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Something/someone is playing hard ball today. Threw in the gold thing'ys just because. TIP -0.86%
LQD -0.69%
IEF -0.71%
CEF -1.34%
GDX +0.22%
IWM -1.41%
XHB -1.12%
IYR -2.12%
HYG -0.47%
EMB +0.06%
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PETDX=down(-3.73%)
VNQ=down(-2.43%)
TOLSX=down(-2.07%)
Interestingly,
GDX= up (1.43)
So, maybe the trade when "QE infinity" ends will be to sell Real Estate, buy Precious Metals and Mining...just a different kind of real estate in my mind.
Also,
How did these two funds dodge the bullet?
WAEMX = 0.00 (EM Small Companies)
PYEMX = 0.00 (EM Bonds)
David Fuller's comment (Fuller Money Newletter):
"The Fed has told us that they are looking at the unemployment rate as one of their key objectives for improvement. They have also told us that they are aiming for a higher inflation rate in order to confirm their victory over deflationary pressures. At present neither of these objectives has been achieved to their satisfaction but progress has been made.
Let's not forget that the housing and credit bubbles were at least in part fuelled by the Fed's failure to withdraw stimulus quickly enough as the economy recovered after the Nasdaq crash. They will be keen to avoid a similar mistake on this occasion. Considering just how large the monetary accommodation has been Mr. Bernanke is obviously wary of leaving a sea of liquidity run unchecked when growth returns to a self- sustaining footing. It is therefore logical that the scale of accommodation be tailed back as the economic outlook improves."
Now, if we were having this conversation 40 years ago today; when I was in Morocco, I'd have to ask; what ya' smok'in? Forty years ago in Morocco, QE for me = "Quiet Enlightenment".
Take care out your way. Supper done here. A bit more work time and then sit upon my arse.
Catch
Perhaps today is a preview of coming market attractions, as one may suspect that equity prices will not perform any better than bond prices when the money flood plug is put in place; as about the only areas that may be a deal or undervalued today are commodities and metals. I will also include my daily values at the local Kroger store where 1 gallon of milk remains at $2.49 (lose leader) and 1 dozen eggs, remain bargains.
I did happen to know a little bit about Mr. B's speech while having a bit of a food break here. Apparently the hot/big money traders are a bit itchy at this time.
Take care,
Catch
As was noted in the original post, not many friends for most funds today.
Only 2 Fido funds were positive today:
--- FEMEX +.33%
--- FSAGX +.54%
--- FUSFX flat
I suspect most market areas will not be happy for any reason when the Fed. begins the unwind. The central banks are obviously still very afraid of no growth and fighting out of a deflation cycle.
Perhaps this house should just go to cash for this summer/fall and we won't have to wonder about any up or down.
Take care,
Catch
PETDX, as bee says, down 3.73%
but, it seems like the biggest other hits were:
SMCWX: American Funds Smallcap World Fund: -1.00% (up 15.5% ytd)
ANEFX: American Funds New Economy Fund: -1.18% (up 19.1% ytd)
ACMVX: American Century Midcap Value: -1.11% (up 16.8% ytd)
GASFX: FBR Fund Advisors: -1.6% (up 18.4% ytd)
Where the heck is the pattern there?
Other than WAFMX (up 0.32%) everyt other equity fund went down, but less than 1%.
In the bond area, all down (even PONDX) except for two: AHITX, American Funds High Income Trust, and RPHYX, Riverpark Short Term... those two broke even.
Note: the ytd figgers may be a little off, as those come from M*, and I haven't updated those yet.
In sum, the whole shebang down 0.70% today vs 0.83% for the S&P. That ratio is a little unusual, as usually my stuff has about half of the volatility of the S&P. Probably because the bond sections of the balanced funds and most of the bond funds themselves were down as well as the equities. YTD, up 10.5%... absolutely no complaints.
MJG's.....no. Been too busy here. Just peep'in once in awhile.
I'll look through the threads later. Is there some critical data/info I missed with the post?
