Copied from the Big Bang Investing Board ... Investment Insights Section ... for posting on the MFO Board.
This briefing is for the week ending November 19, 2021.
The Index Review
For the week the major equity indices finished mixed. The Dow Jones Industrial Average gave back -1.38%%. the S&P 500 Stock Index gained +0.32%, the Nasdaq Composite climbed +1.24%% while the Russell 2000 Small Cap Index lost -2.85%. The three best performing major equity sectors for the week were consumer discretionary +3.74%, technology +2.39%, and utilities +0.98%. The widely followed S&P 500 Index closed the week with a dividend yield of 1.26% and is up year to date 25.08%. The widely followed US Aggregate Bond ETF (AGG) was listed with a yield of 1.83% and for the week lost -0.10%. Year to date AGG has had a negative total returned of -1.83%.
Global Equity Compass: For the week my three best performers in my global equity compass were QQQ (US Nasdaq QQQ) +2.35%, EWT (Tiawan) +1.41% and SPY (US S&P 500) +0.32%.
Fixed Income Compass: For the week my three best performers in my fixed income compass were TLT (20+Year US Treasury Bond) +0.70%, IEF (7 to 10 Year US Treasury Bond) +0.21% and AGG (US Agg Bond) +0.11%.
Commodity Compass: For the week my three best performers in my commodity compass were UNG (Natural Gas) +4.11%, DBA (Agriculture) +1.62% and GLD (Gold) -1.05%.
Producer Compass: For the week my three best performers in my producer compass were PIO (Global Water) -0.16%, MOO (Agribusness) -1.37% and TAN (Solar) -1.50%.
Currency Compass: For the week my three best performers in my currency compass were UUP (US Dollar Bullish) +0.98%, FXB (British Sterling) +0.14%% and FXY (Japanese Yen) +0.02%
A Blurb About Old_Skeet's Portfolio: My "All Weather Asset Allocation" of 20% cash, 40% income and 40% equity affords me everything necessary to meet my needs now being retired and in the distribution phase of investing. The benefit of this asset allocation is that it provides me sufficient income, maximizes my diversification, minimizes my volatility, and provides me long-term returns.
The 20% held in cash area provides me ample cash should I need a cash draw over and above what my portfolio generates plus it can provide me the capital necessary to fund a special investment position (spiff) should I choose to open one during a stock market pullback or to take advantage of seasonal investment trends. In addition, cash helps stabilize a portfolio during stock market volatility. Example of investments held in this area are currency, money market mutual funds, FDIC bank deposits and CD's. Generally, this area benefits from rising interest rates.
The 40% held in the income area provides me ample income generation to meet my income needs in retirement. It is a well diversified area that incorporates a good number of income generating type funds. Some examples of investments held in this area are AZNAX, BAICX & PONAX .
The 40% held in the equity area provides me dividend income along with some growth, that equities generally provide, which, over time, helps to offset the effects of inflation. Some examples of investments held in this area are AMECX, IDIVX & SPECX.
From their neutral weightings, 40% each for my stock and bond areas, overweights (underweights) are allowed at + (or -) 5% with rebalance thresholds set at + (or -) 2% from desired weightings while cash is allowed to float. Thus the maximum weighting for both stocks and bonds could be as high as 47% each with their minimum weightings being as low as 33% while cash is allowed to float with a weighting range of 6% to 34%. So what seemed, at first glance, to be a very conservative asset allocation does allow for positioning based upon market reads along with some other influencing factors. Currently, I am overweight equity through the engagement of a spiff position and a little underweight in my fixed income sleeve due to anticipated rising interest rates.
Generally, for my income distributions, I take no more than a sum equal to what one half of my five year average total return has been. In this way, I have found, principal grows over time as well as the size of my disbursements. My objective is to continue to grow my principal along with increasing my income stream.
Articles of Investment Interest
Is Investing an Art, a Science, or a Craft?
https://www.gurufocus.com/news/969787/seth-klarman-is-investing-an-art-a-science-or-a-craft
Europe Lockdown Fears Knock Stocks, Spark Dash for Bonds
https://www.reuters.com/markets/europe/global-markets-wrapup-3-pix-2021-11-19/
The Big Green Push to Get Rid of Coal Had the Opposite Effect
https://mishtalk.com/economics/the-big-green-push-to-get-rid-of-coal-had-the-opposite-effect
Wall Street Forecasts for the U.S. Dollar and 10-year Treasury Yield in 2022
https://www.reuters.com/markets/us/wall-street-forecasts-us-dollar-10-year-treasury-yield-2022-2021-11-18/
Old_Skeet's Favored Reference Links
Short Volume S&P 500 Index ... https://nakedshortreport.com/company/SPY
Breadth Reading ... https://stockcharts.com/h-sc/ui?s=$SPXA50R&p=D&b=5&g=0&id=p25768973625
S&P 500 Chart, Elder Ray System ... https://stockcharts.com/h-sc/ui?s=SPY&p=D&b=5&g=0&id=p20881173280
T/A Stock Opinion, SPY ... https://www.barchart.com/etfs-funds/quotes/SPY/opinion
T/A Bond Opinion, AGG ... https://www.barchart.com/etfs-funds/quotes/AGG/opinion
Thanks for stopping by and reading; and, I wish all "Good Investing."
Old_Skeet

