Multi Asset Funds

[lawman]

More and more financial advisors are predicting equity index funds will get clobbered for the next 8-10 years. With that said I'm curious about how many here agree and to that end how many think it's time to get out of index funds and into multi asset funds. One that caught my eye is a new fund (BLNDX). What says ye?

 

[freedomatlast]

We heard the same thing from the 'experts' 8-10 years ago too.

Probably the same ones that told their clients to sell all their equities the third week of March 2020.

With BLNDX's 1.27% expense ratio, you're down 1.27% right off the bat.

Nobody knows nuthin.

 

[BrianB]

^^^ This ^^^

They are holding 28% cash, so more than a quarter of the ER is you paying them for the privilege of letting them hold your cash.

Also, about 90% of the 59% that is in stocks is in nine Schwab / I-Shares / Vanguard funds that you could simply buy yourself.

https://www.marketwatch.com/investing/fund/blndx/holdings

It's a hard "No" for me.

BrianB

 

[Out-to-Lunch]

You know, you can have a diversified portfolio using a collection of undiversified funds.

 

[easysurfer]

We heard the same thing from the 'experts' 8-10 years ago too.

Probably the same ones that told their clients to sell all their equities the third week of March 2020.

With BLNDX's 1.27% expense ratio, you're down 1.27% right off the bat.

Nobody knows nuthin.

My train of thought too as to how much down right off the bat.

Also, to OP, what's so bad about just trying to follow indexes in the first place?

 

[lawman]

what's so bad about just trying to follow indexes in the first place?

I'm not sure why some think that the indexes are going to get clobbered but I've read that several times lately..

 

[njhowie]

More and more financial advisors are predicting equity index funds will get clobbered for the next 8-10 years.

What do you think financial advisors were predicting in the wake of the financial crisis?

 

[easysurfer]

I'm not sure why some think that the indexes are going to get clobbered but I've read that several times lately..

At times when equities are getting clobbered, yes indexes will get hit hard. But in the long run, hard to beat consistently.

I bet those advisors are trying to scare their clients a bit before making those recommendations to stay away from indexes.

 

[OldShooter]

More and more financial advisors are predicting equity index funds will get clobbered for the next 8-10 years. ...

Really? I doubt this. But regardless, it is mathematically impossible for the average stock picker fund to beat its benchmark. Index funds will always win. Dr. William Sharpe explains: https://web.stanford.edu/~wfsharpe/art/active/active.htm

Ref your question, Multi-asset is probably a code word for including "alternative investments" --- this includes many things including gold, real estate, private equity, farm land, timber, etc.

In general, I would avoid anyone hawking this kind of stuff due to two rules that I recommend to my Adult-Ed investing class students:

"If you don't understand an investment, don't buy it."
​

and

"The more complicated an investment product is, the more likely it is that it was designed to make money for the seller, not to make money for you.
​

@lawman, I haven't gone back to check but my sense is that you have posted a number of questions similar to this, looking for the magic answer to investing. We have all had that dream, but sorry to say, there is no magic answer. Simple indexing is the only strategy that has proven itself to be a winner. It is not trendy and it is boring. I tell my investing students that if you're not bored, you're doing it wrong. Please read "Winning the Loser's Game" by Charles Ellis https://www.amazon.com/Winning-Losers-Game-Strategies-Successful-dp-1264258461/dp/1264258461 (latest edition, May 2021)

 

[lawman]

Really? I doubt this. But regardless, it is mathematically impossible for the average stock picker fund to beat its benchmark. Index funds will always win. Dr. William Sharpe explains: https://web.stanford.edu/~wfsharpe/art/active/active.htm

Ref your question, Multi-asset is probably a code word for including "alternative investments" --- this includes many things including gold, real estate, private equity, farm land, timber, etc.

In general, I would avoid anyone hawking this kind of stuff due to two rules that I recommend to my Adult-Ed investing class students:

"If you don't understand an investment, don't buy it."
​

and

"The more complicated an investment product is, the more likely it is that it was designed to make money for the seller, not to make money for you.
​

@lawman, I haven't gone back to check but my sense is that you have posted a number of questions similar to this, looking for the magic answer to investing. We have all had that dream, but sorry to say, there is no magic answer. Simple indexing is the only strategy that has proven itself to be a winner. It is not trendy and it is boring. I tell my investing students that if you're not bored, you're doing it wrong. Please read "Winning the Loser's Game" by Charles Ellis https://www.amazon.com/Winning-Losers-Game-Strategies-Successful-dp-1264258461/dp/1264258461 (latest edition, May 2021)

Thanks for your reply..Your points are very valid and I lack the knowledge to take issue with anything you said..Having said that I sure wish I had sold my bond funds last year when many were saying "it's time to get out of bonds"

 

[OldShooter]

Thanks for your reply..Your points are very valid and I lack the knowledge to take issue with anything you said..Having said that I sure wish I had sold my bond funds last year when many were saying "it's time to get out of bonds"

No problem. Not one of us was born understanding investing. I hope you read and like the Ellis book.

Regarding past decisions, we all have ones that we wish had been made another way. But that is different than regret. I only regret decisions where the best information at the time should have led me to make a different decision than I made. Things that happened subsequent to the decision don't count. None of us have crystal balls that actually work.

Regarding "many were saying 'it's time to get out of bonds' " there were probably as many or more saying "Hang on." Stick to your asset allocation plan. This too shall pass." Correct guesses always look like wisdom in hindsight. But only in hindsight can you tell whether they were correct.

