Fund of the Week: BTTRX

American Century, the best and worst...

BTTRX American Century Target Maturity 2025 outperformed all other funds I track, gaining 5.79% on the week. The other top 10 funds were all bond funds.

The biggest loser for the week was REACX American Century Real Estate Inv, down -19.34%. It was the collapse of Real Estate and Emerging Markets last week that knocked my portfolios down in my experiment. The bottom 10 funds fall in these two categories plus two Mid Cap Growth and two Foreign Funds.


Portfolio Update 10/24/08: History Repeats Itself

In the markets and in my fund portfolios, his week looks like last week and this year looks like other really bad years. History repeats itself.

Yea, that's a bizarre video. Love that song though...

Many will claim that the details are different this time, but there was enough repeating for the experts to see this coming.

This Week, the WylieMoney Slowly Portfolio was surpassed by the Three Fund Index and is now tied with the Lazy 20 Portfolio.

My brokerage and IRA accounts sit soundly at the bottom of the mix. They are not made of the same categories as the other portfolios, so it is not unexpected that they would not track the performance of the others, but it is still disappointing to see them lag. All the diversified portfolios are still beating the S&P 500 Index since May 1st, 2007, but not by much (not for long???).

WylieMoney Slowly

ETF 20

Three Fund Portfolio

Lazy 20 Mostly Index

WylieMoney Slowly

S&P 500


This "Crisis" was no Surprise

Just in case you thought no one saw this coming...

This video is from Tuesday, 8/28/06.

Note the Dow at 11352 and the S&P 500 at 1301. Dow is now at 8353 and S&P 500 is at 869.

Peter Schiff had it right, at least until the end of the video when he rambles a bit making claims based on gender stereotypes... His opponent, Art Laffer provides great cominc relief if you are able to laugh about all this.

Thanks Dave for forwarding the clip!


What I'm Doing as an Investor During the Financial Crisis

As the economy has turned south, I've been asked if I think it is a good time to cut back on retirement plan contributions. A friend recently moved all his retirement account investments into bonds. Investors pulled out of mutual funds in September in greater numbers than in any time in the history of the mutual fund industry. What is an investor to do?

I have a long time horizon until retirement, and I can leave my taxable investments in the market for a while. So I am following Warren Buffet's lead and am buying.

I'm doing four things.

1) I'm re-balancing my retirement account to be 100% Equities and increasing my small cap growth and large cap value investments.

I was already 90% invested in equities so this is not a huge change. I moved out of bond funds, which have certainly cushioned the decline in my retirement account. And I'm moving funds from an S&P 500 index fund into Dodge and Cox, a Large Cap Value managed fund. I have many years to go before I retire so even if markets decline further, I think being 100% in equities after 30-40% declines year to date, is a good plan for the long term.

2) I'm increasing my contribution to my employer based retirement plan (see above) from 13% of my salary to 16%. This is also not a huge change, but the more money I can invest while the markets are down significantly, the better.

3) I'm going through my taxable account, and looking for funds that I can sell at a significant loss. I will immediately reinvest in another fund in the same category, as I feel good about the asset allocation in my taxable account. But by selling at a loss and reinvesting, I maintain the same exposure to equities, I have a chance to replace funds that are not performing in line with peers in their categories, and I get to offset the loss against my income come tax day! I'll write a post with details about this soon.

4) I'm looking for cash to invest. Since I'm increasing my retirement contributions, my pay check will decline slightly. I have an emergency fund and though I already live comfortably below my means, there are ways I can cut back and save even more. So I'm looking to see if I can find cash to invest without depleting my emergency fund. More about this soon as well!


Fund of the Week: JAGLX Janus Global Life Sciences

Perhaps because of all the financial crisis induced stress related illness spreading across the globe, the Health Care sector, anticipating big sales in drugs and medical devices, had a strong week (yes, I just make this stuff up). JAGLX Janus Global Life Sciences had the best week of the funds I track up 6.13% for the week.

Real Estate got crushed with all 4 real estate funds I track posting -9 to -12% losses. REACX American Century Real Estate was the biggest loser.


Portfolio Update 10/17/08: Should I Stay or Should I Go

Should I stay or should I go? (I'm Staying...)

After massive losses, the portfolios in my experiment took a breather this week.

The S&P 500 pulled off a nice gain, but the more diversified portfolios were flat or posting losses. Real estate funds in particular took a big hit this week.

The ETF 20 continues to inch towards the head of the pack.

WylieMoney 20 Mostly Managed

ETF 20

WylieMoney Slowly

Lazy 20 Mostly Index

Three Fund Index

S&P 500


Fund of the Week: JASBX Janus Short Term Bond

Out of the 91 funds I track in the portfolios in my experiment, not one escaped the week without a loss. The fund that came closest to avoiding the bloodbath was JASBX Janus Short Term Bond Fund down only -0.31%. The other 9 funds in the top 10 were also bond funds, for the second week in a row.

The biggest loser was once again PNRZX Jennison Natural Resources. Its staggering loss of 26.5% for the week surpassed the astonishing loss of 20% last week. Not surprisingly, this fund is down more than any other fund I track for the year as well with a 55% loss. So how can this be a 5 star fund? It is worth noting that its 10 year annualied return remains over 20%.

Finance Funds, Emerging Markets and Value funds fill out the bottom 10.