@catch22 yes the PV chart looks a bit different but those funds are impressive all the same.

JT and Peter Lynch are the two PMs most responsible for my early retirement.
Not sure why your PV link uses 1985-2021. FLPSX incepted 12/27/89. So I changed the Start Year to 1990.
Also, your use of SPY as a Benchmark is noted on the results to limit its data to 01/90-10/21. So I changed the Benchmark to the VG 500 Index.
Here are the revised, far more impressive results that compare FLPSX to the three other funds since FLPSX's inception, a time at which my wife and I had it and Magellan as our only two funds. We shortly thereafter parted with Magellan.
EDIT: Deleted previous LINK. Having trouble getting the correct link posted here. See LINK at YBB's post below. Thanks YBB!

When looking at retirement funds, investor & institutional , why the large difference in % dividend ?
VITVX 2.87% VS VTXVX 9.75% 2015 year.
VITWX 1.93 % VS VTWNX 13.94% 2020 year
Thanks, Derf

Shiller p/e about to touch 40, regular SP500 p/e 30
Allan Roth today tweets about the new M* 3.3% SWR guidance (30y lifespan; probably already posted here)
https://www.morningstar.com/articles/1066569/whats-a-safe-retirement-spending-rate-for-the-decades-ahead

Keep subtracting one. So that one goes from, say, dividing by 19 years to dividing by 18 years ... down to dividing by 1 year. At that point, one must take everything out.
Which is a good thing. Otherwise one would have to divide by zero the next year :-)
https://www.irs.gov/retirement-plans/required-minimum-distributions-for-ira-beneficiaries

Why not file at 62 and invest 8 years of benefits.

Comment:
What the video misses is the fact that the dollar amount of a 5% withdrawal changes as the invested portfolio continues to be invested (during retirement). An investment needs to maintain its value over time. The best investments maintain their inflation adjusted value over time while also providing an income (withdrawal).
I fiddled with this scenario...please critique.
I assumed a 7% return investing after tax SS from age 62 to age 70, netting a portfolio balance close to $200K.
Now, if I died tomorrow my estate is worth $200K more taking SS early verses if I waited until 70 to take SS. This gets rid of "short-evity" risk (dying early). Also, I continue to work part time between ages 62-70 and add all of my SS funded contributions into a Roth IRA, (Roth 401K), Spousal Roth or through Roth conversions along the 8 year investment window (age 62-70). Since my SS income is $15K less at age 70, I take Roth withdrawals which are tax free. This seems to make good tax sense.
Using PV, I run three scenarios using different types of investments.
VWINX=Conservative Allocation
PRWCX = Moderte Allocation
PRBLX = Managed All Equity Fund - Aggressive Allocation
I start the simulation in 2001 to include two nasty downturns (Tech bubble and GFR) early on in the simulation.
Portfolio value is $200K (what was saved from SS). Year one pay out @ age 70 is $15,200 (the difference between early and late SS filing). This withdrawal will increase 2% a year for inflation going forward (COLA).
PRBLX & VWINX - Lost portfolio value throughout the 20 year time frame (70-90).
VWINX - Was ready to bust at age 90.
PRBLX - Was worth about half its orginal value $106K adjusted for inflation.
PRWCX - Lost portfolio value briefly during the GFR, but recovered and gained value.
PRWCX- Fared much better than the conservative allocation (VWINX) and the aggresive allocation (PRBLX).
PRWCX - At age 90, this portfolio had a inflation adjusted value of $200K...pretty good.

