https://www.marketwatch.com/story/this-spot-on-predictor-of-who-will-win-the-2020-presidential-election-is-not-the-stock-market-or-even-opinion-polls-2020-07-07?siteid=yhoof2&yptr=yahoo
This spot-on predictor of who will win the 2020 presidential election is not the stock market or even opinion polls
Published: July 7, 2020 at 6:55 a.m. ET
By Mark Hulbert
/Does the stock market predict the winner of U.S. presidential elections? Many argue that it does, pointing to the historical correlation between the incumbent party retaining the White House and the stock market’s strength in the months leading up to Election Day in November./

One of the commenters suggests we look at SPX V Gold so I did. It would imply that the SPX peaked in late 2018.
https://stockcharts.com/c-sc/sc?s=$SPX:$GOLD&p=D&yr=3&mn=0&dy=0&i=t8724814200c&r=1594128517294

These articles have been published when the market were lower by 5,10 and 15%. I have heard in the last 10 years that rates can only go up, that the stock market is overvalued for years, that inverted yield signals top, that PE + PE10 are too high.
One day it will be right, I just like to know exactly when

Thanks for your opinion.
I would also like to read your thoughts on the Morningstar forums. I was told that you were put on suspended status. Has M* lifted the suspension?

Hi @FD1000:
Thanks for making comment.
While my system might seem complicated ... but, when looking at the three main feeds of the barometer and understaning them ... it really is not complicated at all. The barometer spins off of a blended earnings feed which is comprised of both TTM earnings and forward estimates. This gives credit for what stocks have done and what they are anticipated to do. This feed is used to compute a blended P/E Ratio and from there an earnings yield. The second feed is a breadth feed which looks at the percent number of stocks that are trading above their 50 & 200 day moving averages. Following this feed gives me some insight as to how much upside might be left or are we topping out? Perhaps, starting to head downward? And, the third major feed is money flow feed. I find it important to know which way money is flowing (in or out) and by how much. All of the three feeds are scaled and when combined produce a barometer reading which is also scaled with readings ranging from extremely overbought to extremely oversold with fair value being in the middle.
With this, it is really quite simple when one gets down to understanding the nuts and bolts of the barometer of how it works ... and, the information that it generates has been quite useful to me. This information is then used to aid me in making calls that adjust my baseline asset allocation of 20% cash, 40% income and 40% equity with about 10% of the cash which can be moved around to overweight when felt warranted. Currently, as I write, I am overweight the income and equity areas of my portfolio by +5% each. I'm thinking, that this will soon change as I'm looking to trim equities back by 5% to their normal asset allocation of 40%. This is due to my belief that equity valuations are now streached relative to their current and nearterm earning's projection although money flow coming into the Index is presently good; but, short volumes are high.
Thanks again for the comment ... and, coming from you ... (for me) it speaks volumes.
Cordially,
Old_Skeet

These articles have been published when the market were lower by 5,10 and 15%. I have heard in the last 10 years that rates can only go up, that the stock market is overvalued for years, that inverted yield signals top, that PE + PE10 are too high.
One day it will be right, I just like to know exactly when

Old_Skeet, your method is good but has lots of moving parts. Just an observation, not criticism :-)
A typical rebalance achieves similar results when stock prices go down and you keep switching from bonds to stocks to keep the same asset allocation. That is a good way until a black swan shows up and every time you buy more stocks on the way down you keep losing more.
The question of timing occupied my brain for many years.
I always want to be fully invested as long as I can. In the last 10-11 years, I was in cash for about 12 weeks, which means I was fully invested 98% of the time.
Until 2008-9, when I was younger with a much smaller portfolio. I just stayed the course because my fund managers (SGENX,OAKBX,FAIRX) played it right. After I lost 25% in 2008 I decided that the only way not to lose is to set up a simple selling %.
From 2009 and for the next several years, I would sell any stock fund I owned if it lost more than 6% and bought a bond fund. I would sell any bond fund that lost over 3% and searched for another more conservative fund. If I could not find any bond fund then I would go to cash.
When stocks bottomed and rebounded, I only increased stocks using a pyramid up. That means that every time I buy more stock mutual fund the price must be higher than the previous one,
In 2018 at retirement, I made my selling criteria stricter. I only trade stocks short term (hours to days) using charts. I used bond funds most times. Any bond fund I own that loses more than 1% I sell and then I look for a better bond fund, if I can't find any I go to cash.
BTW, the above is probably too complicated. Stay fully invested and buy and hold is a good way for most investors :-)

The first comment is insightful:
Adam Wright says: 11 January 2016 at 09:52
I would add that quantitative analysis in fund research goes well beyond the specific track record of the fund(s). It should also dive into the underlying portfolio holdings which requires a significant amount of securities analysis as well. If you didn’t perform this task how else would you know if you are adding to a well-priced portfolio?
Additionally, if you didn’t perform this task how can you be sure the manager is actually doing what they are saying? In other words, you have to look behind the numbers as they do not tell the entire story nor do they indicate forward looking return potential.
My belief is that a strictly quantitative analysis would create an investment process that is not markedly different than performance chasing.
I’ve all but given up on fund managers, at least on the equity side, in my mind they have all disappointed. I still hold a couple of balanced funds which seem to compete well but I also hold IVIQX which continues to be even more cautious than me.

