From Morningstar:



Fund of the Week: DJP iPath Dow Jones-AIG Commodity

Out of all the funds I track, if you trust the data I use, DJP iPath Dow Jones-AIG Commodity closed the week up 0.72%. The other 9 funds in the top 10 are bond funds and only three of them turned a (very small) gain.

The losers lost big: -6.50% to over -8% down for the week. Growth, Value, Small, Mid and Large Caps, Emerging Markets, Financial Services, the bottom ten funds were well diversified.


Portfolio Update 9/26/08: Down in the Hole

This week the markets and my portfolio experiment are down in the hole.

For those of you who have not clicked the link at the beginning of my portfolio updates for the last few months, you may not realize that each week begins with a song. So this week I include a video to go along with the song, for your audio/video pleasure.

Well the big news this week for my experiment is that Morningstar corrected a significant amount of bad data on their website, resulting in the ETF portfolio leaping from 7th place to 4th.

Even correcting the ETF portfolios performance since May 1st, 2007, it lost value this week, along with all the other portfolios.

It looks like a deal to use our tax dollars to bail out our fine financial institutions is close to being signed so we shall see how investors react next week.

WylieMoney 20 Mostly Managed

WylieMoney Slowly

ETF 20 Index Portfolio

Lazy 20 Mostly Index

Three Fund Index

S&P 500

Morningstar Tries to Clean up Years of Bad Data

This weekend, I sat down to compile the performance of the mutual fund portfolios in my experiment and can't believe what happened.

I use Morningstar to track my portfolios. Morningstar provides data for some 125,000 investment offerings. If you have ever researched a mutual fund, you have seen the fund company tout its Morningstar rating.

Morningstar is currently updating its website. I mentioned this recently as their changes have made it more difficult for me to update my charts. Many of the changes look pretty nice, some I could give or take. Whatever, life is change.

But this weekend was different. The first thing I do each week is log into my portfolios and update each for any dividend or capital gains distributions. For the purpose of this experiment, I reinvest all distributions and have since May 1st, 2007. Usually I have to remember to click an option in one of the menus, but this weekend, I was prompted:

New actions, I expect and every now and then there is an update- an incorrect distribution for example. Fine, no one is perfect.

Well this weekend I was greated with massive corrections going all the way back to the begining of my experiment. Here is an example of just one ETF:

I'm not sure how pervasive the bad information was- was it on the front end of Morningstar's site? Was it included in how Morningstar calculated its fund star rankings? Was it included in the information that fund companies have been using to tout their fund's performances in advertisements?

You might think even years worth of inaccuracies are not THAT big a deal if you are talking about fractions of a cent.

Well, when I post the weekly update, you'll see that mis-recorded split on one ETF was so significant it led one portfolio to jump from 7th place to 4th in my competion.

This is not the first time I've pointed out that Morningstar's data does not seem right to me.

And maybe it is not right now, who knows... Bottom line is Morningstar provides lots of great data, articles and tools. Their portfolio tool is a great resource and I'm glad they provide it for free.

But wow- what gives with not getting the numbers right?

If they're on track now, then kudos for setting things right, but unless my 8 portfolios with almost 100 funds tracked are somehow the only portfolios where this bad data showed up, I'm surprised there is not more communication about these corrections...

The only indication I see that anything has changed is a little blue 'new' next to the renamed place I need to click to update my portfolios.

If you too track your portfolios in Morningstar, after you update your changes when prompted, go click Dividend/Splits to update your portfolio again. For several of my portfolios, I had to update twice to bring things up to date with the data Morningstar is using now.


Presidential Debate Round One and Your Investments

Which President will be better for your investments?

After much research (1, 2, 3, 4, 5, 6), I have determined it depends on your goal.

Since the WylieMoney Portfolio of hypothetical investments has performed much better than its competition as markets have been collapsing, I'm gonna say, go with McCain. I'm not sure if the portfolio of funds I selected will outperform index fund portfolios if the economy turns around so to ensure that my portfolio continues to beat its peers, making me the smartest blogger blogging about mutual fund portfolios, I'm gonna root for continued failure.

"The Sheriff" might disagree with my strategy (or is this a tactic?).


Adding MGFIX today

Today is the day that I am adding MGFIX Manager's Bond (my post) to the WylieMoney Slowly Portfolio. Not sure if Bonds will be down today, but am adding it anyway. I'm kinda late this month.


