Fidelity Family

Explore part of total portfolio

AKHalea — Sat, 07 Nov 2009 15:53:44 GMT

As you know, we talked a lot about building a portfolio that will serve us well thru the medium term as seen here. There has also been a lot of discussion about using many balanced funds, EM funds etc to build a solid long term portfolio. I think that such a portfolio should constitute a solid "core" of an investors' portfolio, with risk levels appropriately adjusted to the individual's sleep factor.

A portfolio so constructed, will likely require low maintenance & can constitute a significant portion of the total portfolio (that is it can be less than 100% but say more than 75% of the total portfolio). However, many folks have indicated that they also have an "explore" portion of the portfolio that requires more attention, but can provide commensurate added rewards. Do you have such a split? If so what are the areas you are experimenting with and what are the factors you use to judge to tweak it (buy/sells etc).

The question is what do we want to try out in this "explore" portion of the portfolio to spice up our total portfolio returns. Your ideas welcome. I have a few thoughts that I would share later .... Anil

BofA -- 7 Tail risks for 2010

DeerIslander — Thu, 19 Nov 2009 21:33:48 GMT

Having trouble figuring out how to position your portfolio for 2010?

In a very useful report that is unfortunately copyrighted BofA highlights what it considers the 7 tail (outside the current consensus) risks in 2010 and how to position your portfolio for each of the events. Not all are bad events.

The seven tail events they highlight are:

$100 /bbl oil and inflation
A double dip in growth
An asset price bubble in China
Protectionism and a dollar crisis
A debt default in Japan
A recovery in housing and the US consumer
The surprise is no surprise

Some of these have not been on our discussion radar but might merit some attention.

Clearly in dealing with one event you frequently increase your risk to another. If you can get a copy of the report I urge you to do so. It is worth the effort.

TA -- 11/09 The Halloween Correction is Here

DeerIslander — Sun, 01 Nov 2009 21:46:50 GMT

A correction started the last week of October. (Did UH note the Full Moon on Halloween?) From a TA standpoint this decline was foretold since mid-September by declining breadth and declining momentum. The percentage of stocks that are Bullish on the NYSE has fallen from 88.6% the week of September 12 to approximately 75% Friday. $BPSPX

The market as measured by the percentage of stocks above their 200 ma was very overbought. In September the percentage of stocks above the 200 ma peaked at over 93%! That was a 3 year high! How overbought? At the Bear market bottom the percentage was 2% - 3%. So it is fair to say this Bull was very overbought by mid-September and has since pulled back to 86% -- by historical standards still overbought but less so. $NYA200R

The market has already corrected more than 5% from its most recent high in mid-October which meets the minimum correction definition of 5%. $SPX Corrections however come in two distinct flavors: Price with a price drop sufficient to bring buyers back in the market or Time when the market moves sideways and gains consolidate until fundamental value returns to the market.

So what are the indications on what shape this correction will take? Looking again at $SPX chart the cloud which projects forward 26 days indicates a somewhat sideways pattern. Further the $SPX has not broken the bottom of the cloud. While helpful this should not be considered definitive.

It is also positive that we have not seen a Hindenburg Omen. HERE Some elements of an omen are present but a minimum of two Omens are necessary to identify the risk of a crash. (10% or greater drop). Since 1987 there has not been a crash that was not proceeded by an Omen. That gives some comfort that we are not facing a severe decline -- yet.

There is support for the $SPX at 1020, 1000, 980 and 950 with 950 appearing the most formidable. On the other hand there is very strong resistance at 1060 and above that the recovery high of 1101 which will not be easy to close above barring a change in outlook. That says the odds of an immediate resumption of the Bull are low at present. As Capecod advised -- for now sell the rallies.

This sell off was triggered by a fear that quantitative easing and low interest rates may be coming to an end. There was also fear of a $US carry trade unwind. If true either would in all likelihood accelerate the correction. The FOMC meets on November 2 and 3 which could be a seminal event and dictate the markets next directional move.

So far DBV our proxy for the $US carry trade is quiet and showing no signs of a change of direction. Likewise the 10 year Treasury $TNX is still within its well established trading range and rates fell on Friday. Likewise short term rates as represented by the 3 months LIBOR are dormant and could win a limbo contest. $LIBOR3 However if there is substance to the reversal fears these indicators should show it here first though the change could be quite sudden.

So -- so far so good. No evidence of a Crash or retest of the Bear market low of 666. One final word of caution look at this chart of Norbert’s ratio on this cloud chart. $SPX:$VIX Note that this indicator has broken the cloud and is clearly Bearish. Looking to the left of this chart you will note this indicator did not break the cloud during the June-July 2009 sell off. That says whatever this correction is or will be there is every likelihood it will be the worst correction yet since the 2009 low. The June-July correction measured 9.1%. As of the Friday close we are at 6.1% and counting.

Bottomline: Caution is the watchword of the day. The trend is not currently our friend.

Erryl - Junk bonds expensive

seh1981 — Sun, 15 Nov 2009 16:18:56 GMT

Hi Erryl

I was reading the thread about inflation protection and saw your comments regarding high yield bonds and your belief that they are expensive.

Recently, I have been wondering about this and reviewing different funds.

The very first thing I look at is yield...if prices are up, yields will be down. The problem is that when I look at yield, I find a lot of difference between different funds and ETFs.

Here are some examples:

Bloomberg, Avg Redemption Yld = 9.75

Fidelity Hi Inc (SPHIX) = 6.92

Met West HY (MWHYX) = 9.62

ishares iBoxx HY (HYG) = 9.82

SPDR Barclays Captl HY (JNK) = 12.43

Yields are per MStar except of course Bloomberg.

As you can see, yields are all over the place, from a low of 6.92 to a high of 12.43. Now I know that quality and maturity will vary but still...big difference. So my questions to you (and everyone else)...what are your general thoughts? is it possible that some areas of junk market are expensive, others less so? if you invested in an ETF like JNK, how consistent would you expect the income to be and for how long?

PS: Maybe I should have switched the colors I used for the yields of JNK and SPHIX.

Thanks

About Bonds & Interest rates

AKHalea — Fri, 16 Oct 2009 10:40:08 GMT

Many of us here hold substantial amounts of bonds in our portfolios. While bonds provide a good ballast to a portfolio because of the income they bring, recent low rates have reduced this ballasting capability (somewhat). Bonds are also very susceptible to the smallest nuances in the Fed's rate policy. The reason for starting this thread is two-fold :

To discuss concerns and potential changes in the Fed's interest rate policy,
To explore investments in the bond world that might be worth considering (or not) at this point.

Since bond NAV movements occur on the smallest whiffs in the macroeconomic picture, this would also be a place to discuss the maco economics here. In the light of the rout in muni bonds and the carryover now into govt & corporate bond sector, this could be a time to start thinking about a slow retreat from the world of 007s. We may be coming to that point sooner than we think ..... Anil

Tactical Funds

DonaldB — Wed, 14 Oct 2009 18:24:25 GMT

Anybody know any good ones?

timing and dividend distributions

macunix — Sat, 21 Nov 2009 01:52:27 GMT

i'm going to buy some more MAPIX at some point. the quarterly dividend (not cap gain) record date is 12/8 and the pay date is 12/9. amount is 0.1735.

if i wanted to buy around that time, is it worth waiting till after the distribution? i've looked at a few past distributions and it does seem that the price drops by about the indicated amount, but it bounces back quickly. so to play this game i think it's necessary to buy on exactly the right day. that is 12/9, right?

tia...tom

Why Was Hussman's HSTRX Down So Much Today?

JeffMor — Sat, 21 Nov 2009 00:28:31 GMT

My HSTRX holding was down 1.38% today. It was my worst loss by far. Even more severe than my Russel 2000 holdings. I checked there was no distribution and my bond funds were not hurt too badly either. So what gives?

jeff

How does NatGas storage work?

comico — Fri, 20 Nov 2009 16:58:47 GMT

When I see articles with statments like this:

"The U.S. has added more natural gas into storage every week since March 27, and there is now more natural gas tucked away in the U.S. than at any point in history."

I think, "Ok, here's an imbalance that won't last forever that the vigilant can profit from". High storage equals low price, but if these are all-time highs in storage it stands to reason we are at all-time lows in price as well.

But I really don't know the details of what I'm talking about. Who decides how much natural gas is added into storage vs. exported or burned? What factors, other than the weather, might lead to a change in policy on that? Is this a governmental decision, quasi-gov, or private? Etc, etc...

Can anyone shed some light onto this or provide a link? I'd like to understand more.

comico

Steady Equity Fund for Taxable Account

puddleglum — Tue, 17 Nov 2009 23:19:57 GMT

I would appreciate recommendations for a low/below average risk, moderately high return (mainly domestic equity) fund for my taxable account at Fidelity. My searches using the Screener were less than satisfying.

In my tax deferred accounts (401K & RO IRA) the equities are supplied by:

OAKBX
FPACX
PRPFX
IVWIX
MDISX
MACSX
RDS.A

I will be retired soon (1-2 years) and seek a pure equity fund for the taxable account that won't worry me at night. I am quite risk averse at this point.

This taxable account only holds 7-8% of my overall portfolio.

Thanks so much for your responses.

Steve

Hold onto cash or start investing?

PamelaW — Tue, 17 Nov 2009 19:39:44 GMT

I have a large chunk of cash that I need to decide what to do with. I have my "cash" portion already taken care of with a decent rate CD ladder so that's not a consideration.

I need to beef up my large cap allocation by a considerable amount so I've been looking around M* for ideas. One that caught my attention is YACKX Yacktman Large Value. Any thoughts on this one or another recommendation for a Fidelity or NTF fund? This will be in a taxable account.

Or is now even a good time to invest? Too close to year-end distributions? (like there is going to be big profits). Wait until the DOW is below 10k again?

November Global Investing -- A time for caution and making plans

erryl — Sat, 31 Oct 2009 16:19:42 GMT

Foreign investing goes in and out of favor with US investors. Some of that cyclic behavior is related to stocks in general going up and down. Investors tend to pull out of what they perceive as more risky investments in times of market weakness. If stocks are going down, expect investors to flee small cap and foreign to a greater degree than the LC domestic stocks they perceive as being safer. Foreign funds also tend to perform well when the dollar is weak and less well when the dollar is strong. Someone might make an argument that you don't need any foreign... or they may argue that you should be all foreign. My belief is that neither is correct and that you should have some foreign to diversify your equity portfolio. There will be times when foreign outperforms and times when it underperforms.

What has performed this year? (as 1/30/09)

    RSX (Russia).......       111.09%
    BKF (MSCI BRIC EM)... 84.19%
    INP (India)........          77.94%
    ILF (Latin America)...    67.82%
    PAF (Asia ex-Japan)...   63.40%
    EWA (Australia)....       60.77%
    EWC (Canada).......      37.51%
    EMM (Mid Cap)......       32.76%
    JNK (High Yld Bonds)... 30.47%
    JKJ (SCB)..........           27.13%
    EFA (EAFE index)...        25.43%
    SPY (S&P500).......        19.65%
    FSTMX (Tot Mkt Ind)... 18.91%

The above list was created rather hurriedly and is not an endorsement of these particular ETF's. They kind of give you a feel for what areas of the world have been profitable for investors this year, but what do they tell us about volatility? Let's look at what happened to each of these last Friday, when the market decided that it wanted to tank?

