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Barron's on Funds & Retirement, 2/10/24

This ad-hoc feature returns this week with several related stories. LINK1 LINK2 BarronsLINK

FORSYTH is a fan of CEFs at discount. He now likes muni MYD, VFL, LEO; options-writing equity GDV, ECF, AOD, AGD; term-trusts FTHY, BSL.

FUNDS. Cash/cash-equivalents won’t be attractive for long. Consider extending maturities with ultra-, short- and intermediate- term bond funds (ICSH, MINT, JAAA; BSV; BND). Multisector bond funds (OSTIX, TSIAX), and dividend-stock funds (VYM, XLV).

FUNDS. Thematic AI-ETFs are hot now, but those may include all sorts of related techs: BOTZ, AIQ, TECB, IGPT, CHAT, etc. Be aware that tech ETFs QQQ, XLK, etc have related tech exposures; SP500 (IVV, VOO, SPY) is also heavy in techs.

Q&A/Interview. Alesia HAAS, Coinbase/COIN CFO. The US-based Coinbase has been very volatile. It ran up on the excitement related to the SEC approval of several physical/spot-Bitcoin ETFs (iShares IBIT, Fidelity FBTC, Grayscale GBTC, etc), but then sold off when investors became concerned that its new Bitcoin ETF custody business was a low-margin business that may hurt its retail business. COIN has diverse businesses – exchange, broker-dealer, custody; recent rate hikes helped with higher interest income. It has also increased its global presence. The legal fight with the SEC continues. These new Bitcoin ETFs will appeal to institutions, pension funds, RIAs. This will be a long-term positive for the industry, and for COIN, despite some short-term concerns. Congress needs to pass new crypto legislations, but it has been bogged down with other pressing matters.

RETIREMENT. Homeowners may tap home-equity loans (HELOCs). Typical rates are variable, now around 9.27%. Beware of teaser rates and conditions that may trigger credit line reduction or cancellation. Of course, it’s a loan that has to be repaid, so discipline is required.


In this expensive market, consider DIVIDEND-paying stocks. Only funds are mentioned below, but several stocks are also included in the article.
Consumer-Staples: XLP
Financials: XLF
Real Estate: VNQ, XLRE
Utilities: XLU, UTG
Foreign: IEFA, IEMG
Cash-Equivalents: in limited amounts.

Variations of BENGEN’s (1994) 4% initial withdrawal with COLA are discussed. Bengen himself says that 4.7% w/COLA is fine now; some advisors say that 6% w/COLA but annual monitoring may work. Others say to skip COLA in down years. Another variation is to just take 4% of the yearend balances – it removes the SOR risk, but annual withdrawals may vary widely. Immediate-annuities transfer longevity risks to insurance companies for fees. Keep in mind that increasing RMDs are also required from T-IRA and 401k/403b; Roth Conversions will reduce the RMDs.


  • edited February 10
    +1 Nice summary Yogi. Loved the vinyl record used as Forsyth’s (CEF column) photo-piece, representing a type of investment that’s “out of style” today.

    ISTM Forsyth probably understands CEFs well. A bit over a year ago he recommended BCAT and GUG in a column - along with several others that were beaten down and heavily discounted. I bought those two & mentioned them in a post here about then. Made some $$ - but sold both way too soon. Rieder’s BCAT especially was helpful to the bottom line in ‘23. Being a scavenger, I wouldn’t buy them today. Forsyth’s 2 picks this week at GAMCO look interesting - but too dicey for myself.

    As utilities are mentioned in Yogi’s Barron’s recap, I’ll note that FSUTX (Fidelity Select Utilities) is down nearly 5% early in the year. I don’t own it, but curious what’s knocking the utilities sector down? Possibly related - Value and other safer-havens are having a tough time this year as money chases the Mag 7 higher and higher .

  • edited February 10
    @hank I've searched for individual YOOTs. Valuation as measured by P/E are never in the same neighborhood as other value stocks. Guess there's lots of overhead, maintenance of wire lines and shrub and tree-branch cutting to be done. (Unless you just don't care, like PG & E.) Very "busy" that way. I've not bought one. Further, they are typically regulated pretty tightly, though I note that Regulators all seem to cave-in to demands from those Yoots. Reminds me of my teen years, when scum-hole Billy Bulger (brother of Whitey) "served" as Insurance Commissioner in MA. They'd come to him and he'd always just say: "sure, go ahead. Charge people more. Makes no difference to me. Will that be enough for you?"

    Fred Gwynne, My Cousin Vinny: "What is a yoot?"
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