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Frequent Contributor

Re: mlott1 portfolio changes

I believe that @mlott1 has mentioned several times that he had to use up most of his savings/investments for personal/medical reasons, and after a gap of many years, he is restarting on those. Posters who didn't bother to read what mlott1 wrote before and jump to conclusion that he was doing market timing seem insensitive. They should be thankful for their own good fortunes and move on - if they don't have anything constructive to offer.

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Re: mlott1 portfolio changes

@yogibearbull  Thanks for the post, Yogi.  I had already taken a deep sigh at the thought of maybe recapping my situation once again.  I'm the first to agree that market timing doesn't work.  And as I mentioned a little while back, my selling the global income builder fund was not trying to time the market, it was simply part of a longer range plan to reposition my portfolio, and selling when the stock market was at a high seemed like a good idea.  And since my retirement does not depend on stock market gains, right now I prefer to turn my attention towards my fixed income investments, as my monthly expenses have modestly increased with my move to an apartment, and will increase a bit more late next year when I start paying Medicare Part B premiums.  So I'm assembling another income stream should I need or want it.  

No market timing here, just some planning and rearranging.  

@outandabout  A most timely post, thanks.  Some good, constructive thoughts.  

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Re: mlott1 portfolio changes


@yogibearbull wrote:

I believe that @mlott1 has mentioned several times that he had to use up most of his savings/investments for personal/medical reasons, and after a gap of many years, he is restarting on those. Posters who didn't bother to read what mlott1 wrote before and jump to conclusion that he was doing market timing seem insensitive. They should be thankful for their own good fortunes and move on - if they don't have anything constructive to offer.


Well said Yogi.  

I have gotten most of my exercise by jumping to conclusions and have learned to regret it.

helmut 

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Re: mlott1 portfolio changes


@yogibearbull wrote:

I believe that @mlott1 has mentioned several times that he had to use up most of his savings/investments for personal/medical reasons, and after a gap of many years, he is restarting on those. Posters who didn't bother to read what mlott1 wrote before and jump to conclusion that he was doing market timing seem insensitive. They should be thankful for their own good fortunes and move on - if they don't have anything constructive to offer.


I don't believe best practices in portfolio management have anything to do with net worth, and actually, those with limited resources should probably pay greater attention to best practices than others. Sorry if this post is insensitive. 

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Re: mlott1 portfolio changes

@DJANG0 , I have a relative who blew through his savings, investments and retirement funds and got into a huge credit card debt for medical expenses of a close blood-relative. Was it advisable? No. Best practices? No. But I helped him get back to his feet. 

There is a difference in giving a helping hand to people who may act imprudently out of emotions vs those who may blow it on drugs, skirts and gambling.

IMO, @mlott1 got into a financial jam, got out of it, and posters should offer constructive advice, if they can. Just citing low-cost Bogle-mantra of staying the course and avoid market-timing are not appropriate for this/his situation, as I understand it.

Size of anybody's portfolio is not important. The other day, I was going over my 12-year old granddaughter's "small" UTMA portfolio with her [well, not "so small" for that age]. She has somethings that she can understand, or I teach her in language that she understands. She doesn't care what anyone else has/owns.

 

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Re: mlott1 portfolio changes

Ultimately, if things get bad enough, your portfolio is simply a last line of emergency money, which is pretty much what happened to me, and yes, it was medical expenses.  At my low point I had $15 left in an online savings account and two $100 I-Bonds.  But the silver lining in the situation was that at least I didn't have to go into debt, although, as the Duke of Wellington supposedly said, "It was a close-run thing".  

One thing that has really helped me is that, like the hedgehog, I had one big idea years ago, and that was to get a job with the Federal Civil Service after my eight years of active duty in the Air Force, so that I would one day have an actual pension.  Growing up, I had an uncle who went into civil service after retiring from the Navy, and everyone in the family was in awe that he was getting a retirement check from the Navy, a retirement check from civil service, and social security.  Everyone else in the family was living day to day and paycheck to paycheck, and he had a nice little house (with orange trees!) in St. Petersburg and had actual money to spend.  