    RSX (Russia).......       -6.16%
    BKF (MSCI BRIC EM)... -3.63%
    INP (India)........         -5.35%
    ILF (Latin America)...   -4.63%
    PAF (Asia ex-Japan)... -4.54%
    EWA (Australia)....       -4.32%
    EWC (Canada).......      -3.25%
    EMM (Mid Cap)......       -2.71%
    JNK (High Yld Bonds)    -0.52%
    JKJ (SCB)..........          -2.57%
    EFA (EAFE index)...       -3.34%
    SPY (S&P500).......        -2.90%
    FSTMX (Tot Mkt Ind)      -2.80%

While the correlation isn't 1-to-1, it is true, however, that the funds with the biggest gains YTD were also the funds that dropped the most last Friday. Time lags between the countries and stock markets make the comparison far from precise, but generally speaking "the higher they go, the more they fall." That doesn't mean that you shouldn't own them... it just means that you need to be careful with them... they can make you a lot of money, but they can also lose it very quickly for you.

Looking at the YTD numbers once more... this year is one where any diversifier to large cap domestic stocks has outperformed them, even junk bonds. If you have a portfolio dominated with mega cap US stocks, you have under-performed, and big time. Mid cap stocks have outperformed mega caps 2-to-1... foreign has outperformed domestic... but EM's have really soared (outperforming Euro funds 300-500%. China, while it has done OK, was probably the weakest of the BRIC countries. Russia, which dropped the furthest prior to 2009 (weak oil, invading neighbors, and global recession), was the stongest rebounder (at least in my sample).

The above is kind of like boring facts and will probably not sustain a conversation for a whole month. I have one that might... let's assume (just for fun) that the US stock market corrects after this pretty nice gain since March... and let's assume that foreign, and especially
EM's correct even more (remember that volatility), where would you be investing if prices drop to cheaper valuations... you know, a price that will even attract Chang (call him tight, call him a value investor... call him smiling). Anyway, if the foreign stocks get cheaper (perhaps by a sinking volatile foreign markets or perhaps by a rising dollar), what would you be looking for? If you could have your money anywhere, where would you invest?

I'm really open to suggestions. I think that I would like relatively undiscovered areas not attracting a lot of hot international money and I think that I would like rather focused investments (single country or regionals). I think that Singapore (Chang's home) looks intriguing... it got away from me once. It is a financials meca... and will benefit from being closer than NY and London to the money. If Brazil is a no brainer, Chile is likely to be the
lesser known benefactor. Some day... Turkey and Africa.

I think near term, you should be taking profits... but longer term, you need a plan for what you want to buy... those stocks and funds that have gotten too expensive this year. How about you?

erryl

ps Here here (clap those hands) for DrH and her efforts to keep this tread afloat. Let's resolve to keep it going in good times and bad. Since March, it doesn't get much better than that!

help on fresx

facmit — Thu, 19 Nov 2009 17:37:55 GMT

is that true that all REIT funds/companies are closely related with the properties appraisal values? for example, in this crisis, i don't see the rent changes a lot. only the property value change a lot. and the result? the big drop on reit funds.

or the big drop on reit funds (the NAV) is NOT related to the property value, but to the overall stock market?

thanks

Mauldin's "Glide Path Option"

norbertc — Sat, 07 Nov 2009 14:33:25 GMT

Though not usually a big fan of John Mauldin, I really like his new piece "The Glide Path Option" HERE. It's basically an analysis of several macro scenarios for the US.

"Argentinian Disease": we print money and end up with hyperinflation. Mauldin thinks this is the worst of all bad choices and that the odds are low that we go here.

"The Austrian Solution": get rid of Fed, go back to gold standard, allow "too big to fail" banks to fail, let GM go down, and allow the strong to thrive. You take all your pain at once. We'll get 30% unemployment, a deep recession, and there's no way Congress will let it happen.

"The Eastern European Solution": we rebuild our institutions from the ground up - major change! Not too likely, but interesting to consider.

"Japanese Disease": large fiscal deficits, weak job creation, stagnant GDP ... but they muddle through. Japan is a very clear demonstration that things that don't make sense can go on longer than we think. Though there are differences to the US, this is our current path.

"The Glide Path Option": the administration lays out a credible plan to reduce the deficit over time to where it is less than nominal GDP. It means higher taxes and will be a drag on jobs and growth. This plan is painful now, but avoids worse pain down the road.

I'm wondering what people think about these options. What % probability of each happening? And what different investment strategy?

Would Mauldin's "glide path" strategy be politically sustainable? Is the current path ("Japanese Disease") sustainable? If we can see that the current path is not sustainable, won't the Obama administration see it too?

Norbert

Fidelity Int'l Small Cap

KevinC — Wed, 18 Nov 2009 03:24:24 GMT

Today's WSJ report that FISMX reopened today after being closed since May 2005. There are not many small cap international fund choices. While the recent run-up in this asset class gives me pause what do others think of this fund?

KevinC

What are the Good Fidelity International Core Funds?

wangy26 — Wed, 18 Nov 2009 21:06:54 GMT

My sister's retirement account is with Fidelity and she can chose any Fidelity Fund. She is looking to increase her international exposure. What are the steady long term core international funds would you suggest?

Thanks!

help on fnmix

facmit — Thu, 19 Nov 2009 17:52:17 GMT

right now it is good. IF the interest rate will rise, let us, say, next May (randomly thought), will it have negative impact on its return?

help on fnmix

facmit — Thu, 19 Nov 2009 17:52:49 GMT

right now it is good. IF the interest rate will rise, let us, say, next May (randomly thought), will it have negative impact on its return?

Gentle Ben Speaks

capecod — Mon, 16 Nov 2009 18:53:38 GMT

Okay, group. I know it's always been fashionable to say "Oh, that Fed guy is obtuse...speaks in riddles...who can possibly understand what he means..etc, etc, etc."

B.S.

Today (as almost always) the chair of the cetral bank was clear as a bell and means exactly what he says. If his words aren't clear enough, here's a translation:

"Hey! Everybody look over here and read my lips! Fed-managed short rates are going to stay at zero-ish for a long long time. We are aware of movements in the dollar, tentatively increasing economic activity, restrained bank lending and credit availability during multi-year deleveraging, likely increasing and stubbornly high un- and under-employment, and lowish rates of inflation....but also we know a return to negative growth and inflation is unlikely but still possible. Considering all that, I'll say again: short rates are going to stay zeroish for a long time and whatsmore, even after we start tightening, rates will remain extraordinarily low for a very very long time. Got it?"

Regards, Dick

Why is FGRIX (Fidelity Growth & Income) so bad? - need advice

barbmkb — Wed, 11 Nov 2009 20:38:10 GMT

When my daughter was 2, I opened an UTMA for her with an initial $3000 and had $200 monthly automatic contributions made from my checking account. The only fund was FGRIX. When I learned that she would control the $ when she turned 18, I opened a separate joint account with $3K (also FGRIX) and changed the automatic contributions (increasing to $300 per month) to the joint account. The original UTMA was left intact and both accounts had the dividends, etc reinvested. This went on for years so a lot of $ was contributed.

Late last fall, since the fund was doing so badly, I made some exchanges to get the tax losses:

Joint and UTMA: $2500 from FGRIX to FDFAX so $5K total. FDFAX is up 17%

Joint: $6500 from FGRIX to FBALX - down 19% as of 11/10

Joint: $3000 from FBRIX to FDVLX - down 5.65% as of 11/10

FGRIX is down 54.65% joint, and 47% UTMA.

She is a senior in high school and turning 18 later this month and what I thought would be her college fund is worth $18K in UTMA and $24K in Joint.

I looked at FGRIX portfolio and really don't see why it is so bad. I am ready to pull the plug, but see that they have a new mgr this year.

What do you think I should do? She/I won't need the $ for her first year of college....Any advice would be appreciated.

