The Conservative Portfolio fell -3.08% in November.
Compared to October, November was a gangbuster month for stocks. The S&P fell only 7.18%, the Nasdaq and Russell 2000 dropped by double-digits, and the Dow posted a 4.86% loss. Government bonds were the only true winner. The Lehman Brothers US Government Long Bond Index gained a blistering 11.78% as interest rates on government bonds plunged to record lows caused by investors panic buying the safest investment around. Too bad Lehman didn’t own more government bonds - they might still be in business. What did Lehman load up on near the end? Commercial real estate – REITs were about the worst performing area last month with a roughly 25% drop.
While none of our portfolios performed as poorly as the S&P 500, our ’downward participation’ is climbing due to our increased stakes in stocks. Over the last 12 months however, our worst performing portfolio did a full 10 percentage points better than the S&P 500.
Frankly, we should be doing better in our higher risk accounts even with the larger stock stakes. We’ve been shorting the hardest hit areas in the market – real estate and emerging markets. In fact we’ve been shorting real estate since the top of the real estate bubble in our Daredevil portfolio. Unfortunately the few fund options around to put such timely calls to work deliver little long term gains– these ETFs are more useful as trading vehicles that offer protection from short, sharp drops.
The good news is our just-published annual year end <a href="http://maxadvisor.com/newsletter/reports/MAX.2008.distribution.report.pdf">capital gains report</a> has no fund taxable distributions worth taking great pains to avoid (Bridgeway Balanced BRBPX being the most noteworthy). Those adding new money should wait until the record dates pass nonetheless – there is no use drawing a taxable distribution that can be avoided by waiting a few days. Much of the good tax news is because the market is down, but we have also gotten out of hotter funds that could be realizing gains after forced sales by other performance chasing investors. Moving into out-of-favor funds and categories tends to be pretty tax efficient (in addition to being performance-enhancing).
On the tax issue, this is a good time to realize some losses if you have some gains from previous sales this year. Some of the Powerfunds are probably down since you bought them and some are replaceable with similar funds. Buy one as you realize the loss in another fund (watch out for tax rules buying the same exact fund back shortly after selling it). Many Vanguard ETFs have Vanguard open end funds that are essentially the same. Check the fund alternate list for ideas, but this strategy is best done with ETFs and similar index funds. Today there are several ETFs that do the same thing in many categories – thank you mutual fund industrial complex for overproducing… For more on mutual funds and taxes, <a href="http://maxadvisor.com/newsletter/farchives/000659.php">click here</a>.
In November Harbor Bond (HABDX) wasn’t quite so impressive compared to the overall bond market. The fund was up 1.34% compared to the 3.26% market return. Anybody light on US government bonds relative to the market index would have underperformed last month.
Nakoma Absolute Return (NARFX) didn’t have as good a month at it did in October but the essentially flat return was way better than the market.
Bridgeway Balanced BRBPX was a little disappointing with a 4.73% drop. Market volatility has made option writing problematic.
Healthcare continues to offer a little less downside than stocks. If this keeps up eventually healthcare stocks will get too expensive relative to the market.
Healthcare Select SPDR (XLV) was down 6.32% in October.
Janus Global Research (JARFX) continued to underperform with a 10.10% drop.
The Aggressive Portfolio fell -4.36% in November.
Compared to October, November was a gangbuster month for stocks. The S&P fell only 7.18%, the Nasdaq and Russell 2000 dropped by double-digits, and the Dow posted a 4.86% loss. Government bonds were the only true winner. The Lehman Brothers US Government Long Bond Index gained a blistering 11.78% as interest rates on government bonds plunged to record lows caused by investors panic buying the safest investment around. Too bad Lehman didn’t own more government bonds - they might still be in business. What did Lehman load up on near the end? Commercial real estate – REITs were about the worst performing area last month with a roughly 25% drop.
While none of our portfolios performed as poorly as the S&P 500, our ’downward participation’ is climbing due to our increased stakes in stocks. Over the last 12 months however, our worst performing portfolio did a full 10 percentage points better than the S&P 500.
Frankly, we should be doing better in our higher risk accounts even with the larger stock stakes. We’ve been shorting the hardest hit areas in the market – real estate and emerging markets. In fact we’ve been shorting real estate since the top of the real estate bubble in our Daredevil portfolio. Unfortunately the few fund options around to put such timely calls to work deliver little long term gains– these ETFs are more useful as trading vehicles that offer protection from short, sharp drops.