Next WylieMoney Slowly Fund: MGFIX Managers Bond

The next fund Category I plan to add to the WylieMoney slowly portfolio is an intermediate term bond fund.

When I first picked a fund from this category, the best option that met the criteria for my experiment was MGFIX Managers Bond My Post.

I'm gonna stick with MGFIX. There are a few bond funds that have posted better results this year, but Managers has a very solid long term performance, and the others have not been as consistent.

These days, bonds aren't necessarily going up when equities fall and vice versa. Regardless, on the next day the equity markets go up, I'll add MGFIX to the WylieMoney Slowly portfolio.

This will be the 17th of 20 funds I will add to the hypothetical portfolio so we will soon see if adding a $2500 to a fund a month turns out to have been a better strategy than investing all $50,000 back on May 1st 2007.

Did that sentence have a tense? Hmmm.

Fund of the Week: DVY iShares Dow Jones Select Dividend Index

iShares Dow Jones Select Dividend Index posted a one week gain of 9.10%. Since hundreds of billions of our tax dollars are going to bail out many of the companies held by this fund, it stands to reason that investors want a piece of the action. Investors' tax burden has shrunk profoundly with Capital gains tax changes over recent years, taking tax money paid by everyone and redistributing it to investors through bailouts is just gravy.

Small caps and real estate also posted solid gains. Real Estate has seen a slow but steady rise as our tax dollars have also gone toward bailing out home owners who bought more house than they could afford. Not sure why small caps are up.

The big losers this week were emerging and foreign markets and bonds. Vanguard Emerging Markets Stock ETF VWO lost 8.08%. I guess investors feel that countries that do not have the will or the means to bail out companies that do stupid things aren't as tempting these days.

It is worth noting that VWO lost 8.08% while the Emerging Market fund I picked SSEMX (and actually own) only lost 0.35%. It is odd, that the Vanguard Mutual Fund only lost 0.77%.

The big emerging markets news last week was the collapse of the Russia's Mafia, I mean Market.

Maybe the Vanguard ETF office did not get the memo that the Vanguard mutual fund office got about selling Russian positions as commodities fell over the last few weeks...


Short Selling Halted as Market Tumbles, Will Buying be Halted if Markets Surge?

Last week the government decided that investors who think that a companies stinks, can't invest on that notion by short selling stocks if that stock belongs to one of the companies that has recently made really really dumb business decisions (finance companies).

I don't pretend to understand the ins and out of why our politicians think that's fair, but changing the rules in the middle of the game, does not strike me as fair.

So investors can short stocks, investing on the notion that a company is overvalued, unless that company makes really, really, dumb business decisions. In that case, our government will step in and protect the companies.

When investors bought stocks like mad during the late 90's that ultimately led to crappy market conditions, as the market corrected, but no one stopped investors from buying. Of course, that would have protected investors, not companies...

Actually the government did not block everyone from shorting stocks, only you and me. If you are a "market maker" whatever that means, you can short financial companies to your heart's content.

If you are a fund manager, keep on shorting.

That's fair.

For an interesting take on how this decision impacts inverse ETFs like SKF UltraShort Financials ProShares that don't actually short stocks, check out this article.

Portfolio Update 9/19/08: Think About It

The week ending 9/19/08 was so full of crazy swings in the stock market, you might not know what to think about it.

In the end, stocks (US stocks anyway) end the week essentially flat. Well, according to Morningstar, SPY, tracking the S&P 500, actually lost 1.56%, but the portfolios of mutual funds I track in my experiment all posted modest gains.

My brokerage has actually held up well comparatively, gaining ground over the last few weeks on the competition, now trailing only the WylieMoney 20 portfolio

Since I last posted, all the portfolios lost ground.

WylieMoney 20 Mostly Managed

WylieMoney Slowly

Lazy 20 Mostly Index

Three Fund Index
ETF 20

S&P 500

Sorry, I Got Distracted

It has been almost a month since my last post. I went on vacation, I came back to a busy time at work, had company, got sick, etc.

None of these are good reasons to go so long without posting. Especially when the topic of my blog has had one of the more interesting months in a long time.

So no excuses, just an apology... sorry.

Weekly updates, next WylieMoney Slowly fund, thoughts and ideas coming soon.