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.
  • Bond Investors Face Year of Peril With Few Places to HideBy 
    @crash - it's not for everyone but
    IOFIX - 1yr.: +18.29% although after last year there really wasn't much place to go but up.
    YTD: +13.7%
    Yield: 3.98%
  • RMDs
    As I understand the IRS instructions, you have to use the total amount of all your IRAs to calculate the RMD.
    Do not calculate in your Roth IRAs, but do include your Roth 401Ks as part of your RMD (though that portion would be tax free). Once the Roth 401K portion is distributed it loses it Roth status. All this can be avoided.

    There are presently no RMD on Roth IRAs as it stand right now.

    If I owned any Roth 401Ks I would roll them over into Roth IRA status and enjoy the benefits afford Roth IRAs.
    You can avoid having to take future RMDs from a Roth 401(k) by rolling the money over to a Roth IRA. Roth IRAs are not subject to required minimum distributions. If some of your money is in a Roth 401(k) and some is in a traditional 401(k), roll the traditional 401(k) money into a traditional IRA and the Roth 401K money into a Roth IRA to avoid any tax complications. “That will make record keeping a whole lot easier,” says Stuart Ritter, a certified financial planner with T. Rowe Price.
    Avoiding Required Minimum Distributions from Roth 401(k)s
  • With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's
    There has been plenty of discussion about whether recent inflation is transitory or not.
    The "experts" disagree on this topic.
    Here's a look at S&P 500 (and its predecessor) calendar year returns along with annual inflation.
    Link
  • With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's
    Why should rare years-apart purchases be included in widely impacting run-of-the-mill inflation calcs? ...

    Do you disagree with the BLS for including the prices of new and used motor vehicles in its CPI calculations?