The good news is our just-published annual year end <a href="http://maxadvisor.com/newsletter/reports/MAX.2008.distribution.report.pdf">capital gains report</a> has no fund taxable distributions worth taking great pains to avoid (Bridgeway Balanced BRBPX being the most noteworthy). Those adding new money should wait until the record dates pass nonetheless – there is no use drawing a taxable distribution that can be avoided by waiting a few days. Much of the good tax news is because the market is down, but we have also gotten out of hotter funds that could be realizing gains after forced sales by other performance chasing investors. Moving into out-of-favor funds and categories tends to be pretty tax efficient (in addition to being performance-enhancing).
On the tax issue, this is a good time to realize some losses if you have some gains from previous sales this year. Some of the Powerfunds are probably down since you bought them and some are replaceable with similar funds. Buy one as you realize the loss in another fund (watch out for tax rules buying the same exact fund back shortly after selling it). Many Vanguard ETFs have Vanguard open end funds that are essentially the same. Check the fund alternate list for ideas, but this strategy is best done with ETFs and similar index funds. Today there are several ETFs that do the same thing in many categories – thank you mutual fund industrial complex for overproducing… For more on mutual funds and taxes, <a href="http://maxadvisor.com/newsletter/farchives/000659.php">click here</a>.
Nakoma Absolute Return (NARFX) didn’t have as good a month at it did in October but the essentially flat return was way better than the market.
The precipitous drop in Japanese stocks abated. Vanguard Pacific Stock ETF (VPL) fell ‘just’ 4.56% in November.
Healthcare continues to offer a little less downside than stocks. If this keeps up eventually healthcare stocks will get too expensive relative to the market.
Healthcare Select SPDR (XLV) was down 6.32% in October.
In November Harbor Bond (HABDX) wasn’t quite so impressive compared to the overall bond market. The fund was up 1.34% compared to the 3.26% market return. Anybody light on US government bonds relative to the market index would have underperformed last month.
Janus Global Research (JARFX) continued to underperform with a 10.10% drop.
New User? CLICK HERE!
The Conservative Portfolio fell -3.08% in November.
Compared to October, November was a gangbuster month for stocks. The S&P fell only 7.18%, the Nasdaq and Russell 2000 dropped by double-digits, and the Dow posted a 4.86% loss. Government bonds were the only true winner. The Lehman Brothers US Government Long Bond Index gained a blistering 11.78% as interest rates on government bonds plunged to record lows caused by investors panic buying the safest investment around. Too bad Lehman didn’t own more government bonds - they might still be in business. What did Lehman load up on near the end? Commercial real estate – REITs were about the worst performing area last month with a roughly 25% drop.
While none of our portfolios performed as poorly as the S&P 500, our ’downward participation’ is climbing due to our increased stakes in stocks. Over the last 12 months however, our worst performing portfolio did a full 10 percentage points better than the S&P 500.
Frankly, we should be doing better in our higher risk accounts even with the larger stock stakes. We’ve been shorting the hardest hit areas in the market – real estate and emerging markets. In fact we’ve been shorting real estate since the top of the real estate bubble in our Daredevil portfolio. Unfortunately the few fund options around to put such timely calls to work deliver little long term gains– these ETFs are more useful as trading vehicles that offer protection from short, sharp drops.
The good news is our just-published annual year end <a href="http://maxadvisor.com/newsletter/reports/MAX.2008.distribution.report.pdf">capital gains report</a> has no fund taxable distributions worth taking great pains to avoid (Bridgeway Balanced BRBPX being the most noteworthy). Those adding new money should wait until the record dates pass nonetheless – there is no use drawing a taxable distribution that can be avoided by waiting a few days. Much of the good tax news is because the market is down, but we have also gotten out of hotter funds that could be realizing gains after forced sales by other performance chasing investors. Moving into out-of-favor funds and categories tends to be pretty tax efficient (in addition to being performance-enhancing).
