Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Simply stated ... There are few places to hide as the markets reprice. For bonds this is because of the FOMC interest rate increase campaign and for stocks it is because corporate earnings and revenue growth are peaking or have peaked. Thus, this now justifies a repricing of assets. We are about to discover if the financial wizards can now manage this storm. Watch for the FOMC chief wizard's forth coming statement following their December meeting. I wonder what the Plundge Protection Team is up to? Interestingly, the Fed chief is a member of this team.
If they kill the goose that lays golden eggs (stock market) then they will stifle consumer spending; and, the consumer is the biggest part of the economy.
So what is it going to be? Time to go see if I can figure this out beforehand. My logic and their logic might not be the same; but, I'm thinking they will stand pat or at least say that they are going to be more data dependant after the December bump.
Since 10/1, equities are off 8-14%, HY -3%, IG -1%, while IOFIX, even after yesterday’s move, is -1.0%. Hopefully [IOFIX] can get that back soon.c
IOFIX got some of that (4c) back Wednesday. If Tuesday's dump was in the mode of the usual pattern of repricing (every 3m, the last week of the second month of the quarter), it came a week early. From here to the end of Nov. may be kinda enlightening.
The primary allure to IOFIX was its amazing trend persistensy with little to no drawdown / ability to get overbought and stay overbought months at a time (14 day RSI in the 90s). That all went out the window Tuesday with its largest daily decline in its short history, Not so sure it was some quarterly reset as several funds in the non agency category had out of the ordinary declines that day ala RCTIX and DPFNX. Even PIMIX got hit that day from its legacy non agencies.
I had posted elsewhere before Tuesday that FMPXX was my largest holding. It is now 100% my only holding. I can live with its current 2.31%/2.34% yield. If this was much ado about nothing with the non agencies will be using BDKNX but never again IOFIX. Maybe even CADTX albeit much of its YTD performance was from one day. I won’t expose myself to any bond fund in a bull trend that can tank 1.29% in one day. As an aside, I am hoping the pundits ( too many to name) finally get it right and there is a debacle brewing ( or already upon us) in junk corporates and bank loan funds.
Darn, Junkster, you play around only with the institutional versions? Big-time player.
I had sold 90% of my IOFIX a few weeks back, and today I sold that last 10%. Not sure what comes next, so sitting in cash (FZDXX).
Eyeballing RCRFX (RCRIX). RCRIX has been really steady, and the retail version is new.
Big time player? I wish. More like a small time player who is old enough to have accumulated enough and more for the institutional shares. Very early January may set the tone on where to be in Bondland for 2019. Maybe the formerly crowded trades such as PTIAX and PIMIX will return to the fore?
Adding to @Junkster and his note about the (14 day RSI in the 90s). The "teal" color at the top of this chart is the RSI section above the 70 number. One finds the available range of 100 (overbought, too hot to handle/buy) to 0 (oversold, dying or dead) for a FULL RSI scale.
--- A more typical chart for a well performing fund, being FSMEX, and one will see the periodic moves above the "70". I reference this particular fund for its long term performance overview and typical bumps in the road. The 10 year annualized = 19.3%.
I mentioned earlier it spiked in August. Now it spiked down. If it hadn't done either, it is not too hard to see the NAV would land where it is today.
I don't own this fund but I can't understand suddenly and only when fund drops like this there is a lot of analysis and speculation about it, while it is no problem when a fund spikes - no one asks why it could have, we just celebrate.
Junkster said: "Very early January may set the tone on where to be in Bondland for 2019. Maybe the formerly crowded trades such as PTIAX and PIMIX will return to the fore?"
Junkster, So you are hopeful that the Fed announces they will stop raising rates QUARTERLY after the late Dec-2018 hike? Seems to be 2 different schools of thought on that topic right now. I think the Fed is likely to continue raising rates all next year (3x or 4x in 2019). Asset bubbles will continue to "lose air." Its overdue.
Junkster said: "Very early January may set the tone on where to be in Bondland for 2019. Maybe the formerly crowded trades such as PTIAX and PIMIX will return to the fore?"
Junkster, So you are hopeful that the Fed announces they will stop raising rates QUARTERLY after the late Dec-2018 hike? Seems to be 2 different schools of thought on that topic right now. I think the Fed is likely to continue raising rates all next year (3x or 4x in 2019). Asset bubbles will continue to "lose air." Its overdue.
Just the opposite. I would be ecstatic if the the Fed raised three or four times in 2019 and for several reasons. I personally don’t think they will but I never trade or invest on opinions, especially my own - just the action of the market. I rarely trade/invest in multi sector funds the ilk of PIMIX/PTIAX anyway. Just that they don’t seem to be overcrowded trades like they were going into this year.
Comments
Derf
Since 10/1, equities are off 8-14%, HY -3%, IG -1%, while IOFIX, even after yesterday’s move, is -1.0%. Hopefully [IOFIX] can get that back soon.
c
If they kill the goose that lays golden eggs (stock market) then they will stifle consumer spending; and, the consumer is the biggest part of the economy.
So what is it going to be? Time to go see if I can figure this out beforehand. My logic and their logic might not be the same; but, I'm thinking they will stand pat or at least say that they are going to be more data dependant after the December bump.
I had posted elsewhere before Tuesday that FMPXX was my largest holding. It is now 100% my only holding. I can live with its current 2.31%/2.34% yield. If this was much ado about nothing with the non agencies will be using BDKNX but never again IOFIX. Maybe even CADTX albeit much of its YTD performance was from one day. I won’t expose myself to any bond fund in a bull trend that can tank 1.29% in one day. As an aside, I am hoping the pundits ( too many to name) finally get it right and there is a debacle brewing ( or already upon us) in junk corporates and bank loan funds.
I had sold 90% of my IOFIX a few weeks back, and today I sold that last 10%. Not sure what comes next, so sitting in cash (FZDXX).
Eyeballing RCRFX (RCRIX). RCRIX has been really steady, and the retail version is new.
3 year IOFIX chart
--- A more typical chart for a well performing fund, being FSMEX, and one will see the periodic moves above the "70". I reference this particular fund for its long term performance overview and typical bumps in the road. The 10 year annualized = 19.3%.
3 year chart, FSMEX
I suspect that Junkster will agree that the IOFIX chart and the implication is very exceptional to the rule.
Regards,
Catch
http://schrts.co/WwJmK5
I mentioned earlier it spiked in August. Now it spiked down. If it hadn't done either, it is not too hard to see the NAV would land where it is today.
I don't own this fund but I can't understand suddenly and only when fund drops like this there is a lot of analysis and speculation about it, while it is no problem when a fund spikes - no one asks why it could have, we just celebrate.
"Very early January may set the tone on where to be in Bondland for 2019. Maybe the formerly crowded trades such as PTIAX and PIMIX will return to the fore?"
Junkster,
So you are hopeful that the Fed announces they will stop raising rates QUARTERLY after the late Dec-2018 hike? Seems to be 2 different schools of thought on that topic right now. I think the Fed is likely to continue raising rates all next year (3x or 4x in 2019). Asset bubbles will continue to "lose air." Its overdue.