
@MikenM (and perhaps others) referenced technology as an inviting investment. Not a bad thought. However, tech is very diverse area. Some “hot” areas from the not too distant past like hand-held calculators, VHS players, Commodore computers and “cordless“ (land-line) phones are nearly extinct. My guess is in 30 years, when grandson turns 50, the really hot areas will be lunar and interplanetary mining (and related services), infrastructure for underwater habitat, and solar powered autos & trucks. So don’t get too wedded to any single technology. Truth be told - it’s hard to remember when “technology” in some form wasn’t in vogue. Likely, the horse-drawn plough underwent many “technological improvements” during its time. And, as broken arms and fingers testified, the advent of battery powered self-starting farm tractors and autos was a huge technological leap.

According to Instant Xray, about 8% of my equity allocation is invested in emerging markets with both my emerging market funds (DWGAX & NEWFX) being up better than +20% each over the past rolling 90 days. In addition, I have a good number of equity funds that are bettering the +20% mark as well. So, it is not just emerging markets that are (or have been) on the upward move as there are some others as well.
My three best 90 day leaders are AOFAX +25.43 ... SMCWX +24.43 ... and, FISCX +24.37.

I would do as I did with my two youngest kids. Set up a brokerage account, making it a Uniform Gift to Minors if the child is under 21. Try to explain that you are putting in some dough and that additional deposits should represent 50% of the child’s earnings, even if minimal. An adult child should be shown how to pay him/herself first. Invest the parent or grandparent contribution in a good growth fund (AKREX) and a dividend growth ETF (VIG). If only $1K is available, use ETFs for both positions, using QQQ (or similar) for the growth portion. Try to get the kid to see how the account works and how money can grow if it’s added systematically. At 21, the kid’s in charge and you hope you’ve been a good teacher. Offer advice when it’s sought.