On the tax issue, this is a good time to realize some losses if you have some gains from previous sales this year. Some of the Powerfunds are probably down since you bought them and some are replaceable with similar funds. Buy one as you realize the loss in another fund (watch out for tax rules buying the same exact fund back shortly after selling it). Many Vanguard ETFs have Vanguard open end funds that are essentially the same. Check the fund alternate list for ideas, but this strategy is best done with ETFs and similar index funds. Today there are several ETFs that do the same thing in many categories – thank you mutual fund industrial complex for overproducing… For more on mutual funds and taxes, <a href="http://maxadvisor.com/newsletter/farchives/000659.php">click here</a>.
In November Harbor Bond (HABDX) wasn’t quite so impressive compared to the overall bond market. The fund was up 1.34% compared to the 3.26% market return. Anybody light on US government bonds relative to the market index would have underperformed last month.
Nakoma Absolute Return (NARFX) didn’t have as good a month at it did in October but the essentially flat return was way better than the market.
Bridgeway Balanced BRBPX was a little disappointing with a 4.73% drop. Market volatility has made option writing problematic.
Healthcare continues to offer a little less downside than stocks. If this keeps up eventually healthcare stocks will get too expensive relative to the market.
Healthcare Select SPDR (XLV) was down 6.32% in October.
Janus Global Research (JARFX) continued to underperform with a 10.10% drop.
The Aggressive Portfolio fell -4.36% in November.
Compared to October, November was a gangbuster month for stocks. The S&P fell only 7.18%, the Nasdaq and Russell 2000 dropped by double-digits, and the Dow posted a 4.86% loss. Government bonds were the only true winner. The Lehman Brothers US Government Long Bond Index gained a blistering 11.78% as interest rates on government bonds plunged to record lows caused by investors panic buying the safest investment around. Too bad Lehman didn’t own more government bonds - they might still be in business. What did Lehman load up on near the end? Commercial real estate – REITs were about the worst performing area last month with a roughly 25% drop.
While none of our portfolios performed as poorly as the S&P 500, our ’downward participation’ is climbing due to our increased stakes in stocks. Over the last 12 months however, our worst performing portfolio did a full 10 percentage points better than the S&P 500.
Frankly, we should be doing better in our higher risk accounts even with the larger stock stakes. We’ve been shorting the hardest hit areas in the market – real estate and emerging markets. In fact we’ve been shorting real estate since the top of the real estate bubble in our Daredevil portfolio. Unfortunately the few fund options around to put such timely calls to work deliver little long term gains– these ETFs are more useful as trading vehicles that offer protection from short, sharp drops.
The good news is our just-published annual year end <a href="http://maxadvisor.com/newsletter/reports/MAX.2008.distribution.report.pdf">capital gains report</a> has no fund taxable distributions worth taking great pains to avoid (Bridgeway Balanced BRBPX being the most noteworthy). Those adding new money should wait until the record dates pass nonetheless – there is no use drawing a taxable distribution that can be avoided by waiting a few days. Much of the good tax news is because the market is down, but we have also gotten out of hotter funds that could be realizing gains after forced sales by other performance chasing investors. Moving into out-of-favor funds and categories tends to be pretty tax efficient (in addition to being performance-enhancing).
On the tax issue, this is a good time to realize some losses if you have some gains from previous sales this year. Some of the Powerfunds are probably down since you bought them and some are replaceable with similar funds. Buy one as you realize the loss in another fund (watch out for tax rules buying the same exact fund back shortly after selling it). Many Vanguard ETFs have Vanguard open end funds that are essentially the same. Check the fund alternate list for ideas, but this strategy is best done with ETFs and similar index funds. Today there are several ETFs that do the same thing in many categories – thank you mutual fund industrial complex for overproducing… For more on mutual funds and taxes, <a href="http://maxadvisor.com/newsletter/farchives/000659.php">click here</a>.
Nakoma Absolute Return (NARFX) didn’t have as good a month at it did in October but the essentially flat return was way better than the market.
The precipitous drop in Japanese stocks abated. Vanguard Pacific Stock ETF (VPL) fell ‘just’ 4.56% in November.
Healthcare continues to offer a little less downside than stocks. If this keeps up eventually healthcare stocks will get too expensive relative to the market.
Healthcare Select SPDR (XLV) was down 6.32% in October.
In November Harbor Bond (HABDX) wasn’t quite so impressive compared to the overall bond market. The fund was up 1.34% compared to the 3.26% market return. Anybody light on US government bonds relative to the market index would have underperformed last month.
Janus Global Research (JARFX) continued to underperform with a 10.10% drop.