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Of the 6300 plus funds at my brokerage Bear Market funds are in good company with precious metals and mining funds...both catagories down 25-30% over the last year. Here's a list of funds that sit at the bottom of the performance barrel over the last year:
Ted, thanks for the article which quoted David Snowball:
"David Snowball of MutualFundObserver.com noted that the test is easy for investors to fail, in that it isn’t limited to bear-market funds. 'Even folks holding a lot of cash are getting derided as stupid,' Snowball said, 'presumably for not finding a lot to love after a 190% run-up.'"
As I see it, most investors do not need a dedicated Bear-Market fund as they will likely mistime entry and exit. A better approach is to dial down risk at perceived market tops, while staying fully invested, by moving to such funds as VWINX, VWELX, BUFBX, MAPOX and WHGIX.
Chuck quite agrees that pretty much no one needs a bear market fund and few people need more than a sliver of gold. I think Chuck's point is that, for all our bold talk, just about everyone blindly chases performance. If that weren't true, we'd be hedging our stock portfolios now and we'd have emptied the vaults buying stocks in March 2009.
That is, by the way, the reason I tend toward managers who have the freedom to be bold (or cautious) when I wouldn't be.
I agree with David. Bear market funds don't make much sense to me. But I do think some allocation to quality long-short equity and bond managers can be a good thing. We would allocate 15-20% to 'alternative' funds. These could be a lot of different things: long-short, currency, bullion, commodities & futures, and selected go-anywhere funds. The idea is to have some part of the portfolio that should not follow every move of the stock markets.
Comments
Of the 6300 plus funds at my brokerage Bear Market funds are in good company with precious metals and mining funds...both catagories down 25-30% over the last year. Here's a list of funds that sit at the bottom of the performance barrel over the last year:
"David Snowball of MutualFundObserver.com noted that the test is easy for investors to fail, in that it isn’t limited to bear-market funds. 'Even folks holding a lot of cash are getting derided as stupid,' Snowball said, 'presumably for not finding a lot to love after a 190% run-up.'"
As I see it, most investors do not need a dedicated Bear-Market fund as they will likely mistime entry and exit. A better approach is to dial down risk at perceived market tops, while staying fully invested, by moving to such funds as VWINX, VWELX, BUFBX, MAPOX and WHGIX.
Kevin
That is, by the way, the reason I tend toward managers who have the freedom to be bold (or cautious) when I wouldn't be.
David
http://quotes.morningstar.com/fund/teamx/f?t=TEAMX
all-time high, but it hasn’t gone anywhere in 13 years." - Charles
Bath