Sitting on Bond Profits? Sell, Switch or Wait?
https://www.wsj.com/articles/sitting-on-bond-profits-sell-switch-or-wait-11593894892
Profits are a good thing, but that doesn’t mean it always makes sense to take them.
If you’ve held bonds or bond funds over the past
Incognito
https://www.google.com/search?q=Sitting+on+Bond+Profits?+Sell,+Switch+or+Wait?&oq=Sitting+on+Bond+Profits?+Sell,+Switch+or+Wait?
&aqs=chrome..69i57j69i60l3.1471j0j7&sourceid=chrome-mobile&ie=UTF-8
Do nothing...good hedge long terms

Fund F = Barclays Capital U.S. Aggregate Bond Index.
As expected it did its job as ballast to stocks.
What is going to be its performance in the next 5 years? maybe 2-2.5% annually.
I don't expect inflation to rise beyond Fed expectations. I have seen many predictions by experts to be off in over 10 years.

I'm a federal retiree with a TSP account. The F fund is an index fund based on the Bloomberg Barclays Aggregate Bond Index. IIRC, the duration is around 4.5. The 8.65 1 year return reflects capital gains from falling interest rates, similar to the gains recorded by core bond funds/intermediate bond funds.

+1
FedSmith is an advertising-based publication directed at Federal employees and retirees from what I can make out. It reminds me a bit of the publications sent free of charge to me from organizations like AARP and NEA / MEA (related due to prior employment). I’d be loath to criticize the content of any of these. They mean well. But neither do they provide the depth of financial insight / information you’d find on this board generally, or at any mainstream financial information service like WSJ, Bloomberg, Barron’s, etc. That may be because FedSmith (and the ones I cited above) are aimed at a broader, less financially astute population.
Excellent point about the declining interest rate trend we’ve grown accustomed to. If you’re under 50 you may not even remember previous decades of generally rising interest rates (assuming you can only remember such things back to when you were 20). Some of us who lived through and were investing during the 70s and 80s can assure you that what you’ve lived through is somewhat of an aberration as interest rates go. Rates can and do go in either direction - rising or falling. Someone here recently mentioned paying a 12 or 14% rate on a mortgage for a first time home.
The fund referenced in the article sounds a lot like the T Rowe Price U S Bond Enhanced Index Fund (PBDIX) which I happen to own. As bond funds go, its fairly “safe” holding all / mostly investment grade bonds having short-intermediate maturities. But in a serious ramp-up of interest rates it would certainly lose money,

I'm a federal retiree with a TSP account. The F fund is an index fund based on the Bloomberg Barclays Aggregate Bond Index. IIRC, the duration is around 4.5. The 8.65 1 year return reflects capital gains from falling interest rates, similar to the gains recorded by core bond funds/intermediate bond funds.

American Funds’ Quiet Rise to Bond Dominance
https://www.barrons.com/articles/american-funds-quiet-rise-to-bond-dominance-51593714454
Incognito
https://www.google.com/search?q=American+Funds’+Quiet+Rise+to+Bond+Dominance&oq=American+Funds’+Quiet+Rise+to+Bond+Dominance&aqs=chrome..69i57j69i60l2.1043j0j7&sourceid=chrome-mobile&ie=UTF-8
While most investors have been laser-focused on stocks this year, the relative steadiness of the bond market has gone largely ignored. American Funds’ bond portfolios, however, have produced a remarkable amount of good news. Managed by Capital Group, they turned in top-notch performance during the coronavirus rout, and have steadily climbed to the pinnacle of their categories over longer periods.
The gains reflect a quiet overhaul that has transformed Capital Group, founded in 1931, into a bond giant.

Using Portfolio Visualizer I noticed that VTI had negative rolling averages in 1,3,5,& 10 time frames dating back to 1993. That might be a little too volatile for a retiree and could pose a sequence of return risk if one had to pull money from VTI during one of these lows.

