The Lifelong Learner
:: Do what you can, with what you have, where you are -Roosevelt ::
The Lifelong Learner
:: Do what you can, with what you have, where you are -Roosevelt ::
Barron’s has a lead article titled “Invest in Japan.” What do you think? Time to jump in after the huge tragedy? From my own experience, tragedies are one of the best times to jump in. Take 9/11, quick slide, nice and quick recovery. Will Japan be the same? Nobody really knows, especially with the current level of uncertainty.
If you do want to invest, as I’m thinking about it, I think investing in ETFs is the smart way to go.
| Exchange-Traded Funds | |
| Ticker | Currency |
| FXY | CurrencyShares Japanese Yen Trust |
| JYN | Barclays iPath JPY/USD |
| JYF | WisdomTree Dreyfus Japanese Yen |
| Stocks | |
| EWJ | iShares MSCI Japan Index |
| DXJ | WisdomTree Japan Hedged Equity |
| DFJ | WisdomTree Japan SmallCap Dividend |
| ITF | iShares S&P/Topix 150 Index |
| JSC | SPDR Russell/Nomura Small Cap Japan |
| SCJ | iShares MSCI Japan Small Cap Index |
| JPP | SPDR Russell/Nomura PRIME Japan |
While at the Barnes & Noble today, I got drawned in by a title in US World & Reports: The 100 Best Mutual Funds for the Long Run. Sure enough, I found a few funds that I think are top quality.
Comparing it to Fidelity Contrafund, which is considered one the top funds, I can see why Yacktman is on top: 3 year return of 8.9% is much better than -0.2% for the Fidelity fund.
Very good returns. Better than Marsico Global, also a top rated fund.
Very good returns.
In my retirement accounts, I only hold Mutual Funds. Why? More security. More diversity. I’m also open to holding ETFs, which are almost like Mutual Funds, but I try to stay away from stocks.
It’s good to rebalance every year or so. It’s been a while since I’ve done it. But because we had a decent dip recently, I think it might be a good time for me to do so. Plus, I have come across some excellent Mutual Funds in the Kiplinger’s magazine — I always try to buy their yearly issue focused on Mutual Funds.
Here are some funds which I like and which I picked mostly from that issue. I’m entering trades as I’m writing this post.
A pair of the best and most famous bond funds, as per Kiplinger’s.
(also available as an ETF, )
Another of our favorites, same source.
The portfolio of Harbor more or less reflects the distilled wisdom of Bill Gross and his colleagues at Pimco. Kiplinger’s top 25 pick.
(also available as an ETF, )
For added security, it’s always have to have some TIPS.
Recently reopened. Kiplinger’s Top 25.
Kiplinger’s Top 25. Impressive returns.
Very good returns. Kiplinger’s top 25 pick.
Good returns as well. I like it.
There you have it!
Here are some funds that offer diversified exposure to the emerging markets in Europe, Asia, Africa/Middle East, and Latin America. These are taken from the latest BusinessWeek, Dec 28th edition.
Sorted by 2009 Total Return
98% Europe, 1% Asia, 1% Latin America
70% Africa/Middle East, 30% Europe
100% Africa/Middle East
51% Latin America, 26% Africa/Middle East, 17% Europe, 6% Asia
50% Africa/Middle East, 25% Asia, 22% Europe, 3% Latin America
Invest 10% in all of these 10 ETFs and you got yourself something close to what an Ivy League portfolio looks like. For more information, check theivy.portfolio.com
Reference
Kiplinger’s Magazine – 11/2009 Issue
There was an interesting observation in the S&P Outlook recently. Since 1945, in the period from November-April, the S&P 500 returned 7.19%; in the May-October period, just 1.6%. What do do? Sell in May, and Buy back in November!
I think this is true this year. I feel like we’re due for a correction. It might be a good time now, especially after the recent records.
They recommend doing the following.
For May-October overweigh- consumer staples- health care
For November – April overweigh- financials- industrials- materials- consumer discretionary- information technology
Now that’s an interesting observation…
Here’s a chart that breaks the returns by month, averaged since 1950.
I like Vanguard as a company. I have been with them for a couple of years now. I like what they offer: both, in terms of fund selection, and in terms of the services they offer.
Why would I want to invest in Vanguard funds? First, they give you a good selection. And second, you can put your investments on auto pilot: you can actually do dollar-cost averaging at no cost!
So far, I have invested in 2 funds at Vanguard (NJ Tax-Free Fund; and S&P Index Fund). Every month, $50 gets automatically invested into each of them from my bank account. I really like that.
