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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.
  • Q&A - Bucket Strategies in Retirement
    @hank ; my best guess 2018.
    The S&P 500 Price index returned -6.59% in 2018. Using a better calculation which includes dividend reinvestment, the S&P 500 returned -4.75%..
    Not that long ago, Derf
  • Investors Big and Small Are Driving Stock Gains With Borrowed Money
    https://www.wsj.com/articles/investors-big-and-small-are-driving-stock-gains-with-borrowed-money-11617799940?mod=markets_lead_pos5&mod=djemHeardEUH
    Investors Big and Small Are Driving Stock Gains With Borrowed Money
    ***The past year’s rally has been boosted by Robinhood day traders and big investment firms
    Investors are borrowing huge sums of money to buy stocks. Is that a problem?
    The “everything rally” that started in stocks last year has been boosted by investors betting money they have borrowed. That includes both small players like the day traders on Robinhood Markets Inc. and heavyweights like Archegos Capital Management, the investing firm that triggered a mini meltdown for several companies’ stocks.
    As of late February, investors had borrowed a record $814 billion against their portfolios, according to data from the Financial Industry Regulatory Authority, Wall Street’s self-regulatory arm. That was up 49% from one year earlier, the fastest annual increase since 2007, during the frothy period before the 2008 financial crisis. Before that, the last time investor borrowings had grown so rapidly was during the dot-com bubble in 1999.***
    House of card??? Imminent crash coming? Maybe in 24 months after borrowed dry powder run out?
  • Best No Load and NTF Funds Available at Fidelity
    HMEAX is ntf at Vanguard and E-Trade. I had HMEAX transferred to Schwab when I closed my E-Trade account, so that I could periodically invest in this fund with no transaction fees. I can't force myself to pay $50 transaction fees, although $10 fees would be fine !
  • Best No Load and NTF Funds Available at Fidelity
    Annoying that so many of my recent Fund purchases at FIDO have had Transaction Fees (i.e. ARBIX, HMEZX, FPFIX). I would usually refuse to pay $50 a pop - feels like a corporate donation.
  • How much dry powder to hold in reserve ?
    Argentina can't repay its 45 billion dollar loan to the IMF and its debt is rated CCC, with inflation around 30%.
    That's important to know. Thanks for telling me, @carew388.
    Another prospect I just found: BBVA (Spain) but 75% of its profits comes from EM. It fully owns Bancomer, in Mexico. Right now: -25% discount, share price vs. Fair Value. (Morningstar.) Maybe this stuff is useful to someone else. ...Anyhow, I've been digging, doing my homework and my kagels.
    https://en.wikipedia.org/wiki/Kegel_exercise
  • How much dry powder to hold in reserve ?
    Argentina can't repay its 45 billion dollar loan to the IMF and its debt is rated CCC, with inflation around 30%.
  • How much dry powder to hold in reserve ?
    @LewisBraham, I took the author's "100%" to mean invested , not specifically invested "100% in stocks".
    "100% invested at ones' asset allocation level" might be a better way to phrase it.
    For Warren Buffet's wife that would be 90% S&P 500 and 10% ST Treasuries. I think what is not properly discussed is the concept of sequence of return risk.
    Reserve assets (Cash, bonds, HELOC on your home, etc.) help mitigate sequence of return risk of market correlated assets.
    "Sequence of Return Risk" discussion thread:
    https://mutualfundobserver.com/discuss/discussion/comment/133887/#Comment_133887
  • How much dry powder to hold in reserve ?
    @MikeM - All good points. BTW - always glad to see you posting.
    Investment nomenclature changes. Go back 10-15 years and board participants talked a lot about “stashing away dry powder”, “backing up the truck” and “going all in”. Not sure what’s in vogue today. But it ain’t these.
    Cash rubs a lot of people the wrong way. In its defense I’d make two points.
    - Cash alternatives offer slightly better returns. I’m using TLDTX which carries a lower ER than either Price’s money market or ultra-short fund, invests in government backed paper and maintains a fairly stable value. It’s up 1.28% YTD.
    - If you rebalance periodically, after a bad year for your other holdings you’d be glad to have owned even some “0 return” cash to shift into those now depressed sectors. As a % of your portfolio, cash has increased - even while returning 0%.
  • Best No Load and NTF Funds Available at Fidelity
    I have found myself with a little extra time on my hands and took on a rather large project in my latest article on Seeking Alpha.
    This article begins with a comparison of Mutual Fund Observer Composite Ratings to Morningstar Overall Ratings for over 250 No Load, No Transaction Funds available at Fidelity. It provides at Return vs Maximum Drawdown comparison using MFO ratings. I update my own Rating System including MFO Composite Ratings to identify the best 12 of these funds available at Fidelity. Of course definitions of the "Best" funds will vary by investor, so I list five funds per investment bucket. MFO metrics are included for these funds.
    https://seekingalpha.com/article/4417912-best-no-load-mutual-funds-available-fidelity
    Stay Safe and Be Well,
    Best Regards
  • How much dry powder to hold in reserve ?
    TODAY'S results might be a useful illustration. Not a great day in the Markets, generally. Yet, with my 51% bonds and 40% stocks (the rest in "cash" held by fund managers) it worked for me: up barely on the day, but up, nevertheless. (+0.07%) I'd be below the break-even line if my PRWCX were not almost 32% of my holdings. (Up just a penny.)
  • The Future of Money
    And those miners of an imaginary currency are in a very real way killing our planet: https://bbc.com/news/technology-48853230
  • The Future of Money
    Meaty...
    Let’s begin with the future of money that no one foresaw.
