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Pimco's Ivascyn Says Time To Cut Risk In ‘Fragile Situation’
So let's have a conversation regarding "risk off" investments...Dan. This article seemed thin on suggestions. I'll give it a try.
If, Fed raises rates 2-4 times... US bonds will suffer. Options: -Bank Loan Funds -Non-US Bonds (that hold local currency risk as well country / sector risk) -Laddered CDs (that hold liquidity risk & inflation risk) -High Interest rate MMFs (cash)...FZDXX has been mentioned her at MFO
Geopolitical Conflicts: Options: -Gold (that hold currency risk) -LT US Treasuries (that hold interest rate risk)
Over Priced Equities: Options: -Identify Under-priced US Equities - NR, Energy, Utilities, Financials,etc. -Hold equities or sector funds that have exhibited better downside risk such as Healthcare -Own cash heavy mutual funds who know how to deploy cash when valuations are favorable -Own risk managed Funds verses Index funds -Own Equity dividend payers and live off the dividend until growth resumes -Own quality stock companies with strong fundamentals who can buy distressed competition -Own Global Equities with Low CAPE Ratios - Russia, South Korea, etc. -see more here ...Global CAPE (Country by Country): https://starcapital.de/en/research/stock-market-valuation/
Is PONDanX suggesting we light up on PONAX? -As a smart income fund manager wouldn't he navigate this better than you or I. I would hope so, but he gives no clue as to his present strategies...more like, "women and children first!" Wish he was more constructive.
It's times like this where I am reminded of the virtues of PRPFX.
Maybe another reason for market concern is discussed here in this post:
The point of that historical lesson which we should remember in the current moment is that having the Fed reduce the size of its balance sheet carries an enormously powerful effect on banking system liquidity. My expectation is that by sometime later this summer, the FOMC is going to realize that its reduction of holdings of Treasuries and MBS is creating a big liquidity problem, and they will abandon or curtail those plans. But it is going to require a lot of damage to the stock market to get them to realize what they need to do. I expect that realization to hit them sometime around August 2018, and it should lead to a huge stock market rebound into year-end. But it will be a rebound from a big selloff.
I guess these things are ignored as problems until they aren't. The island is full of old infrastructure, lack of titling, political corruption, and more landmines (risks) than I want to own individually.
I do own PONAX, so I hope that PR rum, salsa music, and mofongo is part of Dan's next shareholder meeting.
Thanks Bee! Now I must get my fufu in gear and find or create some mofongo. As for Dan, I'm just going to let him do his thing and stay out of his way. I'm just happy I get to ride along.
Come on guys. Ivascyn chose a time to do it while markets are in turmoil. This way later, he can say "I told you so", or "in spite of challenging markets, blah blah, our fund performed better blah, blah, blah". Same reason anyone does anything.
Why does mutual fund manager have to blow his horn. Just explain to your shareholders in your annual report.
I switched from Pimco Total Return to PIMIX awhile back. It is not likely Ivascyn is running short ideas to invest, but he is facing headwind of several more rate hikes. According to M*, PIMIX is already has a duration of intermediate term bonds. What else he can do to generate extra alpha over US Agg bond index?
Comments
If,
Fed raises rates 2-4 times... US bonds will suffer.
Options:
-Bank Loan Funds
-Non-US Bonds (that hold local currency risk as well country / sector risk)
-Laddered CDs (that hold liquidity risk & inflation risk)
-High Interest rate MMFs (cash)...FZDXX has been mentioned her at MFO
Geopolitical Conflicts:
Options:
-Gold (that hold currency risk)
-LT US Treasuries (that hold interest rate risk)
Over Priced Equities:
Options:
-Identify Under-priced US Equities - NR, Energy, Utilities, Financials,etc.
-Hold equities or sector funds that have exhibited better downside risk such as Healthcare
-Own cash heavy mutual funds who know how to deploy cash when valuations are favorable
-Own risk managed Funds verses Index funds
-Own Equity dividend payers and live off the dividend until growth resumes
-Own quality stock companies with strong fundamentals who can buy distressed competition
-Own Global Equities with Low CAPE Ratios - Russia, South Korea, etc.
-see more here ...Global CAPE (Country by Country):
https://starcapital.de/en/research/stock-market-valuation/
Is PONDanX suggesting we light up on PONAX?
-As a smart income fund manager wouldn't he navigate this better than you or I. I would hope so, but he gives no clue as to his present strategies...more like, "women and children first!" Wish he was more constructive.
It's times like this where I am reminded of the virtues of PRPFX.
I read recently that many of the PR FEMA claims could not process because the lack of legal titling of property in PR... it's a wide spread problem there.
unable-to-prove-they-own-their-homes-puerto-ricans-denied-fema-help
I guess these things are ignored as problems until they aren't. The island is full of old infrastructure, lack of titling, political corruption, and more landmines (risks) than I want to own individually.
I do own PONAX, so I hope that PR rum, salsa music, and mofongo is part of Dan's next shareholder meeting.
By the way I missed the last one. How was it?
Why does mutual fund manager have to blow his horn. Just explain to your shareholders in your annual report.
Why we jump when someone says jump?