The downside? There is usually a $3K minimum investment for each of the funds. (It would be great if it was $1K.)
I am planning to shift some of my money from my brokerage account into Vanguard. Like I said, having an auto pilot is a very good benefit for me.
Here are some of the funds at Vanguard that I find interesting (besides the 2 I own). You can take a look at all of them at https://flagship.vanguard.com/VGApp/hnw/FundsByTypeSec
Taxable Short-Term Bond
Average annual return: 4.96% (1 year) 3.68% (5 year) 5.13% (10 year)
Balanced
Average annual return: 9.79% (1 year) 8.63% (5 year) 8.94% (10 year)
60% bonds; 40% stocksAverage annual return: 10.69% (1 year) 7.26% (5 year) 8.51% (10 year)
32% bonds; 65% stocksAverage annual return: 12.85% (1 year) 9.04% (5 year) 9.52% (10 year)Negative: 10K initial investment required
Domestic Stock – General
Average annual return: 17.84% (1 year) 7.56% (5 year) 6.84% (10 year)
Average annual return: 17.19% (1 year) 10.90% (5 year) 9.89% (10 year)
International/Global Stock
Average annual return: 18.94% (1 year) 18.05% (5 year) 9.67% (10 year)
Average annual return: 19.64% (1 year) 17.41% (5 year) 8.15% (10 year)
Average annual return: 19.12% (1 year) 17.94% (5 year) 12.50% (10 year)
Here are my current holdings in the beginning of 2007. My strategy now is still go with a defensive lineup and also diversify more internationally. I also decreased my position in energy. I’m going to stick to my strategy and even increase my exposure to ETFs and opt for less risk than investing in individual stocks.
: $68: A giant that’s beaten up a bit. Should recover. Quality stock..
: $36: Quality company with good management. Diversified. Looks cheap.
: My recent addition. Company makes good products, moves into more healthy oriented products. Good international player.
: Panasonic makes the best plasmas and cameras. Good growth potential.
: It’s beaten down now but a quality company with very good growth potential.
: One of the biggest and beaten down. Good pipeline.
: I believe content is the king and will eventually provide the most value. I’m losing my patience with AOL and I might unload in the near future.
: I’m still optimistic about the fiber rollout. The best wireless provider.
: I think Yahoo is cheap compared to Google. Good search technology. Very good growth potential. Cheap.
: The biggest energy player. Safe bet.
My current ETFs
: It slowed down recently but still a good diverifier.
: Recommended by S&P, good diversified holding.
: Recommended by S&P. A lot of potential growth.
: Japan is recovering. Recommended by S&P.
: Telecom is a good defensive sector.
: Recommended by S&P.
: I am a big fan of companies that keep increasing their dividents. This ETF is focusing on that.
: Similar story to SDY, divident focused with a little different lineup.
: Over the years, the S&P index beats most of the funds.
: Is energy ever going to go down? Probably, but not anytime soon it looks like.
: Baby boomers are starting to retire. Health care has very good growth potential.
: Even in a slow economy, people still need to buy everyday products. Good defensive player.
: I hold it because it’s recommended by S&P. I do think that diversification in bonds is imporant.
: Recommended by S&P.
Whoa, that took me some time. I have 3-5% in most of these, with around 7% for the S&P Index.
I am just looking over the 2006 Semi-Annual iShares MSCI Series report I received today. I’m thinking, US economy will slow in the next year or two. Looking at the markets outside of US, I might want to invest in other assets.
For instance, iShares Australia Index (EWA). 1 year return: 15.83%; 5 year return: 148%.
Brazil Index (EWZ): 1 year: 70%; 5 years: 187%
Canada Index (EWC): 1 year: 33%; 5 years: 103%
Mexico Index (EWW): 1 year: 45%; 5 years: 194%
Those are some impressive returns. I like Canada and Australia indexes: stable countries with very good results. I should have invested in Brazil when it went down a year or two ago; same with Mexico.
Here are the four best indicators for tracking the economy, as recommended by Money magazine.
Follow these indicators and you’ll be as well informed as many professional investors.
Bureau of Labor Statisticts employment report (available bls.gov/ces), which tracks job creation.
The ISM Reports on Business (ism.ws), which take the pulse of the nation痴 industrial and service sectors by surveying executives in fields ranging from agriculture to retailing.
Consumer Confidence Index (conference-board.org), which gives a sense of consumers� willingness to spend and thus spur economic growth.
U.S. Leading Index (also at conference-board.org), a compilation of 10 economic indicators designed to predict how the economy will be behaving three months down the road