    In 2008, in a wonkish paper that bore no relation to any sci-fi, the enigmatic Satoshi Nakamoto launched Bitcoin, “a purely peer-to-peer version of electronic cash” that allows “online payments to be sent directly from one party to another without going through a financial institution.” In essence, Bitcoin is a public ledger shared by an acephalous (leaderless) network of computers. To pay with bitcoins, you send a signed message transferring ownership to a receiver’s public key. Transactions are grouped together and added to the ledger in blocks, and every node in the network has an entire copy of this blockchain at all times. A node can add a block to the chain (and receive a bitcoin reward) only by solving a cryptographic puzzle chosen by the Bitcoin protocol, which consumes processing power.
    Nodes that have solved the cryptographic puzzle — “miners” — are rewarded not only with transaction fees, but also with more bitcoins. This reward will get cut in half every four years until the total number of bitcoins reaches 21 million, after which no new Bitcoins will be created. As I argued here last November, there were good reasons why Bitcoin left gold for dead as the pandemic was wreaking havoc last year. Scarcely over a year ago, when just about every financial asset sold off as the full magnitude of the pandemic sank in, the dollar price of a Bitcoin fell to $3,858. As I write, the price is $58,746.
    don-t-let-china-mint-the-digital-currency-of-the-future
  • How much dry powder to hold in reserve ?
    As the article points out, a younger investor might comfortably remain invested 100% of the time (10 of more years away from retirement).
    Using Portfolio Visualizer one can back test balance funds such as VBINX or FBALX and analyze their 3 & 5 year rolling returns back to 1994. Their 3-year rolling returns went negative twice (June 2002 - Oct 2003) and (Sept 2008 - Dec 2010). It appears a balance portfolio in retirement might want to avoid withdrawals during these types of time frames. The longest of these time frames being about 2 years. It would seem appropriate to keep two years worth of spending out of the market so that it could be spent during these negative draw down periods. Maybe more if you are strategically trying to use cash to "buy" when the market swoons.
    PV link (click on the rolling return tab)
  • TRP Brokerage offer
    After the Strong Capital Management (and other related) scandals in the late 90s the SEC pressured fund houses to crack down on frequent trading abuses. These “skimming” operations were often orchestrated in concert by large groups (ie an employees’ investment plan). But smaller investors as well were impacted by generally more stringent curbs imposed on frequent buying and selling. I don’t find Price’s or others’ curbs particularly onerous; however, a way around the limitations would appear to exist in substituting ETFs for traditional funds.
    While the fee advantages seem significant, I’m wondering if a retiree in his mid-seventies would find it worth the trouble in converting over t ETFs what has proven a prudent and profitable diversified approach - using roughly 12-15 long-held mutual funds from fiduciaries long acquainted with. Changing from one investment method to another would seem always to entail some risk of error.
    ...I'm with Hank, though only 66.
  • Chip Crunch
    “Chip Crunch Is Stifling Production of New Chips, Gearmaker Warns”
    Yahoo
    I read somewhere recently that Ford is temporarily shutting down production of their highly profitable F150 pickup due to this issue. Other auto manufacturers affected as well.
    Not even chips are immune from political finger pointing. Reuters
  • jhqax closing to new investors
    @fred495 : Thank you for chiming in. I recently started with a minimum deposit & within a few weeks added to the fund . I will DCA when market cooperates.
    Stay Safe, Derf
  • April commentary, stock light portfolio version 4.0, 65 years ?
    More about stock light portfolio: I wonder whether solid historic performance of this portfolio is related to gradually decreasing rates.? 40 years ago, in 1981, US treasury yield at its peak was 15.8%. Now it is below 2%. The difference is 14%, which was a tremendous contributor to bond funds returns. One can hardly expect that this trend can continue.
  • jhqax closing to new investors
    As a conservative and a retired investor, I want some exposure to equities in my portfolio and was recently looking at balanced funds with a M* risk rating of "Below Average" and a standard deviation of < 8 or 9%.
    Two highly rated funds stood out in this category: VWINX and VSCGX. However, when I compared their risk/reward profile to JHQAX, I was surprised to see that the latter fund had significantly higher 3 and 5 year total returns. While these three funds had similar standard deviations that varied in a range from 7.6 to 7.8%, JHQAX, however, displayed superior Sharpe and Sortino Ratios. I was also impressed that during the market crash last year, JHQAX only lost 3.8% and 1.4% in February and March, respectively. VWINX, on the other hand, lost 2.5% and 6.3%.
    While JHQAX may limit upside potential, but at this stage of my life I am more concerned about capital preservation and prefer to err on the side of caution. And, the M* analyst's comment that "Attractive fees, a transparent and consistent process, and an experienced manager elevate JPMorgan Hedged Equity ahead of its peers..." was also quite persuasive in my decision to invest in JHQAX.
    So far, so good.
    Fred
  • Amazon Versus the Unions
    https://nytimes.com/2021/04/05/technology/amazon-nlrb-activist-workers.html
    Amazon Illegally Fired Activist Workers, Labor Board Finds
    The two employees had publicly pushed the company to reduce its impact on climate change and address concerns about its warehouse workers.
  • TRP Brokerage offer
    After the Strong Capital Management (and other related) scandals in the late 90s the SEC pressured fund houses to crack down on frequent trading abuses. These “skimming” operations were often orchestrated in concert by large groups (ie an employees’ investment plan). But smaller investors as well were impacted by generally more stringent curbs imposed on frequent buying and selling. I don’t find Price’s or others’ curbs particularly onerous; however, a way around the limitations would appear to exist in substituting ETFs for traditional funds.
    While the fee advantages seem significant, I’m wondering if a retiree in his mid-seventies would find it worth the trouble in converting over to ETFs what has proven a prudent and profitable diversified approach - using roughly 12-15 long-held mutual funds from fiduciaries long acquainted with. Changing from one investment method to another would seem always to entail some risk of error.