What a month it has been. The jobs numbers for May and June were revised lower, and the July numbers were below expectations as a wakeup call to a slowing economy. Two weeks later, wholesale prices rose 3.3% compared to a year earlier, and the producer price index rose 0.9% compared to the month before as tariffs began to raise the cost of inputs. National debt hit $37 trillion in August. Underlying growth for the economy year-to-date is a weak 1.4%, but it is distorted by imports. Federal Reserve Chairman Jerome Powell gave his speech following the Jackson Hole Symposium, in which he expressed rising risks to employment, persistent inflation pressures, and an openness to interest rate cuts. The markets reacted Continue reading →

Traditionally, the job description for a core bond manager was numbing: (1) show up for work, (2) buy a bunch of Treasury bonds and some investment grade intermediate corporates, (3) celebrate the trading coup that allowed you to buy the same bond as everyone else but for a quarter basis point less – woohoo!, (4) go home and enjoy a fiber-rich dinner and small glass of red wine.

In reality, managers added negligible value. Over 10 Continue reading →

Reducing my risk profile for accounts that Fidelity manages allows more flexibility in what I manage. In other words, the intermediate investment bucket aggressive sub portfolio that Fidelity manages became more conservative, while I added a little risk to the conservative sub portfolio that I manage.

I would like to design a low-risk sub-portfolio that has a low correlation to stocks and bonds, returns about 5%, and has some inflation protection. The objective is to always have at least one fund that is up while still having decent returns. I began with the MFO Premium fund screener and Lipper global dataset, limited by correlations to the S&P 500 and bonds, low losses for the minimum rolling three-year period, and an MFO Risk rating of average or lower. I trimmed Continue reading →