Which is a long-winded way of saying that at least I had the stability of a monthly retirement check, which although small, was safe and secure.  That was a lifesaver in a really rough patch.  I at least had enough coming in for the very basics.

I started drawing social security in Nov 2017, which was a significant increase in my monthly income, so after a few months of rebuilding my emergency money funds, I was able to start rebuilding my investment portfolio, and made some initial investments back last summer (2018).  

Things are looking a lot better these days, for which I am very grateful.

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Re: mlott1 portfolio changes

Fine and honest post, mIott.  My prayers and wishes of prosperity to you.

Stand fast to your personal goals. This life is but a test for the next one.

Out.

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Re: mlott1 portfolio changes


@outandabout wrote:

This life is but a test for the next one.


Well, that’s debatable. Many would say, live this life as if it’s the only one, because it is. I happen to fall into that camp.

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Re: mlott1 portfolio changes

This post may come as a bit of a surprise, but I have (re)discovered a stock fund that I will very likely start buying in the new year, in a small way.  First Eagle Global (SGENX).  Stocks and gold, looks like they are carrying close to a ten percent position in gold right now.  

At Schwab, it is no load, no transaction fee, and a whopping one hundred dollar minimum investment.

I love the Schwab platform.

I was very interested in this fund years ago when it was managed by the legendary Jean Marie Evillard, but the front load put me off, and I think there were some other impediments, probably an initial minimum higher than I was prepared to meet.  This is a fund that I could see myself holding for the long term, and just adding to it on downturns or even more severe market moves.  I also very much like the idea of a small position in gold, so gold as part of the portfolio is a plus for me.

I was reminded of this fund by FD's post that had a link of an economic outlook for 2020 and had a connection to the fund, and he mentioned the fund specifically.  Just out of idle curiosity I pulled up the fund the next time I was on the Schwab site, and that was when I saw, much to my surprise, no load, no fees, low minimum.  Eureka!

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Re: mlott1 portfolio changes

World-allocation SGENX is no-load/NTF at both Fido [min $2,500] and Schwab [min $100]. It has always had a small gold bullion exposure.

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Re: mlott1 portfolio changes

 

mlott1,

Matthew McLennan, a First Eagle Global Fund manager, was a guest on two of the most recent Wealthtrack episodes.

 

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Re: mlott1 portfolio changes

mlottt: “it was simply part of a longer range plan to reposition my portfolio, and selling when the stock market was at a high seemed like a good idea.”

ml: you know I am the first person to say that you need to sleep well and be comfortable with your risk level (or what you perceive to be your risk level). But I can’t let this comment go by without a comment. Selling at a market high is (IMO) not always a good idea. In fact, I would say that, not knowing anything else, it’s quite possibly not a good idea.

But again, I don’t know what your starting and ending points were, how much you sold, or any details about your overall picture. So I am not criticizing anything. I am just adding a mild counterpoint to your comment.

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Re: mlott1 portfolio changes

@chang  No offense taken at your post, but you might want to keep in mind that my original posted reason for selling was that the fund was an allocation fund with a mix of stocks and bonds.  There was quite a bit of discussion here a few months back about the advantages of having separate funds for stocks and bonds, vs. a balanced or allocation fund, and the more I thought about it, the more I could see the advantages of separating the stocks from the bonds.  I decided that's what I wanted to do.  And selling at a market high sure seemed better than selling at a low point.  

In a perfect world I would have just set the fund aside and not added any more money to it, but I'm a small investor still in the early stages of rebuilding a portfolio, so I'm trying to be super focused with my resources.  

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Re: mlott1 portfolio changes

I agree with separated funds for equities and bonds, for a lot of reasons. But then, if you sold a hybrid fund, you would want simultaneously to buy equal amounts of stock and bond funds. Selling to cash is a change in your AA, rightly or wrongly.
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Re: mlott1 portfolio changes

mlott1, a bit of history.  SGENX was managed for decades by the legendary Jean-Marie Eveillard.  He had one of the best risk-adjusted-performance.  I owned this fund for about 10 years 1999-2009(maybe 2010) but sold when US stocks were the best place to own. Now, it may be a good time to diversify globally.  SGENX always had gold.  The managers always used value investing. 