    It's a continuum, arguable, debated, ...
    The only antecedent for "it" I can see is periodicity of purchases, so I'll infer that this continuum is the length of time between purchases.
    Until the past decade or so, average time of home ownership was about four years. For example:
    image
    Source page: https://ipropertymanagement.com/research/average-length-of-homeownership
    New car ownership in 2017 was almost seven years, or just a shade less than home ownership since the GFC.
    https://www.cnbc.com/2017/05/28/car-owners-are-holding-their-vehicles-for-longer-which-is-both-good-and-bad.html
    Is this minuscule difference in holding periods really what you want to pin your continuum premise on?
    I'm sure you're aware that when housing costs (including investment attributes) had been used in calculating the CPI, those costs included mortgage interest, property taxes, insurance, and maintenance expenses. That's in the paper I cited.
    Paraphrasing your original question, why should frequent, periodic cash outflows (interest, taxes, insurance, and maintenance costs) be excluded from widely impacting run-of-the-mill inflation calcs? Even if those costs fluctuate wildly from month to month as construction (maintenance) costs have done this year.
  • William Blair China Growth Fund - WIGCX
    Just updating -
    M* indicates no investment from managers. The fund launched with $2M AUM and currently has $2.7M AUM. The M* chart since inception looks acceptable performance for this fund.
    The Sept fact sheet is here - https://www.williamblairfunds.com/resources/docs/funds/factsheets/2021-09-30/William-Blair-China-Growth-Fund-Class-I-9-30-2021-Fact-Sheet.pdf
  • Bond Investors Face Year of Peril With Few Places to HideBy 
    Rather than spend a fair amount of time searching for an ratings agency (NRSRO) default report, I'll just refer you to M*'s figures. In Exhibit 2 on p. 4 of this M* paper is a table that includes "default score" by credit rating. Those aren't default rates, but represent relative rates of default. BBB has a score of 5.0, BB has a score of 17.78, meaning that BB bonds default at roughly 3½ times the rate of BBB defaults.
    There really is a big difference, which is why M* doesn't simply score A's as 1, B's as 2, C's as 3 and so on when calculating a portfolio's average quality.
    https://www.morningstar.com/articles/354597/credit-quality-demystified
    PTIAX may be a mere poseur. Between 2012 and 2020 it was classified as a multisector bond fund, typically meaning that it had even more junk than a core plus bond fund. In 2021 it was classified as an intermediate core plus fund, and in 2011 it had been classified as an intermediate core fund (before core plus funds were given their own category).
    As the linked article (about the new core plus category) states, the median amount of junk in a core plus fund is (or was, at the time) about 8%. DODIX has 11%, all BB (including NR bonds). PTIAX has more than that (12½%) in bonds rated lower than that (or NR). Plus another 5% rated BB. Then there's BCOIX, with less than 4% junk (including NR), nearly all at BB.
    I suspect you'll find a fair degree of correlation between funds' YTD performance and the amount of junk in their portfolios. PTIAX > DODIX > BCOIX.
    Note:edited to fix typo, per @BaluBalu's suggestion.
  • With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's
    Thanks @msf for the pricing of a new or used vehicle question.
    One person told me he had been ask to cough up an extra 10 k on a new drive at a dealer , 5k at another place & finally coughed up an extra $750 for his new ride.
    EXTORTION NOT ? , Derf
  • Far Out
    Some potentially worrisome thoughts …
    - Could Zukerberg someday control the universe through this augmented reality?
    - Would an augmented reality “Big Mac” taste as good as the real thing? (If it could be made 0 calorie I might buy one.)
    Also - Elon Musk, arguably one of the smartest visionaries alive, has been warning about the dangers of AI for several years now.
    2018 Article
  • RMDs
    The answer depends on what you mean. If you are asking whether you can instruct Fidelity to (a) compute your RMD for each account, (b) add those figures together, and (c) schedule an automatic withdrawal in that amount from the IRA account you specify, all without any interaction on your part, I don't see how to do that at Fidelity. I also have my doubts about any brokerage providing that level of automation.
    OTOH, if all you're asking for is to be able to schedule a future withdrawal from a single IRA in an amount that will satisfy your RMD requirements, then sure, pretty much any institution including Fidelity will let you schedule future withdrawals. It could be to satisfy RMDs, it could be to gift assets (which has its own tax implications), it doesn't matter, they don't care.
    As a courtesy, Fidelity, like most institutions, will calculate your RMD for each account.
    https://digital.fidelity.com/search/main?q=RMD automatic&type=o-NavBar
    Regardless of what your institution calculates, it is your responsibility to get it right. Don't assume the figures are correct. Especially in 2022, when the RMD tables change.
    There's always the small possibility that some institutions won't update their RMD tables. More likely is the possibility that they don't correctly recalculate the RMDs for inherited IRAs. "The IRS regulations include a special 'reset' provision for calculating RMDs for nonspouse beneficiaries who inherit before January 1, 2022." It's not a matter of simply looking up a new divisor.
    https://www.irahelp.com/slottreport/irs-issues-new-rmd-tables-2022
  • Bond Investors Face Year of Peril With Few Places to HideBy 
    The inflation headline statistic is 5.4%. 5.9% is the adjustment for SS. That affects only SS receipients. It is based on CPI-W which is different from the marquee inflation metric CPI-U.
    https://www.bls.gov/news.release/pdf/cpi.pdf
    As I posted previously, CPI-E is even lower. According to the CPI-E excel spreadsheet data, this Y/Y figure as of Sept was about 5%.
    There are also those who feel that items that are purchased infrequently shouldn't even be counted. On that basis, perhaps we should pull out the figures for vehicles like used cars and trucks. Their costs went up 24.7% over the past twelve months. As you wrote, some things we can control, and most people don't need to buy a vehicle in any given year.
    Moving on to bonds, the three funds RPSIX, PRSNX, and PTIAX all have credit ratings of junk by M*. (This does not represent a tactical move by these funds; over the past several years they have been consistently rated junk.)
    Junk bonds tend to have moderately high correlation with equities, and so share a similar (albeit muted) risk profiles. This has been a good year for equities and for junk bonds.
    Here's a correlation matrix of the four funds. R² over the past year with respect to MWHYX (a junk bond fund) ranges from 49% for PTIAX to over 75% for RPSIX and PRSNX.
  • Far Out
    @Anna, Where is IBM I wonder (article below asked this question 10 years ago...Article date is 2011)?
    where-the-heck-is-ibm
    They are somewhere still:
    ibm-will-reskill-30-million-people-by-2030-for-future-technology-jobs/
    Sept 30th 2021 ibm-kyndryl-spin-off/
    Even the IBM Employee Credit Union has morphed into "Intelligent - Thinking" (iThink):
    ibm-southeast-employees-credit-union-is-moving-to-ithink-financial-credit-union
  • Far Out
    We will be the last Carbons standing. Actually, I have never met any of you.
    Some of us carbons may already be silicon.
    Here's META's holdings:
    image
  • Bond Investors Face Year of Peril With Few Places to HideBy 
    RPSIX. 1-year +7.95%
    YTD. +2.42
    yield 2.55%
    my own performance since investing in the fund, according to TRP: +5.12%
    PRSNX. 1-year: 3.77%
    ytd: 0.71%
    yield: 2.87%
    account performance since inception: 4.71%
    PTIAX. 1-year: 3.29
    ytd: 0.95%
    yield: 3.47%
    I can't complain..... yet.
    ...And if someone can either increase income or decrease spending, inflation is not as big a monster... unless we're talking late '70s/early '80s-style inflation: outa control. Yes, the current inflation headline statistic is +5.9%. But the way the gov't measures inflation is.... bullshit. It's higher that 5.9%, for sure. SOME things we CAN control, to protect and assist ourselves. But I'm preaching to the choir: we who are regular contributors to this message-board are among the luckiest, most fortunate. The country is being hollowed-out from within. We are in a long, slow decline, the way all empires eventually go through.
  • With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's
    >> owing to political and statistical issues
    This is silly, or at best tendentious. Why should rare years-apart purchases be included in widely impacting run-of-the-mill inflation calcs? Go read the many articles posted here about what the 'official' rates comprise, and why.