Thanks,
Catch
WAFMX...Whatta fund performance this year...up 50% (1 Yr)...if this keeps up I might have enough for a vacation to Nigeria to see first hand what's their secret.
Sell in May and go away does not hold in the current environment because a) even greatly reduced equity returns are better than current cash returns b) recent momentum studies show positive momentum can be sustained over months -- even summer months
c) the old adage comes from a time when it was plausible to talk about major players dialing it down for the summer -- since institutional money rules now, the major players don't take vacations.
There were other points, too, and of course rich citations and references. But this is what I got out of it.
For the day ... Skeeter down -0.37% , my boggey (Lipper Balanced Index) down -0.67%.
Year-to-date ... Skeeter up 8.9%, my boggey (Lipper Balanced Index) up 8.6%.
For the Sale In May strategy ... I've already rightsized my portflio. MJG had some good points but one of the items that I feel important is the corporate revenue landscape issue. You'd think if things are improving like being said by many then the corportate revenue landcape would be too. Seems to be lagging for some strange reason, perhaps consumption is down. From my perspective, the rally has limited legs and perhaps a false bottom. Historically, stocks have been soft during the summer months and with this we still have the rest of May, June, July and August to transverse.
Currently, my equity allocation is about 40% of my portfolio which is in the low equity allocation range for me. A high range would be around 60%.
I wish all Good Investing,
Skeeter
I appreciate your summary. Sell in May this year may not apply; but perhaps another month this year. The equity market is currently too rich for my liking; so no adds at this time.
Take care,
Catch
This market is totally flaky, and I think that it could do ANYTHING, for just about any reason. In particular, I'm very nervous regarding Ben Bernanke not staying, and thus a huge fight over his replacement and the possibility of the "NO" party leaving the Fed rudderless rather than agree to accept Obama's nominee.
I doubt that MJG's study factored that variable in.
Regards- and thanks.
OJ
http://www.calculatedriskblog.com/2013/05/thursday-new-home-sales-weekly.html
"7:08 AM The Fed trots out St. Louis' Jim Bullard who says it's been awhile since the FOMC discussed an exit from QE, and he doesn't think the group is about to start talking about it anytime soon. In fact, making Mr. Bullard nervous these days is inflation that is too low. S&P 500 futures are well off the lows, now -0.7%. Comment!"
http://seekingalpha.com/currents/all
It's all MOPE - Management of Perspective Economics.
My note from yesterday, May 22; just a few posts below:
"The central banks are obviously still very afraid of no growth and fighting out of a deflation cycle."
'Course, expected growth numbers (GDP's) have been in place for many years. The econ kids, congress folks and business people have these "magic" numbers in their charts and graphs. Problem is; perhaps there does not need to be ongoing growth that "needs" to be 3-5%/year. Why couldn't an averaged 1%/year be acceptable.
Yes, there will always be sectors where growth is higher; and of course, no growth and dying sectors, too.
So, the central banks and other "concerned" citizens continue to fight to push against the economic string that lays upon of the table of growth.
The unwind is not yet finished, in my opinion; and I expect the central banks are fully aware of this and have a few charts and graphs that they do not choose to share with the public at this time. These will be available in 5 years, for the history books.
Lastly, not sure what others read into Mr. B's testimony on Tuesday or other Fed statements. Maybe the big/hot money is just looking for a word twisting and perverted excuse to take some profits and run.
Take care,
Catch
As I mentioned above, I absolutely believe that the "No" party is quite capable of risking total economic disintegration by introducing an extended period of economic uncertainty rather than accept president Obama's nominee to replace Mr. Bernanke.
That possibility alone is making me lean towards taking the money and running. Over 10% ytd in this economy has provided quite enough gain to pay for our current home remodeling. Seems to me the odds at this point favor either minimal additional gain or even a possible loss, at least short-term. I realize that this likely shoves me over the line as far as qualifying for the Luddite demerit badge, but there you are.
Regards- OJ