Putting the pieces together...

Fixed Income One Year and Six Month Total Return

This is one year and also six month total returns  on some monthly payers I own. $10254.01 = 2.5401% total return, etc for each entity. CMOPRB is a single security paying $0.105 per share each month. Doubleline is Grundlach's new ship. The rest should be obvious. 

The six month shows more detail, especially how investment grade fixed income mirrors the stock market but with less volatility.

I suspect that DBLTX doesn't price all its mortgages daily, meaning less liquidity. They may be holding to maturity like Bearhanky is doing.

I am using Vanguard Short Term Treasury VFIRX/VFISX and and also PIMCO's MINT, neither shown here, as money market fund substitutes. MINT has a duration/maturity under one year and had total return just under 1% over the past 12 months.

A Pause

Stocks, gold and natural gas, among others, had good relief rallies this week at least through today, Thursday April 26, 2012. The "crashettes" preceding the lows cleared out a lot of stops. But with 2CS now at 72 and other market-based sentiment measures panting, it might be time for a time-out.

 Natural gas stocks like Canada's ECA are up 13% this week. Many gold stocks are also up. And APBUBBL. ;)

Another Good Fund

Bob Crites sent me a chart of a fund previously unknown to me, Marketfield Fund, MFLDX. The chart is in the same total return or growth format I have been using, running since inception of MFLDX in 2007. MFLDX, PRPFX, and PTTRX each returned an annualized total return of approximately 8.3%  through last Friday,with all dividends reinvested and management fees deducted.
That's a very good return over the whole market cycle from a top to a crash low and back up to another possible top.

 PRPFX is the legacy of Harry Browne which was a radical breakthrough for investors seeking a very diversified, managed portfolio. PTTRX has been Bill Gross's for fixed income total return since Pimco's birth. MFLDX is also run very much like a hedge fund with a wide range of permitted assets, long and short. They are now and were last year primarily in US large caps and some bonds with modest short positions in Europe and in emerging markets. Their recent thinking is almost unique at this time and quite clearly defined in their 2011 annual report. I really appreciate good management theory and practice. I've been looking for this kind of conservative but modern large cap fund for some time. Of course their large cap bias could change with management's evolving market views.

Add LSBDX and FPACX  plus some near cash and gold to the three funds above for a powerful portfolio.

 Marketfield have amassed well over a billion dollars in fund assets in 4.7 years but welcome small accounts. Their management fee is higher than I normally like, but they are doing a lot of original research and have a good program. They are also available commission-free (NTF program) from many brokerage fund "delicatessens", including Vanguard and Fidelity and Schwab.

 

Sentiment High

The high in US stock market bullish sentiment, with the low in 2CS at 57, was on March 20, about two weeks before the last new high of the year for SPX. It is fairly typical to see that type of "sentiment divergence" into the last price high. As of this past week 2CS is back up to 93 which is neither high nor low and therefore not helpful. In late 2006 and 2007 there were multiple rallies which took 2CS into the low 50's and even once into the 40's, so I cannot rule that out for 2012.

Then too, volume studies are suggesting we are into the range for at least a temporary stock market low. We are, of course, all aware of the sell in May and go away story based upon the historical record for minimal total returns from May to September or October. Jitters due to the US and other elections and worldwide central bank interventions are unlikely to improve that typical outcome. However, we can only rely upon technical analysis as we go along. Opinions vary and aren't terribly useful.

I lightened up in most assets since January, but lately have added some beaten up gold stocks and energy stocks on a relative value basis. Gold stocks compared to gold are as cheap as they have been since 2004. But I'm holding a lot more cash than at any time since mid 2007. There's an old saying that no one ever went broke holding cash, and it's a good saying for retired investors like myself.

Including  cash and gold and investment accounts I'm up only 2% on the year after having been up 6.5%. For me that's a pretty big drawdown, so I am going to be very careful not to let it get away from me. I've been interviewing some personal money managers, and the first question I ask is how much did you lose in 2008, and how are you doing this year? Often I don't even get a straight answer. So far I go home and reluctantly decide to keep managing my own funds. I am holding more of a constant core than I ever have and I am just trading around it modestly on a value and sentiment basis. It's more a set and watch closely than a set and forget approach.

The average total return of six favorite funds for the past five years (since 4/12/2007) is 6.91% per year. The funds: VWINX, FPACX, LSBDX, PRPFX, and PTTRX. VFINX, the Vanguard S&P 500 index fund, is up 1.24% over the same period.