@johnN
That would be 4.04% per year (compounding continuously) in the growth of the share price. Consistent with Derf's note.
Are there also dividends which would figure into your total return?
So the recent 8.65% is a big improvement over historical performance; what are they doing better now?
David

Having reached 10% allocation in both BIAWX & VWIAX, I am starting a new pair - VLAAX (50-70% Allocation) & PHSKX (mid cap growth) - using funds from VMVFX sale & selling now USMV for the same reason.

https://www.fedsmith.com/2020/07/01/which-tsp-fund-up-8-65-12-months/
Which TSP Fund Up 8.65% in 12 Months?
For those who casually watch the rate of return for the funds in the Thrift Savings Plan (TSP), this may be a surprise.
F Fund Has Best Return Over 12 Months

“It's just I'm surprised that I rarely see it used as an asset class in asset allocation, multi-sector, or unconstrained funds. It seems that they would add value & diversification”
I don’t know if this answer satisfies - but a good house with its own highly competent credit research department can do a lot better playing in the corporate bond sector than it can with Treasuries. But msf induced me to look at a couple multi-asset funds.
Here’s what Price’s Spectrum Income fund (RPSIX) does. Its latest bond holdings (from Yahoo) show 0% in U.S. government bonds, 33% in (other) AAA and an average duration of about 5 years. Since the fund typically invests 15% (more or less) in an equity fund, the percent allocated to AAA is lower than might appear at first glance. https://finance.yahoo.com/quote/RPSIX/holdings/
TRRIX is one of Price’s conservative balanced funds. Normally it targets a 60% bond, 40% equity mix. According to Yahoo the fund is currently underweight bonds by 8% at 52% of portfolio. Like RPSIX, the fund holds 0% U.S. government bonds. And, like RPSIX, they’re holding the duration to just over 5 years. The fund hews to a higher credit quality than RPSIX - with 59% of bonds rated AAA. https://finance.yahoo.com/quote/TRRIX/holdings/ ..... T. Rowe is right a lot more often than they’re wrong on the long term outlook. Problem is most of us consider 6 months long term, while they’re looking out several years. Patience pays off.
Just a personal perspective (not applicable to others): I view bond funds as a “speed-brake“ that should reduce volatility during deep stock market downturns. Earning the paltry income available today doesn’t interest me. After one of my sources, Bill Fleckenstein, cautioned his readers to avoid lower credit grades last March, I’ve strived to stay with mostly intermediate-term bond funds that invest primarily in higher credit quality. AAA, AA A, BBB all fall within that zone. Yahoo is a great spot for viewing a fund’s bond credit quality / duration / maturity. I should add that Bill made that call a couple weeks before the Fed announced their intent to buy corporate bonds. So I don’t know if the advice still stands. Suspect so.

“Though the bottom line is, I don't think I could put 70% of my total portfolio in long-term treasuries and then just forget about it.” +1
Don’t confuse / conflate long-term Treasuries with long-term Treasury funds - or, for that matter, any type of fund investing in bonds. Two different animals. Funds respond much differently to rising / falling rates. That’s because changes rates affect fund flows. If rates fall and prices rise, more investors likely buy in, causing manager to purchase more bonds at higher prices. Prices fall? Investors flee, forcing manager to sell into a weak market at potentially lower prices. Than there’s the matter of fees and operating costs associated with funds that direct bond holders don’t face.
Your question is a good one. I’m but a casual observer of bonds. But in watching multi-asset funds of all stripes over the years, I get the impression that out beyond the 10-15 year duration, you don’t need a lot of those to significantly impact a fund’s volatility and performance. I rarely see any multi-asset fund that exceeds 10-15% in long term Treasury holdings. No doubt, there are some. In essence, a little bit of this asset delivers a big bang in a diversified portfolio. They make a great hedging tool - precisely because they tend to do better in weak equity markets and pack a disproportionate amount of punch.
Not topical - But there’s an even more potent creature called “zero coupon Treasuries”. For additional enlightenment, you might like to read up on those.

Can't find a good page on this now, but there are only two reasons I know of to hold long term treasuries.
One is immunization. If you like the current yield and there's something you're saving for many years down the road, buying a long term treasury or a few to get the right duration blend is a reasonable strategy. Similar to buying a CD for a targeted purpose.
The other is speculation. If you believe interest rates are going down, you would want to own the most interest rate sensitive, i.e. longest term, bonds. This is considered a speculative strategy - a bet on interest rates - because the difference between 10 and 30 year yields otherwise tends not to justify the additional risk.
Right now 10 years are yielding 0.69%, and 30 years are yielding 1.43%. Is it worth it to you to lock in a 1.43% return, a 3/4% difference in yield, for 30 years in order to bet on interest rates going down further?
OTOH intermediate term bonds can still have a place in a portfolio as a backup for cash in one's decumulation phase. For example, one can keep 3 years in cash or "cash like" investments, and another 4-6 years in intermediate term bonds, with the rest in longer term investments. This is effectively using a bond immunization strategy, not for a long term purpose, but for a midrange one.

July 3rd Episode: