The S&P 500 is currently 120% above its low in March 2009 (financial, how much)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Believe my I feel your pain as my international funds are a bigggg drag. There is just not a lot of money chasing europeN equities. Take MAthJack for instance he is strongly in the invest in US large caps as a lot of their profit is international camp.
i am 5% foreign and 30% domestic with no actual international funds. the foreign exposure from US companies is plenty right now. no global bonds anymore either.
europe is a mess ,emerging markets have inflation issues , china has wage inflation.
we just shifted our manufacturing from china back here because the labor costs have risen so high the spread is gone after shipping costs.
so i have to thinki if we are doing it other companies are too. the rise in manufacturing here is showing just that.
so for now we are the best house in the worst neighborhood.
we have a vested interest in keeping interest rates low too. with 18 trillion in debt every 1 point rise in rates cost another 180 billion to finance.
considering congress shut the gov't down to get a 30 billion dollar cut in spending, bond rates have to be kept low .
so i hold lots of different kinds of bond funds.
you know yellen as the first woman chairman does not want to go on record as the person to bankrupt the country.
Last edited by mathjak107; 11-09-2014 at 02:44 AM..
i am 5% foreign and 30% domestic with no actual international funds. the foreign exposure from US companies is plenty right now. no global bonds anymore either.
europe is a mess ,emerging markets have inflation issues , china has wage inflation.
we just shifted our manufacturing from china back here because the labor costs have risen so high the spread is gone after shipping costs.
so i have to thinki if we are doing it other companies are too. the rise in manufacturing here is showing just that.
so for now we are the best house in the worst neighborhood.
we have a vested interest in keeping interest rates low too. with 18 trillion in debt every 1 point rise in rates cost another 180 billion to finance.
considering congress shut the gov't down to get a 30 billion dollar cut in spending, bond rates have to be kept low .
so i hold lots of different kinds of bond funds.
you know yellen as the first woman chairman does not want to go on record as the person to bankrupt the country.
That is the not discussed enough aspect of all of this and that is the cost of rolling over debt in future years if bond rates rise to much. Not just here but a global threat.
On the other hand the same type of company goes in Europe for cheaper PE, for example Siemens 15.5 vs. ge 17.5 or Volkswagen 7.5 vs Ford 9.3, Allianz 9.8 vs. Metlife 11.2. So if mean reversion is still alive we should at some point see the value advance.
We are both counting on that and it should and could happen sooner than later. It all depends on investor whim in many ways as so much of it is not about valuation but more about follow the money. It has happened before and as always the trick is to get in when prices are low. The reality is that with a Boglehead portfolio folks are probably holding the same funds they did x years ago and riding them up and down. Up now for domestic and down for international. The Fidelity Insight newsletter is out of international in their portfolios and that money went to domestic funds that have obviously beaten international index funds. That's one of the reasons I keep saying that comparing a multi fund index portfolio with a Fidelity Insight folder is apples and oranges. Will the newsletter start recommending global/regional funds with good timing? Who knows? They didn't necessarily pull them out of portfolios at market top or close to it. Their Asian funds were dogs for awhile. Fidelity Nordic can be a good fund but that is like a roller coaster and easy to get in on at the wrong time.
That is the not discussed enough aspect of all of this and that is the cost of rolling over debt in future years if bond rates rise to much. Not just here but a global threat.
very important criteria to consider when looking at holding bond funds. the fed raising short term rates is not a problem but if investors move longer term bond rates we will be in a heap of trouble.
Believe my I feel your pain as my international funds are a bigggg drag. There is just not a lot of money chasing europeN equities. Take MAthJack for instance he is strongly in the invest in US large caps as a lot of their profit is international camp.
loooking at the x-ray on fidelity i see i am :
20% large cap value
22% large cap blend
37% large cap growth
2% mid cap value
6% mid cap blend
9% mid cap growth
2% assorted small cap.
bonds are 75% intermediate duration of highest quality bonds and 25% short duration.
By way of contrast, I've been roughly 35% in US large-cap, 30% US small-cap, 20% Europe and 15% other foreign markets.
Yeah, that's why I chuckle when you guys argue passive v index with him. I am both and know that a Boglehead portfolio and a insight one are not the same these days.
With interest rates being stabilized for now and into the future, may I suggest a consideration in utilities. They produce a nice income stream and are a hedge against market volatility. On a YTD basis, utilities are ahead of the S&P.
We are both counting on that and it should and could happen sooner than later. It all depends on investor whim in many ways as so much of it is not about valuation but more about follow the money. It has happened before and as always the trick is to get in when prices are low. The reality is that with a Boglehead portfolio folks are probably holding the same funds they did x years ago and riding them up and down. Up now for domestic and down for international. The Fidelity Insight newsletter is out of international in their portfolios and that money went to domestic funds that have obviously beaten international index funds. That's one of the reasons I keep saying that comparing a multi fund index portfolio with a Fidelity Insight folder is apples and oranges. Will the newsletter start recommending global/regional funds with good timing? Who knows? They didn't necessarily pull them out of portfolios at market top or close to it. Their Asian funds were dogs for awhile. Fidelity Nordic can be a good fund but that is like a roller coaster and easy to get in on at the wrong time.
For funds I would recommend follow relative strength. That's what I do. Out of a given fund universe one can create an easy RS rotational strategy. I do that with Fidelity Sector Funds or my 401k plan. The more diverse the universe the better. I bet the Fidelity advisory service is doing something similar. That's why they are out of underperforming international funds right now. And let's not forget one very important advantage: you don't need to second guess your own decision it's all done for you. Mathjack mentioned before how important this is.
For funds I would recommend follow relative strength. That's what I do. Out of a given fund universe one can create an easy RS rotational strategy. I do that with Fidelity Sector Funds or my 401k plan. The more diverse the universe the better. I bet the Fidelity advisory service is doing something similar. That's why they are out of underperforming international funds right now. And let's not forget one very important advantage: you don't need to second guess your own decision it's all done for you. Mathjack mentioned before how important this is.
They have a ongoing portfolio of just select funds with rotations as you mention high beta and volatile. The only question is which funds get new taxable county money.
Last edited by TuborgP; 11-09-2014 at 11:23 AM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
see the value advance.
