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Lightened up a tad

Howdy folks,

Lightened up a bit today. With our Price accts, Took wifey from ~15/42/42 to 10/45/45 (equities/bonds/cash). In my case, my account is split between a static asset allocation portion and my brokerage portion. Because my brokerage portion is fairly heavy with various and sundry equities, I moved quite a lot of my static portion from equity funds to cash and bonds. In both our cases, the bond money went into their inflation protected bond fund PRIPX. Now in my case, I'm at about 25 equities, 20 pms, 25 bonds and 30 cash. The pms are mostly junior silver miners but also SLV, SIL, SILJ and GDXJ, and CEF.

and so it goes,

peace, and flatten the curve,

rono

Comments

  • Thank you for the update. What do you use as cash?
  • edited June 23
    thank you sir...great advise Rono

    We are still 90/10...here for at least another 15-20 yrs then maybe change to heavy based incomes/bonds /cash Portfolio

    Get ready for 2nd crash from virus?
    First wave never ended imho since not many folks hunkered down and stay home as suggested by Healthcare experts recently. Numbers keep rising

    Herd immunity mentality maybe the new norms

  • edited June 23
    Thanks @rono. Interesting summary.

    I sold off some of my mining fund today (OPGSX). Had a good run-up since March. Gained 3+% Friday alone and over 4% today. Lobbed off about 25-30% after it breached my own pre-set limits. Still high on gold longer term.

    "An ounce of prevention ... "
  • Howdy folks,

    Hi Paule. Nothing fancy, just US Treasury MM but I do use Spectrum Income as an 'almost cash' fund.

    hth,

    rono
  • edited June 23
    Lipper is showing OPGSX up 60.5% past 13 weeks and 40% for 1 year. Definitely feel like I’m doing a high wire act with this one. Maybe one market area where Tweety is having a positive effect?

    Edit - I blinked (sold some more). - “A bird in the hand ...” :)
  • Howdy hank,

    I recall the saying, 'you can never go broke taking profits'.

    r
  • Take profits but don't fight the FED-biggest manipulator of the stock market, Congress/Senate - stimulus, Republicans - tax break for the rich, US bank regulators - easing Volcker's rule etc. etc. etc.
  • Can't argue with that @kings53man. All it will take is Mr. Market to trend down 10% or so and it will be Congress and the FED to the rescue... again. In fact I believe Mr. Market plays them like a fiddle.

    That said, I've been trying to reduce the risk in my self managed portfolio over the past month or so. Schwab's portfolio check-up now has me at 47:23:13:18 (EQ, FI, cash and "other"). It's the 'other' that I have been growing. It consists of a gold ETF, IAU, which I've held for about a year and a half, and some new funds, MNWAX and TMSRX. Started a position in GAVAX also which holds quite a bit of gold and PM stocks too.

  • I played the “other” game from 2001-2007. Didn’t work well. I’d have to look but I had maybe 10-15% in PIMCO commodity, merger fund, Merk hard currency, DBR Currency. I may have included REITs in that category.
  • No silver bullets in this area folks... no silver bullets.
  • edited June 26
    Old_Joe said:

    “No silver bullets in this area folks... no silver bullets.“

    Yeah. That sums it up pretty well. On the topic of silver bullets, here’s what Phrase Finder has to say: “We now use the term 'silver bullet' to refer to an action which cuts through complexity and provides an immediate solution to a problem.”

    My offering comes from a 1785 poem by Scottish poet Robert Burns (translated to English):

    “But Mouse, you are not alone,
    In proving foresight may be vain:
    The best-laid schemes of mice and men
    Go often askew,
    And leave us nothing but grief and pain,
    For promised joy!”


    So . . . I think I know where this financial thing is heading. So does every other investor, money manager, financial columnist, media pundit, etc. I’’ll shade my investment approach a bit this way or that to try and take advantage of that larger picture if / when it unfolds. But be careful. Should you be wrong and lose a ton of money, time and circumstances might conspire to see that you never regain what’s been lost.

    There’s some slant money out there also trying to call where the various markets will go and what to buy / sell. I doubt any of them is dispensing free investment advice - at lest not until long after placing their own bets.

    17 Richest Hedge Fund Managers in 2019
    https://www.businessinsider.com/hedge-fund-billionaires-list-forbes-2019-3

    (Poet edited for brevity)
  • edited June 26
    Interesting reference (in the original post from @rono) re inflation protected bonds. There’s several smart folks now saying their valuations are attractive. I’ve looked at these long and hard. Still can’t get my head fully around them. The problem is that a fund like PRIPX will benefit from the inflation adjustments if inflation picks up, but would also experience a falling NAV as bond prices decline due to rising rates. Price’s TRBFX (limited duration TIPs fund) mostly avoids the risk of declining bond valuations, but hasn’t performed nearly as well.

    As a safe place to park $$, I think TIPS are a good choice. If you could trade in and out without incurring Price’s 30-day block, I’d move my TRBUX to one. But TIPS are restricted in that regard while their ultra-short bond fund isn’t.
  • Hi @hank
    Are you stating that a particular TRP Tips fund has trading restrictions or the etf TIP has a trading restriction within a TRP brokerage acct.?
    Thank you.
    Catch
  • edited June 26
    @Catch22, My reference re 30 day trading block pertained to the two inflation protected bond mutual funds I mentioned above: PRIPX & TRBFX. Based on past experiences, the block hasn’t affected ultra-short TRBUX. But since it’s no longer cited as exempt, I’ll need to look into whether it’s still exempted.


    - - Here’s the section from the Prospectus for PRIPX:

    “Subject to certain exceptions, each T. Rowe Price fund restricts a shareholder’s purchases (including through exchanges) into a fund account for a period of 30 calendar days after the shareholder has redeemed or exchanged out of that same fund account (the “30-Day Purchase Block”). The calendar day after the date of redemption is considered Day 1 for purposes of computing the period before another purchase may be made.

    General Exceptions As of the date of this prospectus, the following types of transactions generally are not subject to the 30-Day Purchase Block:

    · Shares purchased or redeemed in money funds;

    · Shares purchased or redeemed through a systematic purchase or withdrawal plan;

    · Checkwriting redemptions from bond and money funds;

    · Shares purchased through the reinvestment of dividends or capital gain distributions;

    · Shares redeemed by the fund to pay fund fees or shareholder account fees;

    · Transfers and changes of account registration within the same fund;

    · Shares purchased by asset transfer or direct rollover;

    · Shares purchased or redeemed through IRA conversions and recharacterizations;

    · Shares redeemed to return an excess contribution from a retirement account;

    · Transactions in Section 529 college savings plans;

    · Shares converted from one share class to another share class in the same fund; and

    · Shares of T. Rowe Price funds that are purchased by another T. Rowe Price fund, including shares purchased by T. Rowe Price fund-of-funds products, and shares purchased by discretionary accounts managed by T. Rowe Price or one of its affiliates (please note that shareholders of the investing T. Rowe Price fund are still subject to the policy).

    Transactions in certain rebalancing, asset allocation, wrap programs, and other advisory programs, as well as non-T. Rowe Price fund-of-funds products, may also be exempt from the 30-Day Purchase Block, subject to prior written approval by T. Rowe Price.

    In addition to restricting transactions in accordance with the 30-Day Purchase Block, T. Rowe Price may, in its discretion, reject (or instruct an intermediary to reject) any purchase or exchange into a fund from a person (which includes individuals and entities) whose trading activity could disrupt the management of the fund or dilute the value of the fund’s shares, including trading by persons acting collectively (e.g., following the advice of a newsletter). Such persons may be barred, without prior notice, from further purchases of T. Rowe Price funds for a period longer than 30 calendar days or permanently.