Right(link) now it has over 14% in cash and over 13% in gold-related which is above the fund norm.  They have nothing in bonds.

sgenx.PNG
 
I would also look at 2 other world funds and both use bonds which are the only real diversifier to stocks.  While SGENX + RPGAX have more international than US stocks, LGMAX has 2/3 in US.
 
PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino RatioUS Mkt Correlation
LGMAX8.17% 8.98%22.69%-5.23%-10.00% 0.821.340.93
RPGAX5.98% 7.42%17.02%-6.87%-9.86% 0.691.090.92
SGENX5.88% 8.65%16.86%-8.51%-11.81% 0.5910.88
 
Chart of all 3. See it below
sgenx1.PNG
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Re: mlott1 portfolio changes

@FD1001  Thanks for the post, some good info.  Like I said earlier, I used to follow SGENX and I'm aware of the history and their approach, but I hadn't been keeping up with them very much for a while now, so this is all good information and helps me get current with them.  I like the value approach, and their gold holdings.  I've long thought to own a little gold, but I could never bring myself to buy, so having a fund manager do it for me sounds like a good idea.  And it seems as though they generally have a meaningful position, but not enough to overwhelm the stock portion of the portfolio.  I'm not going to do anything until the new year, but I do plan on establishing an initial position when we roll over into the new year.  I will use this as a core fund for my stock exposure, and it could very well be my only stock fund.  I can easily see myself holding this fund indefinitely, and just buying more on any stock market downturns (and I've been investing long enough to know from firsthand experience that I do have the temperament to do that).

@chang  I was never planning on staying out of the stock market forever, but I was/am not in any particular hurry to get back in.  In fact, after I cashed out the income builder fund I had it in mind that I would use 2020 as a year of just adding to my fixed income investments.  I've never worried/fretted about my portfolio allocation.  But then I was reminded of SGENX and the more I thought about it, the more I liked the idea.  And it being a world allocation fund, I feel a little more comfortable buying that instead of an all domestic stock fund.  

 

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Re: mlott1 portfolio changes

Hi mlott1. Looking at the last 10 years a fund like VTI trounced SGENX to the tune of 14.5% to 9% CAGR. Sure VTI is more volatile but to give up that kind of growth is hard to do. SGENX pays nice DIVS and CG distributions but if you want to control the taxable income then an ETF like VTI is much better. Generally global investing hurts the US component. Just more food for thought. 

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Re: mlott1 portfolio changes

@Gary1952  Thanks for the post.  I am aware that any number of funds have a greater overall return than SGENX, but for my temperament, something like SGENX is more to my liking.  And to be honest, this is about the only way I'm going to get back into the stock market.  A combination of domestic and foreign stocks with a side of gold is about all I can tolerate, and even SGENX will be in small doses.  More a diversification play than a conviction buy, but I do recognize that a portfolio entirely of fixed income is not optimal.  

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Re: mlott1 portfolio changes

Just a follow-up to my last post, which I forgot to include.  Between my small retirement annuity and social security, my income is modest at best.  I'm in the 15% tax bracket, so I pay very little in federal taxes, and at the state level, between the standard deduction and an additional deduction for pensions and annuities, I no longer have to pay any state (Delaware) income tax.  When it comes to investing, I don't really have to worry about tax ramifications.  

This doesn't really have anything to do with investing, but in Delaware there is no sales tax.  I am not a spendy person, but that helps the money go a bit further.  Overall, I'm probably about as lightly taxed as a person with an income can be.  

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Re: mlott1 portfolio changes

Just a few comments regarding SGENX. It is no doubt a good world allocation fund, but it is not without risk. It has around 76% stocks, split between domestic and international and the max drawdown is 32.61%, not the 11+% in a prior post. If you're concerned about safety first, this may not be the fund for you.  

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