    Do you disagree with the BLS for including the prices of new and used motor vehicles in its CPI calculations?
    https://www.bls.gov/cpi/factsheets/new-vehicles.htm
    It's a continuum, arguable, debated, as you know despite your automatic contrariness and as (I think) you may have written about; see this from a half-year ago:
    https://www.nytimes.com/2021/04/16/opinion/economy-inflation-retail-sales.amp.html
    embedded inflation, which is the kind of inflation we really need to worry about, is inflation in prices that don’t change very often.

    etc.
  • With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's

    The Economist: “House prices were included in America's CPI between 1953 and 1983 before being removed. This was partly because indexing benefits and pensions to inflation had become expensive and some politicians wanted to bring measured inflation down”
    Source:
    Here's a Monthly Labor Review (MLR) piece written contemporaneously (June 1982) with the announcement (late 1981) of the change in how housing costs would be included in the CPI.
    https://www.bls.gov/opub/mlr/1982/06/art2full.pdf
    Government expenditures, though not mentioned in the paper, could have been part of the reason for the change. As stated in The Economist, that would be strictly a data driven decision, i.e. based simply on the fact that housing prices were rising rapidly.
    The MLR piece notes that there had been a recent statutory change in how government revenue would be affected by inflation. That change called for a more accurate CPI calculation:
    In addition to problems of data adequacy, impetus to change the homeownership component stems from an important new use of the index. The Economic Recovery Tax Act of 1981 (Public Law 97-34) requires use of the CPI for All Urban Consumers (CPI-U) for escalation of income tax brackets and the personal exemption amount. The law requires announcement of the new tax brackets in December 1984 based on CPI-U data for the prior 2 years. This is a major new use of the index which will have a broad effect on total Federal Government revenues, and this new use underscores the importance of action to ensure that the CPI reflects consumption cost experience of consumers to the fullest extent possible.
  • With housing factored in, inflation’s running at 10% - Randall Forsyth in Barron's
    I thought reading the article that Forsyth was saying (in roundabout fashion) that if housing was still included in the CPI today (as it was until 1983), than today’s inflation would be approaching the level of the 80s.
    The Economist: “House prices were included in America's CPI between 1953 and 1983 before being removed. This was partly because indexing benefits and pensions to inflation had become expensive and some politicians wanted to bring measured inflation down”
    Source:
  • Market valuations
    Here’s a colorful (albeit slanted) blurb from this week’s Barron’s under the title “The Striking Price: A Smart Trade for Heady Times” - by Steven Sears
    “Now, almost 100 years later, the market construct has seemingly changed. The shoeshine boy's figurative heirs have grown rich buying stocks, digital currencies, and other risk assets … The S&P 500 index just hit another record high, and activity has reached a fever pitch. The options market, which enables investors to magnify their stock bets at relatively low cost, has seen daily trading volumes rise to about 40 million contracts a day, up from maybe a million in 2000.”
    Barron’s 10/25/2021
    * Represents the views of one contributor. The publication contains both “bull” and “bear” case analyses.
  • Green investments
    Yes, that's it. Fidelity's EV and Future Transportation ETF. You can find the its daily holdings here (click on the Daily Holdings Report tab).
    Though we don't quite know what's in the index it tracks, since the index is proprietary and the fund "Normally invest[s] at least 80% of assets in securities included in the Fidelity Electric Vehicles and Future Transportation Index℠ and in depositary receipts representing securities included in the index."