I am providing more on the “Sleeve System” to investing. Seems others have found good value in a sleeve type management system besides myself.
bee who has been a long time poster on the board and made me feel welcome when I first arrived (as some were rude) many years ago (back in the Fund Alarm days) recently sent me some information, she found, from FMD Capital about their using a sleeve type management system for income investing. My system is geared towards income plus capital appreciation as my system contains an additional growth area. In this way, capital gains (if needed) can be taken in addition to income generation to help supplement the portfolio's monthly distribution. Currently, I draw form three to five percent annualy form the portfolio and have been able to grow principal over time at these distribution rates.
The FMD Capital system is definitely worth the read and it is linked below for your reading enjoyment. It is titled, "The Strategic Approach to Income Investing" and is written by Michael Fabian. http://fmdcapital.com/wp/wp-content/uploads/2013/09/FMD_Income-Investing.pdf
Thanks again bee ... It is most appreciated.
I have also posted below how I have my sleeve system organized by area and by sleeve with current holdings.
Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts. The accounts consist of a taxable account, a self directed ira account, a 401k account, a profit sharing account and a health savings account plus two bank accounts. With this I came up with four areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is an income area which consists of two sleeves. … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area which consist of four sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve and a specialty sleeve. Each sleeve consists of three to six funds (in most cases) with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and the amounts held. By using the sleeve system one can get a better picture of their overall investment picture and weightings by sleeve and area. In addition, I have found it beneficial to xray each fund, sleeve, an area and the portfolio as a whole. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets and wish to weight accordingly. In addition, all fund distributions are taken in cash and are diverted to the cash area of the portfolio.
Below is how I have it broken out with current holdings.
Demand Cash Sleeve… (Cash Awaiting Investment Deployment)
Investment Cash Sleeve … (Savings & Time Deposits)
Fixed Income Sleeve: ITAAX, LALDX, THIFX, LBNDX, NEFZX & TSIAX
Hybrid Income Sleeve: AZNAX, CAPAX, FKINX, ISFAX, PASAX & PGBAX
Growth & Income Area
Global Equity Sleeve: CWGIX, DEQAX & EADIX
Global Hybrid Sleeve: CAIBX, IGPAX & TIBAX
Domestic Equity Sleeve: ANCFX, FDSAX, INUTX, NBHAX, SPQAX & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, CFIAX, DDIAX, FRINX, HWIAX & LABFX
Global Sleeve: ANWPX, PGROX, THOAX, DEMAX, NEWFX & THDAX
Large/Mid Cap Sleeve: AGTHX, SPECX, IACLX, VADAX, HWAAX & BWLAX
Small/Mid Cap Sleeve: IIVAX, PCVAX & PMDAX
Specialty Sleeve: CCMAX, LPEFX & TOLLX
I wish all ... "Good Investing."
1) US Equity Funds: ANCFX, ACMVX, GABAX, GASFX, BUFBX, PRBLX, VVPSX, SCHD
2) US Balanced and Allocation Funds:ABALX, TWSMX, RSIVX, MFLDX
3) World and EM Equity Funds: SMCWX, CWGIX, ANEFX, MAPIX, ARTGX, SFGIX, WAFMX, GPROX
4) US Bond Funds: ABNDX, AIBAX, AHITX, ABHIX, RPHYX, LSBRX
As you say, it makes it easy to adjust balances within areas by adjusting various fund levels. The four areas are currently 20%, 20%, 31% and 29%, respectively. A series of graphs and charts in my spreadsheet give a good picture of the performance of each fund individually, as well as overviews of the total allocations as: US stocks, foreign stocks, US Bonds, foreign bonds, convertible, preferred, cash & "other".
BTW, am thinking about adding TOLLX.
Thanks for your comments.
I count 26 funds within your portfolio. How many accounts feed your sleeves?
And, TOLLX is a good fund by my thinking and research. And, it is one that I have on my list to buy additional shares during market pull backs. I have linked its M* report for those that might wish to take a closer look.
As life turned out, with both of us retired for some ten years now our combined pension and SS income is more than enough to meet our needs. We have a very large cash "reserve" of about 50% of our NW, which is in addition to the portfolio given above. The portfolio constitutes about 25% of our NW, and is structured so as to provide enough income/appreciation to offset the inflation which is eating away at the non-invested cash. Also, the portfolio is designed to provide approximately half of the volatility of the S&P, limiting both it's potential upside and downside swings.
The remaining 25% of our NW is the conservative resale value of our weekend home. The value of our home in SF is not included in any of these calculations. Both properties are mortgage free, and we have no debt of any kind. Very conservative, but we have no problem sleeping at night.
I find "D" shares at pimco and "N" shares at Janus and TCW and "Z" shares at Columbia are all investor share often NTF.
Some funds have both NTF share class and a TF share class...I will sometimes consider TF shares class if I plan on holding the position for a longer time frame.
Also TRP and Fidelity offer Advisor shares that are often NTF, but with a higher ER than the non-advisor shares (say for instance PRWCX vs PACLX).
It always has to do with costs...either Loads, Expense Ratios, 12-1 fees, early redemption fees, etc.
Some brokerage houses only offers the load or TF share class of a particular fund while some have FUNDX.lw (load waive) versions. These often are the institutional classes.
Very confusing isn't it?
I'm sure I missed something...lots to know when it comes to the slicing and dicing the mutual fund world.
1. US Equity Funds: PRWCX, PRSVX, VWELX, VWINX, VTSAX, VMRGX
2. World and EM Funds: PRSNX, TRAOX, TRAMX, VFSVX, VTIAX, VWIGX, TREMX, PRLAX, VEUSX
3. Health Care: PRHSX, VGHCX
4. Real Estate: VGSIX
5. Communication: PRMTX, PRGTX
6. Natural Resources: PRNEX
"Would seem the same to me."
I think the intent is the same but the way the intent is handled seems different. I see one traditional bucket system set up for time periods, ie 1-5 yrs, 6-10yrs, 11yrs and beyond for example. The sleeve is something new or in this case the management of the sleeves as Old Joe has done with sleeves for different investment strategies. ( cash, fixed income, etc. )
There is no price for ones sleep.
I have found this sleeve thread very informative and it could be very useful as I head into retirement age.