My PV Link

Your Social Security benefits are a significant retirement asset, worth more than $1 million of lifetime benefits for many readers. The present value of Social Security benefits at retirement, which can total hundreds of thousands or even millions of dollars, joins home equity as the two largest assets available for most American retirees, easily dwarfing the value of their investment portfolios.
For many lower- and middle-income Americans, Social Security may end up providing the vast majority of retirement income. The Center for Retirement Research at Boston College notes an interesting statistic that Social Security provides 70% of the income for 70% of households aged 80 or over.

introducing-the-social-security-claiming-decision/

WCMIX has $29B in AUM and is quite concentrated, maybe a red light. My preference is PWJZX. For Global, I'd put new money into BGAIX, not MGGPX. Heugh's fund also may have become too large, prompting the soft close. The Baron fund has scorched just about everybody in recent years.
I could not identify an international LB fund I would really want to buy. Back in the old days, Harbor International was great. It's hard to beat an index over the long haul. In my retirement account I have a healthy allocation to TIAA-CREF International Equity Index (TCIEX).

JonG

Good post @KHaw24 . The OP mentioned growth, blend and value. But just focusing on Blend for the moment - I agree with @MikeW on PRBLX over PRDGX for the reasons he mentioned. I don't own the fund because every time I look closer at it - I compare it to the plain old S&P 500 or FXAIX and have a hard time justifying peeling some from FXAIX with a .015 ER vs PRBLX with a .84. The disparity in max DD, Ulcer and StdDev is not that much to me.
There could be an entire thread about LC Growth funds (so many).
For Value, I really like PARWX and am invested there. I think when you compare it to HCMAX, you'll find it outperforms in almost every category/time period. Worth looking at.
PRWCX is just a great fund. Wished I owned it and might if it opens up. Until then, happy to stay with FBALX and FMSDX for now. Best to you.

Thanks...I owned PARWX for a while in my 401k but started transitioning to cost effective OEF's and ETF's like the Fido Funds you mentioned. ISn't there a looming retirement on Endeavor's PM team? Not certain if I am correct on that...

My asset allocation for this portfolio - 56% Domestic Equity, 22.5% Int'l/EM, 20% Fixed Inc. I am 13 years from Retirement and all of my equity holdings are a healthy split across Style and Market Cap.

@KHaw24 It's hard for me to comment on choosing PRWCX over PRDGX not knowing your specific situation in terms of age and how close to retirement you are, how you are currently allocated, and what your other holdings might be. They are both excellent funds. Personally, I have been wanting to add PRWCX for a number of years and plan to buy it if/when it opens up again. For me, however, if I were to select a large cap blend fund, I would probably invest in PRBLX. If you run the screen on MFO Premium you'll find that PRBLX is a Great Owl, has stronger APR over the past 5 and 10 years as well as lifetime of the funds, has less max drawdown, and has performed better in bear markets.

At some point, we all overthink our investment choices and I'm bouncing this idea off of the MFO folks to provide me some reasoning/guidance.
In my Rollover where 60% of my retirement assets currently sit, I have a healthy, diversified portfolio. In particular, I spread my Large Cap OEF's across Growth, Blend/Core and Value. I consider style, overlap, cost, holdings, Up/Down, SD and Beta. Currently I have the following - HCAIX (Growth), PRDGX (Blend), HCMAX (Value).
TRP has a new Summit 'program' that kicks off on Nov. 15th and part of that is existing clients with a certain asset level will be able to purchase closed OEF's. I'd like to buy PRWCX and use it as a Allocation/Tactical sleeve in my Rollover. I know it's not considered 'tactical' but Giroux successfully moves to all types of investments beyond the atypical equity/fixed income in a tactical fashion.
Here is the potential overthinking - Should I add this and keep the PRDGX position? The Equity sleeve of PRWCX(50-70%) is typically invested in Core/Blend style box...there are also approx 20 holdings that overlap with PRDGX. I recognize that's the overthinking part and not a big deal but it's something I always review.
Would you use PRWCX as an allocation/tactical play and add it or replace PRDGX? I also own BCOIX and PRSNX as my fixed income investments.

For those not familiar, and those who will soon wish they were not.
That was NOT a serious question. Rather...
FD1000 is a constant troll of mine who is Living in the Past (Thanks, Jethro!) , desperately trying to discredit me wherever he goes, with whatever vague, twisted memory he might still retain from years of our joint posting activity on several forums.
He appears to have no life other than his inherently flawed and underperforming Yugo Racing Scheme, while trying to sell his wares on whatever forum allows his continued participation. Sadly he somehow still however finds the time for daily trolling of my posts. If he would have just done what he daily tells "Average Joe Investor" to do, buy and hold an S&P index fund, he'd likely have twice the net worth he currently has. A tall glass of FOMO juice would have served him well. It's truly sad.
FWIW, I currently have a smallish 5-yr CD ladder yanking down 3.35% APY. All proceeds from maturing CDs over the past several years have been rolled into stocks. The ladder was started after early retirement at age 56 to bridge the Red Zone divide. It's done its job exactly as meticulously planned and has been being liquidated for several years.
For 30+ years I was 99% stocks. That dropped to ~60/40 in the coupla years prior to retirement. Since retirement I have always maintained an acceptable % in stocks but increased that to a significant % since the 2020 crash. I've posted all that several times on several forums, but somehow selective memory and ill intent can get in the way of some posters.