    Intermediary Accounts Intermediaries may maintain their underlying accounts directly with the fund, although they often establish an omnibus account (one account with the fund that represents multiple underlying shareholder accounts) on behalf of their customers. When intermediaries establish omnibus accounts in the T. Rowe Price funds, T. Rowe Price is not able to monitor the trading activity of the underlying shareholders. However, T. Rowe Price monitors aggregate trading activity”


    https://www.sec.gov/Archives/edgar/data/1181628/000075491512000009/IPB485b.htm


  • I recall the saying, 'you can never go broke taking profits'.
    @rono, did that several weeks ago and now seeing another leg down as pandemic situation worsen over several states - AZ, TX, FL, UT, and CA. Spending is up a bit as lockdown eases, but hiring is lagging badly. News are not all that encouraging.
  • What will the folks be spending when their unemployment checks run out? Where will the large number of unemployed folks find employment once the volume of companies/enterprises facing bankruptcy becomes a flood? I just can't see this getting better anytime soon.
  • edited June 27
    @Mark,

    What some business folks are telling me - as long as they’re getting those unemployment / stimulus checks many refuse to go to work. My builder says he can’t find enough workers, and all the suppliers up here are completely out of treated deck wood. Reason for that I’m told - workers aren’t showing up at the sawmills. So here, a new deck partially paid for with my stimulus check, has been in perpetual delay for over 2 months. I did ask at Lowe’s about the lumber shortage and they assured me that (at least for deck boards) “nobody has any“. Maybe a distorted view. Aren’t you in construction? Any trouble getting lumber and other materials?

    Sorry if I seem to be ignoring the pandemic and very real suffering. Not intended. I last spoke with my builder 2-3 weeks ago and things than seemed to be improving with many states reopening. Not the case now. Many states have gone into reverse. But it strikes me that at least in some cases the government payouts, while well intended, may actually be deincentivizing some workers and curtailing normal business activity.
  • @hank,

    Not seeing much of that here in MN. Wonder if it's a local phenomenon? We are just talking about treated deck boards right?

    We all know the stimulus was a one shot deal. Unemployment 'IS' more than regular wages for some workers and I don't know the fix for that. Maybe paying their workers a living wage to begin with?
  • Chop-Chop-Chop Millionaires got Stimulus - no body complains. Pub's complaining minimum wage workers with no Health Insurance not making LIVING WAGE not going to work. Economy needs to be OPENED so those lowly workers can go to work, damn the virus. Sorry I need my castle to be finished.
  • edited June 27
    Thanks @Mark. Builder normally buys what he can from Lowe's where he receives discounts based on total purchases and thinks their quality better than others in area. Judging by the many Google searches on “lumber shortage” many others across the nation can’t get pressure treated wood either.

    A recent story:

    The nationwide shortage of materials is caused by a manufacturer shut down and a building increase during COVID-19 months. The ending is unknown, so many people may have to wait to finish their home improvements. One builder in Pennsylvania says: “ No one foresaw this. Will I take another fence job right now? Probably not. We’ve driven down to Jersey, Delaware, all over PA. I’ve driven up to an hour away just to try and get materials to build a fence to finish it. Just can’t find materials anymore.”

    https://www.fox29.com/news/shortage-of-lumber-creates-issues-for-construction-projects
  • @hank; Did you give any thought to composite decking ?
    Derf
  • edited June 27
    Derf said:

    @hank; Did you give any thought to composite decking ?
    Derf

    No. Good composite is way more costly than treated wood. Same guy rebuilt the front deck with treated pine last year. Liked it so well I’m having a new smaller one added on one side of house. I only brought this up to try and show that the far reaching mpacts of Covid 19 on the economy can work in a lot of different ways. Think of builders here who have maybe 5-6 months of good outdoor weather not being able to buy the materials they need during peak building season to stay in business.

