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February 2006 performance review

Interest rates were down in February, helping bond fund returns. Longer term bonds gained 0.77% for the month, while Vanguard Total Bond Index (which owns all types of investment grade U.S. bonds) rose 0.37%.

Wea Culpa

Jensen has spent a lot of its existence underperforming the market – so why does the fund have a couple of billion dollars under management, and why does it garnish so many accolades in the press and in the analyst community?

Ask MAX: A Fee-Free IRA?

Randy from Ohio asks:

I want to get an IRA started for my wife and I this year. I understand we can contribute $8,000 between the two of us. I have read several sources stating that a self-directed IRA will allow me to keep more of my money.

I have had no problem finding brokerage firms to set up IRAs, but how do I go about doing this without paying a broker? Also, many mutual funds have minimum investments of over $8,000. Are these funds out of the question for me?"

Individual Retirement Accounts were established by an act of congress in 1974, and have been confusing the heck out of individual investors ever since. With no less than eleven distinct varieties of IRAs, ever-shifting contribution limits and distribution formulas you need a degree in advance mathematics to understand, it’s no wonder we're all occasionally left scratching our heads.

February 2006 Trade Alert!

We're keeping our broad bond/stock allocations in our Conservative portfolio to 70% bond and 30% stock (adjusting for a balanced fund). These are tough times for a conservative investor as bond yields are low and value stocks are not cheap anymore – making large allocations to value-oriented stock funds a bit risky. On the plus side, short-term bonds and money market funds finally offer a reasonable yield thanks to recent Federal Reserve rate increases.

Something's Happening Here

The MAXadvisor Newsletter is now MAXadvisor Powerfund Portfolios. But don't worry. Besides the new name, a streamlined design, and some new features, not much has changed. We're managing our model portfolios the way we always have - by choosing the best no-load funds in out of favor categories. 

December 2005 performance review

The Conservative portfolio put in a decent 4.14% showing in '05 – about half of 2004’s 9.35% return, but then the stock market returned more than twice as much in 2004 as well. 


Flipping is more commonly known as an inverted yield curve. In such a rare event, the yield on a 10-year government bond is lower than the yield on, say, a 2-year government bond (technically a note). What’s the big deal? Maybe nothing. Maybe something. Maybe a big something.

November 2005 performance review

Stocks rocketed, but bonds were merely ho-hum in November. The Conservative portfolio rose 0.82% for the month. The S&P500 rose 3.78% while the Lehman Brothers Aggregate Bond Index rose just 0.44%. Smaller-cap stocks were hot, and tech hotter still – areas safe portfolios are light on.

Ask MAX: Gold or Silver

12/08/05 - Ask MAX

Wendell from Florida Asks:

I hear a lot about buying gold, but what about silver? Is it a better buy and will it appreciate more quickly?

Gold gets most of the precious metals investing attention because gold bugs and other crazed anti-central bank fanatics think that gold is money, not a mere commodity like silver or platinum. Get these quacks going on about the good ole’ days and they will wax poetic about how unstable the world has become since we got off the gold standard — ignoring the 13-fold increase in stock prices and explosive growth in the economy that has happened since Nixon put the gold standard to rest for life (we hope). Meanwhile, gold and silver are still cheaper than they were over twenty years ago.

The Fund Christmas Present You Don’t Want

Sure April 15th gets most of the glory, but in the world of mutual funds, tax time is really in December. Why? Because that’s when stock funds typically distribute taxable gains to fund shareholders.