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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.

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2022 YTD Damage



  • edited September 2022
    sma3: I don't understand why fund managers stay locked into positions like this, especially for "conservative" funds.

    Maybe most of them don't have hedging in their prospectuses, or, as Jeremy Grantham is fond of reminding us, if they're not running behind their peers, they don't worry too much about it. I agree, it's not exactly the best thing to do to stay all long in a selloff like this has been, since January, with the pop of the mother of all bubbles.
  • For this strange week-long June-low-test to fail, Nasdaq Comp has to close below 10,646 and R2000 below 1,650.
  • edited September 2022
    Thanks. For the rest of us, since I had to look up, for reference, today's close are 10,737.51 and 1,674.93, respectively. Less than 1% and 2%, respectively, above June lows.
  • edited September 2022
    If the Nasdaq Composite and Russell 2000 close below June lows in the near future,
    what does that portend for markets and what is the reasoning behind this?
  • @Observant1, most low-tests fail like waterfalls with all major indexes collapsing on the same day or the next day. But this week+ long low-test is like water-torture. It started last week on Thursday and here we are a week later, and only DJ Transports, DJIA, SP500 have breached their lows by small amounts. If things were more normal, the more volatile Nasdaq Comp and R2000 would have been the first to breach their lows but they are quite resistant this time (although their hi-to-lo declines are larger).

    One can read this in 2 ways.

    First, that low-test may still fail. Then, there is quite a bit of underlying strength in the market.

    Second, the last leg of decline is yet to come and that would be when Nasdaq Comp and R2000 are also taken down. Where would that go? SP500 3,500? 3,000?

    Reasons can be found to support either scenario.

    What is important for me is that I can add some to equities, but I want the above to be resolved one way or the other.
  • Hi @yogibearbull

    Strictly my humble opinion; but observing Wednesday's big positive pop in equity and bonds, shows me that there is a lot of money looking for the right excuse to buy.

    OR perhaps the very large trading houses used the whack world of what took place with England's monetary policy Monopoly game currently being played.

    Surely the strangest mix of events since the beginning of the year that I've know to affect investing in so many areas.

    Note: the best and brightest of traders have more money than they know where to place every day. The remainder of patient.
  • @catch22

    you said..."be patient"

  • edited September 2022
    My jesting a few days ago (in response to @Derf’s question) about heaving the ship’s deck furniture and than lifeboats into the boiler to keep the ship sailing had a practical intent - possibly overlooked. The point was - as an investor’s ready cash on hand to add to riskier assets dwindles, the eventual last resort is to cannibalize other assets which are down less, selling them to buy riskier assets. Might be bond funds, allocation funds, long-short funds, an energy stock - anything thar’s still above water or has fallen less. Should the downturn last for many years, one might end up 100% weighted all in the growthiest stocks. This is not advice. It may not even make sense to most. A similar path worked for me in the ‘07-‘09 period. That was, however, by historical standards a somewhat short bear market. And, personally speaking, my time horizon was considerably longer then than it is today.
  • edited September 2022
    It's over! The end of awful week, month and quarter, as well-put by CNBC.

    June-low-test has also FAILED.

    Nasdaq Comp sank past its June low (10,646) to close at 10,576.

    What about R2000 still hanging at 1,665, slightly above its mid-June low of 1,650? Well, 4 of the 5 major indexes are now decisively below June lows, so R2000 is the odd ball. MOREOVER, better SC indexes such as IJR, SLY are now below their June lows.

    Get ready of a down leg in seasonally bad October. But November offers hope as good seasonality kicks in Nov 1 - April 30.

  • edited October 2022
    @yogibearbull, as different equities are making new lows, sentiment wise, the market pundits who are bears and bulls are coalescing - Mike Wilson is starting to talk about getting closer to the bottom (and not getting more bearish) and Marko Kolanovic today seems to be looking for cover. Let us hope we are in a cyclical bear market and not in a change of regime to a new secular market.
  • Rough year for sure. Perhaps one silver lining is for Roth conversion at the market low.

    CDs and treasuries are climbing every week.
  • edited September 2022
    PRSIX (“T. Rowe Price Conservative Allocation Fund”) is down 17.14% YTD after today. A good bell-weather to watch. I’ve followed it for years and have always admired the firm’s demonstrated management prowess. It’s highly unlikely the folks at TRP have started taking “stupid pills”. So, other thoughts might be entertained as to why that fund suddenly fell out of bed in the course of a short 9 months. Might be some lessons there …
    Sven said:

    Rough year for sure. Perhaps one silver lining is for Roth conversion at the market low.

    Yup. It’s called “making lemonade out of lemons”. :)

  • I added to PRWCX today - my default fund. Need to do some fund research over the weekend.
  • BaluBalu said:

    I added to PRWCX today - my default fund. Need to do some fund research over the weekend.

    good choice. i just can't add anymore. it's 37.56 percent of my total, already.
    suggestion: BRUFX. it's even down a little bit less than prwcx, ytd.
  • @crash, Thanks for the suggestion and congrats on your port’s PRWCX size. I have a lot more room in PRWCX. BRUFX $ 500m AUM is very enticing but the constant redemptions gives me a pause.
  • Opened a position in BIVIX which has been on fire this year. I'm hoping the fire isn't a flash in the pan
  • BaluBalu said:

    @crash, Thanks for the suggestion and congrats on your port’s PRWCX size. I have a lot more room in PRWCX. BRUFX $ 500m AUM is very enticing but the constant redemptions gives me a pause.

    Maybe check out MAPOX:
  • I've always been an advocate for 'balanced funds'; having held such things as FBALX, MAPOX, FPACX, JABAX, and PRWCX, but, Imo, the traditional 'balance' is no longer there; what with both bonds AND equities falling. I've gone to cash plus (reduced) equities, and although problematic, cash has at least had the virtue not losing value as quickly!
  • Agree traditional balanced funds don't work when bonds and stocks both go down. This is an environment for long-short, alternative or managed futures funds. Those come with execution challenges too but recently have been doing better than the traditional 60/40
  • edited October 2022
    This has been an extremely challenging year for the traditional 60/40 portfolio.
    It's very rare for stocks and high-quality bonds to both be down for two or more consecutive quarters.

    From Ben Carlson:
    "The 6 month returns for a 60/40 portfolio were in the bottom 2% of rolling returns going back to 1926.
    This means 98% of the time, returns have been better than what we just lived through.
    It was also just the 4th time over the past 100 years or so that stocks and bonds were down two quarters
    in a row at the same time.
    The last time U.S. stocks and intermediate-term bonds were both down two quarters in a row occurred
    in the first two 3 month periods in 1974."

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