Some divergence will be tolerated.

romroc

Yesterday I bought into trbcx, a blue chip fund. Not under 100 mill in capitalization, but my age and risk profile probably equate to buying-and holding this one. The manager has been at the helm since 1993. Coincidentally, am looking at prmtx, a sector fund. It has rocketship qualities, and I can use the fuel. I still have some small funds, may get into mscfx, but the bottom line is reliable performance long duration. And keeping principal intact is a must have. I gave at the office.

msf

Given your statements on keeping principal intact being a must, and using a rocketship sector fund, what ran through my mind were lyrics from an old Tom Leher song:

"'Once the rockets are up, who cares where they come down? That's not my department', says Wernher von Braun."

Be careful what you wish for, though it is a good fund.

Lyrics and video: http://www.lyricsfreak.com/t/tom+lehrer/wernher+von+braun_20138402.html

romroc

Good point. I am being careful. My son is being more careful. He just pulled all his money invested and switched everything to a money market. Market timing doesn't usually work out, so I'm eagerly watching to see what happens.

hank

Have used TRBCX & like it - but a bit high octane for these into-retirement years. Yep, PRMTX's been bit of a rocket over the years ... So, Son really thinks market's goin in the gutter before election? Can't buy that. Worry more about afterward. BTW, Price is good at showing in prospectuses yearly performance figures going back 10 years. Can be eye-opener. TRBCX - I'd venture a guess - has probably experienced years of 25+% on both the up and down sides, probably more than once - what I meant by high octane. Take care.

Checked it for ya. TRBCX Four most volatile past decade: 2002 -24%, 2003 +30%, 2008 -42%, 2009 +42%

http://quote.morningstar.com/fund-filing/Prospectus/2012/5/1/t.aspx?t=TRBCX&ft=485BPOS&d=59ede8f1d78accddfabc0a27db08704d

MikeM

Hi romroc. I have to agree with Hank. TRBCX isn't a fund I would have picked as conservative. It's a growth fund which puts it in a more volitale category to start with.

The TRP Equity Income fund would fit that bill a little better. PRBLX or YACKX are nice large cap funds with very good managers and lower volatility.

romroc

MikeM I will check out those two funds. I'm 62 and I have a 20 year time horizon. I know how that sounds. I read recently that some 80 plus year olds have the cortex of 50 year olds. Why should I give up the chase so early? The kids can wait.

hank, thank you for checking on the volatility. prmtx may be my next target.

My son is a banker at HSBC who thinks the market is set to tank. I don't know if he is right, but he even sold his bond fund. Presently he in a money market paying 3% so treading water is not such a bad thing for him. If he is wrong what will it cost him? He is still in his earning years, and for a long time to come. I know my son and he is never in a hurry. Did Werner Von Braun really say that--it seems rather heartless. I am assuming that the rocket could land in a tree killing birds--or worse.

scott

Reply to @romroc: "My son is a banker at HSBC who thinks the market is set to tank."

hmmm....

(Oh, and I highly agree with MikeM's choices a couple of posts up.)

AndyJ

Reply to @romroc: Just curious, romroc, but do you mean your son the banker thinks the stock market is about to tank, and if so, did he say why he then would be selling "his bond fund"?

Another lower volatility possibility, if you want to stay within the Price family, is PRWCX, Capital Appreciation, which is basically an aggressive allocation fund that's usually very heavy in stocks (but not right now - maybe in synch with your son's thinking!) and has a good long-term record. The schtick, more or less, is stock-equivalent returns with significantly lower volatility, and it's pretty much delivered on that strategy. I'd also do a 'me-three' on MikeM's suggestions as good choices.

hank

I tend to agree with your son - just think he's a few months early. Have learned not to trust my own predictions - so never all in or all out. For me, TRBCX makes a nice "leverage" fund when I want to increase market exposure. Just a little aggressive to sit in all the time.

romroc

My son thinks everything in the markets is no longer cheap, so not worth holding. He also expects inflation to rattle the bond markets if I understand him correctly. Some have said that the trouble in Europe must eventually come home to roost. I'm not necessarily in agreement, but I will say that the 'R' word for 2013 has been invoked recently. If that happens we need to head for the exits, but when I do not know, or have a clue. The mainstream media will not give out that sort of information, it's critical, but it's also a secret not to be shared with the general suckers, er, I mean public. I'm not trying to be incendiary here or cause a panic, my son did what he did, and I reported it. Thanks for all the advice on defensive holdings. I'm a crazy optimist. I think everything is fine, which it most definitely is not.

catch22

Howdy romroc,

A few comments based upon this: " My son thinks everything in the markets is no longer cheap, so not worth holding. He also expects inflation to rattle the bond markets if I understand him correctly. Some have said that the trouble in Europe must eventually come home to roost. I'm not necessarily in agreement, but I will say that the 'R' word for 2013 has been invoked recently."
>>>>> He is right about whether something is cheap or not. The bugger is attempting to determine what is overbought or oversold; except perhaps when using charting and relative strengths of whatever.
As to inflation and then the note about recession in 2013.......well, in the 80's and before our economy could have stagflation (commodity and/or wage price pressures while the economy is flat-ish). At the current point in our economy, the wage price pressure is pretty much gone and will likely remain, with exceptions in some particular work areas. The size and scope of the number of manufacturing jobs that drove wage prices in sync with some unions is about dust in this country; and technology will take care of the rest of the slack in these areas. If for some other reasons, some commodity prices could push on inflation, I suspect the American consumer will just push back, eventually; by changing their spending habits, as the low wages will force this upon them.
If the "R" would arrive in 2013; money will travel somewhere and my best thought is that some of the money would travel into investment grade bonds, being gov't or corporate.
Lastly, some of what the future will bring will be connected to the elections and whatever becomes of tax law changes. Some tax law changes could alter cash flows towards the muni bond markets.
Just my 2 cents, and of course, no reflection upon your son's investment choices.
Lastly, what type of a money market acct. is paying 3% these days, as you noted previously?
Take care,
Catch

Derf

? for romroc: Could you tell us the name of the money market thats paying 3 % ?

Derf

hawleyl

Howdy romroc,

Perhaps your son has been observing the sandbox described in

http://www.ritholtz.com/blog/2012/08/how-change-happens/

romroc

I'm sure many of you have heard that a certain Goldman Sucks economist [am I spelling that right?] has put out a warning to clients telling them to get out of stocks before the 12% collapse. First of all, it's no secret, obviously spreading the fear among clients also assures that everyone who has their ears on is going to hear the gossip. Second, what is the catalyst? Money is cheap in all respects, inflation low, a perfect time for stocks to go up, and many have done just that. Pent up demand among those unfortunate enough to not have work or compromise work, keeps the string pulled tight. There is political uncertainty, who is in charge is rather important, government spending is out of control, and the outcome come November is far too early to call. Is it prudent or accurate to try and predict disaster right about now, or is the backfield in motion? Remember, Goldman was the one selling a product while they were busy dumping it themselves behind closed doors, giving their customer risk choices, translation, sucker bait. shall we trust them this time?

I'll ask my son for further clarification. Meantime, consult your favorite occultist for market direction. Some use darts.

romroc

My son declines to comment as to the source of his money market exposure. I believe it to be a perk granted by his employer, HSBC. Rank has its' priviledges, as they say. He is out the the market, says that it is too risky per the potential gains, both stocks and bonds.