Wisdom from Warren Buffett: "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell. ... Lethargy bordering on sloth should remain the cornerstone of an investment style."

 

[lawman]

Wisdom from Warren Buffett: "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell. ... Lethargy bordering on sloth should remain the cornerstone of an investment style."

That definitely would not be me..I have owned a large chunk of VFIDX for over 20 years and unfortunately still do..I literally begin to shake on those rare times I trade like I did earlier today..Just for grins I sold VTI today and plan to buy BLNDX tomrrow..only the minimum....That should jinx it for sure!
https://www.standpointfunds.com/fund/commentaries/february-2022

I will have fun watching it..

 

[disneysteve]

Thanks for your reply..Your points are very valid and I lack the knowledge to take issue with anything you said..Having said that I sure wish I had sold my bond funds last year when many were saying "it's time to get out of bonds"

And where would you have put that money? Into stocks, which are also down this year?


Set an asset allocation that works for your needs and goals and timeline and risk tolerance and stick with it no matter what the market is doing. Ignore the so-called "experts". As others have mentioned, they don't know any more than the rest of us and they are often trying to sell something or scare you into hiring them to "manage" your money for you.

 

[lawman]

And where would you have put that money? Into stocks, which are also down this year?


Set an asset allocation that works for your needs and goals and timeline and risk tolerance and stick with it no matter what the market is doing. Ignore the so-called "experts". As others have mentioned, they don't know any more than the rest of us and they are often trying to sell something or scare you into hiring them to "manage" your money for you.

Good point! Good advice! If I hold VFIDX another 20 years I may be very glad I did

 

[Northforker]

Etf's
SCHD
KNG
NOBL
VYM

Stocks
ABBV
AVGO
T
VZ
JNJ
PM
MO
ENB
TD
HD
LOW
LEG
GSL

Thats a good start, put $20k in each and research a place for the rest in cd's

 

[disneysteve]

If I hold VFIDX another 20 years I may be very glad I did

I took a quick look. 3, 5, and 10-year returns in the 3.5-4.5% range, exactly what one would expect for a bond fund I think. Is there some reason you aren't already glad you own it? The YTD return isn't great, down 3 something, but it's not a short term investment.

 

[lawman]

I took a quick look. 3, 5, and 10-year returns in the 3.5-4.5% range, exactly what one would expect for a bond fund I think. Is there some reason you aren't already glad you own it? The YTD return isn't great, down 3 something, but it's not a short term investment.

Yeah the 1 year annual return is -3.00% but the YTD is -7.3%..In answer to your question i will likely never sell..At the current price it is yielding over 3%

 

[mrfeh]

More and more financial advisors are predicting equity index funds will get clobbered for the next 8-10 years. With that said I'm curious about how many here agree and to that end how many think it's time to get out of index funds and into multi asset funds. One that caught my eye is a new fund (BLNDX). What says ye?

I'm starting to see a pattern to your posts, where you hear something from an "expert" or "financial advisors" and are ready to act on it.

I suggest you stop watching/reading such financial porn. It will probably lead to sub-standard results.

Read the bogleheads wiki. It's really all you need to know.

 

[Northforker]

Here is a good starter list to begin research.

https://seekingalpha.com/news/38164...m_source=seeking_alpha&utm_term=27121988.1269

 

[OldShooter]

Etf's
SCHD
KNG
NOBL
VYM

Stocks
ABBV
AVGO
T
VZ
JNJ
PM
MO
ENB
TD
HD
LOW
LEG
GSL

Thats a good start, put $20k in each and research a place for the rest in cd's

How do you come up with this list? Without bothering to look up all the tickers, just by the number of stocks it is not seriously diversified -- which requires many more stocks. It also doesn't appear to have good sector diversification.

William Bernstein gives us good advice:

(on investing for retirement) “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

“Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine.”

 

[Northforker]

Oldshooter,
I actually have 185 positions in my portfolio, as I stated, my list is a "good start". You might want to look at how many sectors that short list covers.

 

[G-Man]

How do you come up with this list? Without bothering to look up all the tickers, just by the number of stocks it is not seriously diversified -- which requires many more stocks. It also doesn't appear to have good sector diversification.

William Bernstein gives us good advice:

(on investing for retirement) “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

“Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine.”

What "William Bernstein" book are your recommending as a good book on retirement investment?

 

[DrRoy]

You know, you can have a diversified portfolio using a collection of undiversified funds.

Multi asset funds tend to have higher fees.

 

[lawman]

Multi asset funds tend to have higher fees.[/QUOTE

For sure but for those of us who think the future is bleak for both bonds and equities it may make sense.. I'm not about to start trading in currencies and commodities..

 

[OldShooter]

What "William Bernstein" book are your recommending as a good book on retirement investment?

Bernstein is a sort of second-tier for me; he offers more complexity than I care to deal with. I do have a few of his books, however.

He provides us with some book selection guidance in the preface to "Rational Expectations." Commenting on his first book "The Intelligent Asset Allocator" he says:

"The density of the book's math and quantitative exposition made it accessible [only to] finance professionals and scientists/engineers. I attempted to remedy that "mistake" but was only partially successful with 'The Four Pillars of Investing.' So then I followed that book with 'The Investor's Manifesto," which either stripped out nearly all the quantitative content or exiled it to optional text boxes."
​

So I think he is telling most of us to choose "The Investor's Manifesto" or another later book.

Actually, my favorite Bernstein piece is "If You Can" https://www.etf.com/docs/IfYouCan.pdf (free 16 page download)