    Thanks for suggestion @Derf.
  • I have not needed many products at the lumber store this year, but I was unable to get simple plastic fencing to prevent our dog from walking in new-planted areas. The employee said a lot of products did not come in this year. I suspect stuff from China got hung up during the shutdowns.
  • We are having the same problems as Hank. We are having a covered porch glassed in. The contractor’s team is a total of 3 dudes - now one is out with Covid and one is out for a hernia and the contractor says he can’t find day laborers to replace them. Nothing has delayed our materials but the contractor says his other jobs are being delayed due to factory shutdowns.
  • Hi @hank
    You noted:
    "As a safe place to park $$, I think TIPS are a good choice. If you could trade in and out without incurring Price’s 30-day block"
    Not sure of your TRP account type, but if brokerage is included you can use the etf TIP, which is pretty much a mirror for total return to PRIPX going back to Jan., 2004. TIP has an 8% advantage over the entire time period of 16+ years. It appears TRP brokerage has a trading fee of $19.95; unless there is some type of special account. I'm not knowledgeable about this account aspect; nor how or what TRP has available for a T.I.P. investment as an etf or index.
    I agree that this area of bonds is of value, although not for the obvious reason (inflation). I'm sure these are purchased with this thought in mind by retail investors and large organizations.
    I consider this bond sector as more of a play for "flight to safety", as these are AAA bonds.
    So.....
    --- T.I.P's right now travel more with other Treasury issues.
    --- Many active managed TIPs funds maintain 10-20% in "other"....corp. bonds
    --- TIP etf's and indexes generally are 100% AAA TIP bonds
    --- TIP funds of any type many also include a variety of long, med. or short term
    --- if one wants pure T.I.P.'s, check what's inside
    *** always check the composition to understand the holdings
    *** TIP's funds have about a +6% YTD return and is a prime example that money can be made investing in bonds that have a negative yield.....PRIPX is about -2.2% and the TIP etf is about -5%

    Two Pimco TIP's etf's if you want to peek..... LTPZ and STPZ; as a compare to TIP to view how long/short term perform.

    Taxes may be a consideration for whomever. We hold these type of investments inside Trad/Roth IRA's.

    Getting late night.......I'll add in the morning, if I've forgotten something.

    LASTLY.....if the equity markets puck more this week from the COVID re-do, check each day to discover how well the etf, TIP performs. My money tonight bets, decent.

    The below link is just an overview (a rehash), and not dedicated to TIP's.


    Bond prices and yields


    Take care,
    Catch
  • edited June 29
    Thanks for the info @Catch 22. I might have helped avoid confusion initially by clarifying that my musings on the issue pertained only to holdings at T.Rowe - not TIPS generally. And my reference to “a safe place to park cash” was bit of a reach - as they do fluctuate in value.

    If, however, I were to move some of my presently small commitment to cash (under 10%) to a brokered TIPS ETF, the thought of paying a $19.95 fee every time I want to “add a tad more to this investment” or “pull a bit out of that one” is a game-stopper. That’s what’s nice about money market and some ultra-shorts - convenience, liquidity, free exchanges.

    Just wondering / At the current rates of income / payouts on TIPs how many $19.95 exchange fees it would take to eat up all their current annual premium over TRBUX or some other ultra-short on (as an example) a $10,000 investment?
  • Hi @hank

    Don't know why TRP needs such an expensive commission in this low fee world.

    No commissions at Fidelity and two decent, representative T.I.P. choices with the etf TIP (expense ratio of .19%) and Fidelity's TIP index with expense ration of .05%. Both fully invested in TIP's.
  • Hi @hank, that $19.95 is to trade inside the TRP brokerage, right? That is an amazingly high price to pay, especially since many brokerages now are no-cost per trade. Maybe it would be worth opening a small Schwab or Fidelity account for conservative holdings. Just a thought.

    Schwab actually has a pretty good TIP ETF, SCHP. I just started adding it to my short term (withdrawal) account last week. I did look at a few choices and there can be big differences in risk. For example, the 2 Pimco ETFs catch gave, LTPZ dropped -21%, STPZ dropped only -4% in March.
  • Hi @MikeM
    LTPZ and STPZ were part of the bond and credit markets lock up period in March; until the FED/Treasury stepped in to assist the thaw. All bond areas suffered for a period of time in March.
    LTPZ follows the long term bond area and has a YTD of +17.3%.
    Yes, long term bonds; as noted previously here are subject to the hot potato area, not unlike swings in the equity markets. Risk/reward is similar......just depends where one chooses to "play" at any given time.
  • Got it catch. No more hot potatoes for me:) Especially in a bucket I'll start withdrawals from sometime in the next year or 2.
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