Scary
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[quote=Ron 14]
Back to B24's original point. I just read the June 15 article in WSJ, Is This Bull Cyclical or Secular ? 4 different managers were talked to and they all had different thoughts. How the hell are we supposed to establish a valid market viewpoint ?
[/quote] It's secular, no doubt. I didn't read the article, but I am guessign the bulls have a vested interest in it going up, and the bears have a vested interest in it going down. You have to look at history, PE ratios, and inflation (not just high inflation). I don't think the market is going down much from here. I think it goes relatively sideways for the next 5-7 years until earnings can catch up with the PE ratio. The market level never eases on the regression line, it typically bounces over and under. 1999/2000 saw the PE escalate the furthest above mean in history. Long-term growth and inflation rates don't change. The have been generally 3.5% and 3% forever. The big variable has been the rise and fall of the PE ratio. With so many large companies in the S&P losing money right now, the PE ratio is distorted, so it will take some time to work out valuations. As a caveat, I am not saying I have all the answers as far as how to invest in this environment. But it is safe to say that a more defensive, nimble approach works best in secular bears. Buy-and-hold works the best in secular bulls (like 1982-1999, you could pretty much own anything and do well).What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
[quote=Ron 14]
What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
[/quote] I doubt one would consider an annuity or mutual fund 'nimble'. I guess you could with bonds if you traded them. Ron, ever hear of options?[quote=Ron 14]
What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
[/quote] Yes, yes, and yes, among other things. In a sideways market, you need to lock in some returns. Paying down debt, fixed annuities or VA income riders, intermediate/short bonds....I would stay away from Treasuries right now in favor of TIPS. Emerging market equities and bonds, small caps, currency plays, gold and other commodities. Mind you, I can't necessarily pick the right assets at the right times. I tend to use managers that know how to do this. IVY Asset Strategy (great asset allocator, uses alternatives/commdities/currencies/long-shorts, etc.), First Eagle Global (one of the best value managers ever, utilizes gold and international plays well, but need to watch closely since JM Eveilliard just retired for the 2nd time after 30+ years, but his apprentices have worked with him for years), PIMCO Total Return (bonds, currencies, shorts), Capital Income Builder (for traditional-only asset classes), Franklin Mutual Discovery (great int'l deep-value manager, very defensive, lots of cash, tobacco stocks, healthcare, etc). My core holdings tend to be First Eagle Global, Capital Income Builder, and Mutual Discovery on the equity side (yes, CIB is generally 20-35% fixed income). I then build satellites around them....small caps, emerging markets, bonds (several sub-classes - HY and IG Corp, Int'l, EM, Treasuries, TIPS). Since my core is generally "global", I don't need to add much international or other equity strategies. And I don't necessarily use everythign at once. For example, I have no straight Treasury funds right now, other than TIPS and GNMA's (and whatever is held in my total return bond funds). For smaller investors, I will utilize a total return bond fund like PIMCO or Franklin to get access to all fixed income classes in one fund (for the most part). I would love to add managed futures, but we don't have any good options yet. Generally, I like to just pick the great value managers/asset allocators and let them decide on the micro allocations. I choose the stock/bond/cash mix. Two funds I have been reviewing for about a month are PIMCO All Asset (more bond-oriented asset allocation fund, but uses some ecclectic asset classes as well) and Evergreen Asset Allocation. These are both fund-of-funds, so it's tougher to get my head around them. But the PIMCO fund is advised by Rob Arnott, and the Evergreen Fund is sub-advised by GMO (Jeremy Grantham). Those both qualify for my "great manager" requirements. So that (in addition to consistent performance) is what has piqued my interest. Sorry for the ramble...[quote=Gaddock][quote=Ron 14]
What investments would you recommend for the defensive nimble approach ? Fixed Annuities ? Dividend paying funds ? Bonds ?
[/quote] I doubt one would consider an annuity or mutual fund 'nimble'. I guess you could with bonds if you traded them. Ron, ever hear of options? [/quote] No, annuities are more the defensive, lock-in-returns portion for near-term spending needs. VA income riders are also good for a portion of your income needs. The last time I ran an option was in high school.http://online.wsj.com/article/SB124501817200213499.html - try this, let me know if you get it
That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio.
[quote=Ron 14]
That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio.
[/quote]You should be selling the piss out of the 3 and 5 years. Forget the high commissions…give the people what they want.
[quote=Ron 14]I was until the rates dropped below 3%. [/quote]
Sell some 3 and 5 year index annuities. People love them.
[quote=Alice Cooper]
[quote=Ron 14]
That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio.
[/quote]You should be selling the piss out of the 3 and 5 years. Forget the high commissions…give the people what they want.
[/quote]
What would you say to those advisors pushing wrap accounts that clients don’t like and don’t want?
[quote=Ron 14]
That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio.
[/quote] If you consider 3-year Fixed annuities long-term, then you are right. We have 3, 4, and 5 year (I think I saw a 2-year Protective), all the way out to 10 year (15?). I RARELY sell fixed annuities longer than 5 years.[quote=BerkshireBull]
[quote=Alice Cooper]
[quote=Ron 14]
That is good stuff. I know at EJ you only have longer term Fixed Annuities, but since I am now BankBoy we have 3yr and 5yr with 10-15% money out each year. I love FT Total Return, I use it in every FT portfolio or C share portfolio.
[/quote]You should be selling the piss out of the 3 and 5 years. Forget the high commissions…give the people what they want.
[/quote]
What would you say to those advisors pushing wrap accounts that clients don’t like and don’t want?
[/quote]
I’d tell them to keep it up. It’s good for business.
[quote=Ron 14]
I thought Jones only offered 10+ years, my mistake. Did you get the link ?
[/quote] I did, but I am not a subscriber, so can't read the article.I’m not either, but I could see it. Let me look again. It is right up your alley. If you want to PM me your fax number I can fax it to you.