I agree opt out programs significantly increase participation rates above that of opt in programs. They may be the most effective way of boosting participation. However there is the danger of unintended consequences for lower income workers that tax credits or some other form of subsidy could mitigate.
From the same report, pp. 24-25:

Authorize Automatic IRAs at the Federal Level
...
Advocates of automatic IRA efforts cite that the coverage gap between workers with and without pension coverage will decrease and that increased savings will reduce the burden on future social assistance programs. In addition, some researchers found that automatic IRAs implemented early on in individuals’ careers could increase retirement income for between two-thirds and one-half of individuals in the lowest quarter of the income distribution at age 70.
Others caution that automatically enrolling lower-income individuals into savings plans may have unintended consequences. For example, increased savings could result in decreased standards of living during working years and could result in disqualification from means-tested governments programs (e.g., losing Medicaid eligibility due to mandatory withdrawals in retirement). One study found that automatic enrollment in retirement accounts may cause increases in auto loans and first lien mortgage balances. Another found that automatic enrollment may not necessarily have large impacts on household net worth over time.

"Fifteen percent of households in the labor force without employer-sponsored pensions indicated owning an IRA in 2019."
Congressional Research Service, Individual Retirement Account (IRA) Ownership: Data and Policy Issues, Dec 9, 2020.
https://crsreports.congress.gov/product/pdf/R/R46635/3
So for the vast majority of people without jobs offering 401(k)s or 403(b)s, the size of the IRA contribution limit makes no difference.

A retirement plan for those without access to traditional 401k/403b plans could include an automatic enrollment provision to increase participation rates. Vanguard released a study earlier this year which indicates that participation rates tripled in 401k plans with an automatic enrollment feature.
This can be a very useful "nudge".
PDF

Roth IRA used to have $2,000 limit when it started in 1998. Many people don’t have jobs with 401K) and 403(b) plans. How can one save enough for retirement with $6,000 and 1,000 catch-up, per year?

"Fifteen percent of households in the labor force without employer-sponsored pensions indicated owning an IRA in 2019."
Congressional Research Service, Individual Retirement Account (IRA) Ownership: Data and Policy Issues, Dec 9, 2020.
https://crsreports.congress.gov/product/pdf/R/R46635/3
So for the vast majority of people without jobs offering 401(k)s or 403(b)s, the size of the IRA contribution limit makes no difference.
If the concern is in encouraging the 75% of households (ibid) who do not have any IRAs to save for retirement, I might suggest better publicizing the Savers Credit and making it a refundable credit.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit

Agree. Also the company matching also helps quite a bit, sometime in the range of 4% or more. By the time I entered the work force, define pension plan already disappeared. So the burden of saving for retirement was on the workers who have to learn from the ground up while assuming all the risk of black swans. Fund Alarm and MFO have been a great contributor to education myself in investing.

Roth IRA used to have $2,000 limit when it started in 1998. Many people don’t have jobs with 401K) and 403(b) plans. How can one save enough for retirement with $6,000 and 1,000 catch-up, per year?

I converted my small Traditional IRA (~ $35K) to a Roth IRA in 1998.
I've been very fortunate that the Roth IRA has increased in value considerably since 1998.
However, the Roth by itself would not provide for a comfortable retirement.
Thankfully, I also have access to 401k and HSA plans.
It would be beneficial to have a retirement plan similar to the Thrift Savings Plan (TSP) universally available for employees without access to traditional 401k/403b plans (often employees at smaller companies).

Roth IRA used to have $2,000 limit when it started in 1998. Many people don’t have jobs with 401K) and 403(b) plans. How can one save enough for retirement with $6,000 and 1,000 catch-up, per year?

Agreed. I think it's IRAs are joke compared to 4XX-type employer plans. Similarly, 4XX plans are a joke in that there are limits ... frankly if you make < 200K I think you should be able to tuck as much as you want away in a retirement account since if you 'have a great year' you might want to be a 'responsible saver' and tuck a larger amount away during your boom times.

Roth IRA used to have $2,000 limit when it started in 1998. Many people don’t have jobs with 401K) and 403(b) plans. How can one save enough for retirement with $6,000 and 1,000 catch-up, per year?