In recent commentary we noted pending trades to move us away from higher risk, cyclical bond and stock categories and towards lower default risk bonds and less cyclical stock fund categories. We want to be in fund categories that other investors are avoiding. During the last hurrah of this market comeback, investors are piling back into foreign markets, junk bonds, small cap, natural resource and commodities, and the like. We prefer these areas when other investors are heading to safety and prices are lower. Investors are scared of inflation, and this usually means inflation will not be a big problem.
Recent increases in U.S. government bond prices as investors, panicked about Greece, back off of higher risk bonds are keeping us from moving into longer term government bonds (as we alluded to last month). However, at this time but we’re still cutting back on high yield (junk) bonds.
As always check with your fund or broker on short term redemption fees, if any, on selling fund shares and try to minimize all such fees. Also consider trying to book long term capital gains where possible. We have owned these funds for over a year but that doesn’t mean you have.
We're making trades in the Conservative portfolio, effective 5/31/2010:
Sales:
- REDUCE Janus Global Research (JARFX) from 10% to 5%
- SELL Vanguard U.S. Value (VUVLX) from 5% to 0%
- REDUCE Metropolitan West H\Y M (MWHYX) from 10% to 5%
Buys:
- INCREASE Dreyfus Bond Mkt Idx Bas (DBIRX) from 10% to 20%
- NEW ALLOCATION American Century Utility Income (BULIX) to 5%
NOTE: Janus Enterprise (JAENX) has a 2% redemption fee for shares held less than 90 days. Do not sell any JAENX shares bought in the last 90 days, wait to make this trade.
Result:
A reallocation from 55% stock funds and 45% bond funds to 50% stock funds and 50% bond funds.
In recent commentary we noted pending trades to move us away from higher risk, cyclical bond and stock categories and towards lower default risk bonds and less cyclical stock fund categories. We want to be in fund categories that other investors are avoiding. During the last hurrah of this market comeback, investors are piling back into foreign markets, junk bonds, small cap, natural resource and commodities, and the like. We prefer these areas when other investors are heading to safety and prices are lower. Investors are scared of inflation, and this usually means inflation will not be a big problem.
Recent increases in U.S. government bond prices as investors, panicked about Greece, back off of higher risk bonds are keeping us from moving into longer term government bonds (as we alluded to last month). However, at this time but we’re still cutting back on high yield (junk) bonds.
As always check with your fund or broker on short term redemption fees, if any, on selling fund shares and try to minimize all such fees. Also consider trying to book long term capital gains where possible. We have owned these funds for over a year but that doesn’t mean you have.
We're making trades in the Aggressive Growth portfolio, effective 5/31/2010:
Sales:
- SELL Nakoma Absolute Return (NARFX) from 5% to 0%
- SELL Bridgeway Blue-Chip 35 (BRLIX) from 20% to 0%
Buys:
- NEW ALLOCATION American Century Utility Income (BULIX) to 5%
- NEW ALLOCATION PIA Short-Term Securities (PIASX) to 20
RESULT:
Going from 90% stock funds and 10% bond funds to 70% stock funds and 30% bond funds.
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In recent commentary we noted pending trades to move us away from higher risk, cyclical bond and stock categories and towards lower default risk bonds and less cyclical stock fund categories. We want to be in fund categories that other investors are avoiding. During the last hurrah of this market comeback, investors are piling back into foreign markets, junk bonds, small cap, natural resource and commodities, and the like. We prefer these areas when other investors are heading to safety and prices are lower. Investors are scared of inflation, and this usually means inflation will not be a big problem.
Recent increases in U.S. government bond prices as investors, panicked about Greece, back off of higher risk bonds are keeping us from moving into longer term government bonds (as we alluded to last month). However, at this time but we’re still cutting back on high yield (junk) bonds.
As always check with your fund or broker on short term redemption fees, if any, on selling fund shares and try to minimize all such fees. Also consider trying to book long term capital gains where possible. We have owned these funds for over a year but that doesn’t mean you have.
We're making trades in the Conservative portfolio, effective 5/31/2010:
Sales:
- REDUCE Janus Global Research (JARFX) from 10% to 5%
- SELL Vanguard U.S. Value (VUVLX) from 5% to 0%
- REDUCE Metropolitan West H\Y M (MWHYX) from 10% to 5%
Buys:
- INCREASE Dreyfus Bond Mkt Idx Bas (DBIRX) from 10% to 20%
- NEW ALLOCATION American Century Utility Income (BULIX) to 5%
NOTE: Janus Enterprise (JAENX) has a 2% redemption fee for shares held less than 90 days. Do not sell any JAENX shares bought in the last 90 days, wait to make this trade.
Result:
A reallocation from 55% stock funds and 45% bond funds to 50% stock funds and 50% bond funds.
In recent commentary we noted pending trades to move us away from higher risk, cyclical bond and stock categories and towards lower default risk bonds and less cyclical stock fund categories. We want to be in fund categories that other investors are avoiding. During the last hurrah of this market comeback, investors are piling back into foreign markets, junk bonds, small cap, natural resource and commodities, and the like. We prefer these areas when other investors are heading to safety and prices are lower. Investors are scared of inflation, and this usually means inflation will not be a big problem.
Recent increases in U.S. government bond prices as investors, panicked about Greece, back off of higher risk bonds are keeping us from moving into longer term government bonds (as we alluded to last month). However, at this time but we’re still cutting back on high yield (junk) bonds.
As always check with your fund or broker on short term redemption fees, if any, on selling fund shares and try to minimize all such fees. Also consider trying to book long term capital gains where possible. We have owned these funds for over a year but that doesn’t mean you have.
We're making trades in the Aggressive Growth portfolio, effective 5/31/2010:
Sales:
- SELL Nakoma Absolute Return (NARFX) from 5% to 0%
- SELL Bridgeway Blue-Chip 35 (BRLIX) from 20% to 0%
Buys:
- NEW ALLOCATION American Century Utility Income (BULIX) to 5%
- NEW ALLOCATION PIA Short-Term Securities (PIASX) to 20
RESULT:
Going from 90% stock funds and 10% bond funds to 70% stock funds and 30% bond funds.