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Old 10-07-2008, 10:02 AM   #41
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Just like one of those blow up punching bags with a weight in the bottom.

To answer the question: no. If I want to hold cash, I'll hold cash. I see no reason to give 5.75% of my cash to an adviser followed by 1% a year so they can hold it in cash and underperform everything else over almost any measure.

All I can think of is Donald Sutherland in Animal House trying to give an assignment to the class when they're all leaving, and muttering "Listen, I'm not joking. This is my job!"

We all understand that you have to drink your own koolaid to feel good about it.

Great! so you're going to tell us all the right day to jump back in the market! I can't wait! I'll bet you $100 you miss it.
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Old 10-07-2008, 10:03 AM   #42
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CFB,

Quit confusing people with actual facts, would you?
You guys are so insistent are arguing that you can totally miss the question. Nice job! I'm sure you're doing great right now.
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Old 10-07-2008, 10:09 AM   #43
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Up comes the bag again. Maybe someone might want to pull out that little 1/4" air plug on it. At least I think its the air plug.

Heres a chart of all american funds that invest primarily in US equities losing vs the total stock market index over the past year, without even including the 5.75% front end load.

Go cash and active management!!!

By the way, I'll be sure to pop back in again in a couple of months when the markets take off and the american fund managers are still sitting there holding their cash and they begin to REALLY underperform...
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Old 10-07-2008, 10:11 AM   #44
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Great! so you're going to tell us all the right day to jump back in the market! I can't wait! I'll bet you $100 you miss it.
Thats easy Art. You put the asset allocation in that fits with your risk tolerance and return requirements and you dont take it out, so theres no need to jump back in.

I'll PM you an address to send the $100 to.

Which by the way is way cheaper than 5.75% front end loads and 1%+ expense ratios for an American Funds manager to tell you, since it looks like they arent very good at it.
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Old 10-07-2008, 10:12 AM   #45
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You just don't get it, or you insist on not getting it. The point is moving forward. Would you really rather be holding a fund with no cash to invest, or one that can seek out bargains?
Of course, since you've got all the answers, I'm sure you're going to tell us all when to jump in. I'll be following your posts just for that moment.
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Old 10-07-2008, 10:13 AM   #46
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Yep, we're the ones that just 'dont get it'.

So what you're saying is "We havent gotten it right so far over the last 1, 3, 5, or 10 years, but we're going to get it right after this?".
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Old 10-07-2008, 10:15 AM   #47
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Thats easy Art. You put the asset allocation in that fits with your risk tolerance and return requirements and you dont take it out, so theres no need to jump back in.

I'll PM you an address to send the $100 to.

Which by the way is way cheaper than 5.75% front end loads and 1%+ expense ratios for an American Funds manager to tell you, since it looks like they arent very good at it.

Oh, so you're suggesting we shoot for further losses in funds with no cash to invest. Got it. What else ya' got in the way of advice? That wasn't quite worth $100.
Funny, we should sit through losses, that's ok. But heaven forbid we protect that risk with insurance. That wouldn't make any sense.
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Old 10-07-2008, 10:15 AM   #48
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You just don't get it, or you insist on not getting it. The point is moving forward. Would you really rather be holding a fund with no cash to invest, or one that can seek out bargains?
In a properly constructed portfolio with asset allocation and rebalancing, the rebalancing does just that -- it will take some of the money that was allocated to cash and/or bonds and buy stocks at distressed prices.

Note also that rebalancing led to a somewhat reduced concentration of stocks just before everything started blowing up.
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Old 10-07-2008, 10:17 AM   #49
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Yep, we're the ones that just 'dont get it'.

So what you're saying is "We havent gotten it right so far over the last 1, 3, 5, or 10 years, but we're going to get it right after this?".

I've already posted numerous times how American Funds outperformed +5 years, but you insist it doesn't count because you like adding fees in several times to your figures.
Anyway, I'm looking for ways to make money in the future right now. You keep living in the past. BTW, how you doing this year? Got a nice profit, do you?
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Old 10-07-2008, 10:19 AM   #50
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What else ya' got in the way of advice?
Yes. Dont waste your money on underperforming American Funds.

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That wasn't quite worth $100.
Neither are American Funds, and they charge a lot more than that!

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Funny, we should sit through losses, that's ok. But heaven forbid we protect that risk with insurance. That wouldn't make any sense.
But it makes more sense to put money in funds that on average lose even more money? I guess once its gone you no longer have to worry about it anymore.

And with those actively managed funds, you've got a fund manager ready, willing and able to lock in the losses rather than just be able to wait for a rebound.

Do you even think about this stuff for a couple of minutes or do the fingers type it out all by themselves?
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Old 10-07-2008, 10:20 AM   #51
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In a properly constructed portfolio with asset allocation and rebalancing, the rebalancing does just that -- it will take some of the money that was allocated to cash and/or bonds and buy stocks at distressed prices.