TIA,
Barb

pattern in my charts

kerryvan — Thu, 19 Nov 2009 11:11:44 GMT

an interesting pattern, looking thru all my holdings charts on the fido portfolio page I've noticed a pattern for about 3/4 the funds. the low is the start of the month for the past 3 months...

Smokescreen over oil reserves

Aalan88 — Thu, 19 Nov 2009 01:56:09 GMT

A new article about peak oil -- and how the SEC is making it easier for drillers to misrepresent "probable" reserves to investors:

http://seekingalpha.com/instablog/135406-alan-von-altendorf/36231-the-tragedy-of-21-darts

This seems extraordinarily important. By inviting an epidemic of over-estimates of reserves, the agency is cultivating the conditions for a bubble in oil stocks that will collapse in a particularly nasty way. At the same time, it could provide a basis for under-investment in alternative energy. If investors and analysts don't get wise to this quickly, is has the makings of a major social tragedy that could make everyone forget about the mortgage bubble. Read the article (long but not boring!) and tell me if I'm being too melodramatic.

More views from china

kerryvan — Wed, 15 Jul 2009 19:20:04 GMT

Instead of corrupting other discussions, I'm opening this thread to add snips from the motley fool global gains news letter that I get.. it is free, but I don't have a link to it... Their focus is more on picking stocks in china, which I don't do.. I do enjoy some tidbits from the news..

here is todays update... esp like the comment about the dish and cell phones... I think matthews funds reported some astounding growth a while back about cell phones.. guess dish is in the same catagory.. Yet number of cell phones is still at a small % of population..

Tractors and Satellite Dishes

One tangible sign of growing rural wealth: This
guy gets more channels than we do.

While the sightseeing was limited, the visit was extraordinarily helpful in clarifying the state of China's small farmers. The first thing you notice as you walk down the dirt road that divides one farmer's plot from his neighbor's is that the farmers are indeed getting richer.

Every home we saw had a satellite dish on top and some sort of engine-powered transportation device (scooter, tractor, or a monster-garage hybrid of the two) parked out front. The farmers also had cellphones (with, we might add, extremely strong reception ... Verizon, T-Mobile, and company be darned). Finally, the hardware store in the middle of the village was packed to the gills with a wide variety of fertilizers and pesticides. We took this as evidence that China's peasants have accepted some of the tools of modern agriculture and are willing to invest their hard-earned dollars in products such as fertilizer that can deliver bigger profits down the line.

thinkorswim

Anatole — Sat, 19 Sep 2009 20:17:12 GMT

I have read here people post here about thinkorswim and availibility of certain mutual funds or trades.

If you have an account there what do you like or dislike about thinkorswim? Is there any particular mutual funds available there which are not at most other brokerages like mutual discovery funds etc?

If you trade then how much it costs as it is not very clear from the website as they only mentioned quantitive costs. I have read that they are being acquired by TD ameritrade, so is there still any advantage?

Increasing Fidelity international funds allocation from 19% to 30%:

Fundscan — Wed, 18 Nov 2009 16:01:06 GMT

Fidelity has recommended an international stock allocation of 30% for the stock portion of a portfolio.

Our international stock fund allocation is currently 19.59% of the stock portion of an overall portfolio. The overall portfolio includes all funds in Fidelity retirement accounts + a Fidelity taxable joint mutual fund account.

We have roughly the same amount invested in each Fidelity international fund we own: Our funds are:

FTIEX: Fidelity Total International Equity with a ytd 11/17/09 return=41.24%.

FDIVX: Fidelity Diversified International with a ytd 11/17/09 return = 30.55%.

FISMX: Fidelity International Small Cap with a ytd 11/17/09 return of 47.45%.

We plan to invest more assets in two Fidelity international funds to get our international stock portion of our overall portfolio closer to 30%.

Should we just increase assets in two of our existing Fidelity international mutual funds, or do you recommend investing in one or two additional Fidelity international mutual fund(s) that we don't currently own?