Note also that rebalancing led to a somewhat reduced concentration of stocks just before everything started blowing up.

Ziggy, if you're buying index funds, you're fully invested. You are much more likely to see mass withdrawals than you are an influx of new cash. It doesn't matter if they're allocated if they're all unmanaged portfolios. They will be forced to liquidate. Yesterday's market was a great example in small part what a mass liquidation can look like.
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Old 10-07-2008, 10:23 AM   #52
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Yes. Dont waste your money on underperforming American Funds.



Neither are American Funds, and they charge a lot more than that!



But it makes more sense to put money in funds that on average lose even more money? I guess once its gone you no longer have to worry about it anymore.

And with those actively managed funds, you've got a fund manager ready, willing and able to lock in the losses rather than just be able to wait for a rebound.

Do you even think about this stuff for a couple of minutes or do the fingers type it out all by themselves?
Sure, you've convinced all your do it yourself buddies not to take money out. Perhaps you can wrestle Cramer for control of the airwaves?
Even when the market tanks and you are losing your money, you maintain that air that you know what you're talking about. You must be a thrill at parties. I'm sure you're happy with the thought that at least you didn't lose quite as much as your neighbor. Don't be proactive though.
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Old 10-07-2008, 10:23 AM   #53
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Ziggy, if you're buying index funds, you're fully invested.
In the stock market? Not if you are using an asset allocation model that also includes bond funds and perhaps cash (money markets).
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 10-07-2008, 10:25 AM   #54
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In the stock market? Not if you are using an asset allocation model that also includes bond funds and perhaps cash (money markets).

Bond funds get killed just like stock funds. Now if you're talking about individual bonds you've got a chance, but then again, we've seen how useful those bond rating services were. As to cash, it's great to live on, but history has shown that people sitting on cash, will miss the best returns days by being on the sidelines. It's a tough strategy at best.
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Old 10-07-2008, 10:29 AM   #55
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Bond funds get killed just like stock funds.
Ridiculous.

Maybe *junk* bonds will get killed along with stocks in a bear market induced by a fears of a terrible economy, and maybe to a *small* degree corporate bonds will lose a little bit of value in a panicked environment where people are afraid of mass business failures, but when the market is down 30% from its peak as this one is, there's no way bonds lose anywhere near that. And in many bear market environments, bond funds *rise*.

My bond funds were up in 2001 and 2002, and they're down about 4% this year (which beats the hell out of being down 20% like my stocks). As a result, I was able to sell bonds and buy more stocks when I rebalanced in 2002, which wound up increasing my returns for the next four years.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 10-07-2008, 10:34 AM   #56
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Ridiculous.
I have some better words. Maybe Art can continue posting in the joke thread.

How about this for hilarity?

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Anyone seeing an advantage yet to a mutual fund currently holding cash? Just wondering.
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As to cash, it's great to live on, but history has shown that people sitting on cash, will miss the best returns days by being on the sidelines. It's a tough strategy at best.
I think we've just identified one of the reasons why American Funds underperform an index, even without factoring in the 5.75% front end load.
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Old 10-07-2008, 10:38 AM   #57
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Ziggy, I'm curious as to your funds?
Corporate bond funds are down for two reasons, the quality of the company and the ratings agencies. Muni bonds are down because of the ratings agencies, it's the reason muni bonds are a buy right now.
Again, I have some GMAC bonds currently valued at $28! GMAC was not a junk bond when I bought it.
I've had some of my biggest losses ever in short term bond funds. I'd much rather own individual bonds. JMO
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Old 10-07-2008, 10:42 AM   #58
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I have some better words. Maybe Art can continue posting in the joke thread.

How about this for hilarity?





I think we've just identified one of the reasons why American Funds underperform an index, even without factoring in the 5.75% front end load.

Geez! How many times you gonna post that front end fee? I can move around within their portfolio at no cost, I can get out and back in within 60 days with no cost.
However, I'd much prefer to trust them with the extra cash than to trust you. At least it's obvious to everyone that you're very emotionally reactive with your money.
I'm pretty much bored with you. You keep stating the same things again and again, you manipulate the numbers to suit your needs, and apparently you can't grasp a point.
So, is there anyone else out there that wishes your mutual funds were currently holding cash?
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Old 10-07-2008, 10:43 AM   #59
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Ziggy, I'm curious as to your funds?
ETFs, actually -- half in AGG and half in TIP. AGG has been fairly bad recently with increasing panic about anything but government-backed debt, but it still has way outperformed my stocks and significantly reduced my losses YTD.

I think the short term bond funds that are seriously melting down are the ones which had a lot of MBS paper and thus saw their NAV killed by mark-to-market rules on illiquid securities that no one wanted, even if they were performing. Google "Schwab Yield Plus" for more.
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RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 10-07-2008, 10:46 AM   #60
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Definitely belongs in the joke thread.
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