Portfolio Update 10/10/08: It's The End Of The World As We Know It (And I Feel Fine)

Financially speaking, it's the end of the world as we know it (and I feel fine).

I added a new fund to the WyliMoney Slowly Portfolio on Monday. Since the portfolios have fallen so far, the WylieMoney Slowly Portfolio, a hypothetical portfolio to which I am adding a fund a month for 20 months, has crept in value into the range of the other portfolios in which I hypothetically invested in all 20 funds at once.

The Morningstar numbers on the ETF portfolio are simply wrong. Look below at the individual ETFs and you see many at 0% change for friday. Morningstar continues to make changes to its tool and it continues to be a mess. I can only assume that eventually the data will update properly.

The WylieMoney Portfolio of funds I selected is the only portfolio that is not down 30% or more, so far.

WylieMoney 20 Mostly Managed
WylieMoney Slowly
ETF 20

Lazy 20 Mostly Index
Three Fund Index
S&P 500


I'll be adding the next WylieMoney Fund RYVFX Today

Per this post, I'll be adding RYVFX Royce Value Svc.to the WylieMoney Slowly Portfolio today.

Fund of the Week: TLT iShares Lehman 20+ Year Treas Bond

TLT iShares Lehman 20+ Year Treas Bond was the best this week, up 3.07%. The other 9 funds in the top 10 were bond funds.

PNRZX Jennison Natural Resources Z lost over 20% last week. That's right, last week. Mid Cap Growth and Real Estate rounded out the bottom 10 with one Small Cap Bridgeway fund in the losers club as well.

Ignore VLACX, coming up at the bottom of Morningstar's portfolio view. Morningstar is having trouble with its website as it test new functionality. Here is the one week performance for this fund, on a different Morningstar page:

Let's hope that we don't see another week where -9.61% does not even land you in the bottom 10.


Next WylieMoney Slowly Fund: Small Cap Blend

When I first picked a Small Cap Blend fund, I picked DISSX Dreyfus Small Cap Stk Indx My Post. At this point, out of all the no-load, no fee small cap bend funds available through Etrade, DISSX has the worst 10 year return. It also has the worst 5 year return.

So I'm moving on. The best 5 and 3 year performances were posed by RYVFX Royce Value Svc. RYVFX has an average Expense Ratio, for the group. Morningstar actual has a lower expense ratio listed, but who knows if Morningstar's data is up to date.

Royce Value Svc. also has a middle of the road turnover ratio for small cap funds.

The one thing about this fund which is a concern for the experiment I am tracking is that it does not stay in the small cap blend category all the time.

From mid cap blend to small cap blend to mid cap growth and currently small cap blend, this fund gets around. Regardless, it is small cap blend now, I'm looking for the best small cap blend fund for my hypothetical portfolio, so the next day the markets take a dive, I'm adding $2500 in RYVFX Royce Value Svc. to the WylieMoney Slowly portflio.

Portfolio Update 10/03/08: The Show Must Go On

Well there have been some big swings up over the last few weeks, but make no mistake, the markets have tanked. Oh well, the show must go on.

If you think the market Year-To-Date totals are bad, check out from early May to last Friday for the portfolios in this competition.

Yet again, Morningstar continues to make changes to performance results from the last few years.

Updates like this one, have pushed the ETF 20 portfolio into second place:

What I find interesting is that have an investment portfolio including bonds and international equities has not really helped much in performance compared to just buying SPY, tracking the 500 largest US companies.

Also worth noting is the fall of My Brokerage from second place to sixth. Some of the loss may be due to Morningstar's corrections, but the main source of short term misery is my higher weight in Real Estate with a position in BXP Boston Properties and a few other holdings that don't match the hypothetical portfolios.

WylieMoney 20 Mostly Managed

ETF 20
WylieMoney Slowly
Lazy 20 Mostly Index
Three Fund Index
S&P 500


Why lowering everyone's mortgage to 5.25% a terrible proposal

The proposal to lower all mortgages to 30 year fixed mortgage at 5.25% ticks me off to no end. And if you make responsible decisions, waited for an affordable rate when buying your home, researched and refinanced at a rate close to this, are saving money for a down payment on your first home, or you paid points to get a rate at 5.25% it should tick you off too.

If you waited and bought or refinanced when rates actually hit 5.25%, then this proposal says your patience or the higher cost you paid for the home (home costs often go up as rates go down since the amount a buyer can pay is what it is), or points you paid or the effort you put into managing your mortgage was a complete waste.

And if you were responsible and could not afford a home, you are screwed because everyone will have a rate lower than you're ever likely to ever see meaning the value of homes won't be set by what the market (you) can afford but will be higher than that.

Alternatively, this article suggests that only those delinquent in their payments might get the new rate so perhaps now is the time to buy a new home at the highest rate, but cheapest closing costs you can find, and then don't make a single payment.

Why not make a fair proposal? If the goal is to lower mortgage rates so that fewer people default, why not lower everyone's rates the same amount, regardless of whether they have not fulfilled their contract or whether they were responsible, ripped off or just greedy.

If the average interest rate is say 7.25% then why not lower all rates by 2%. That way, people who got conned or were totally irresponsible with their money get assistance, but people who are on top of their business or paid points for their loan are not punished by essentially wiping out the advantage they earned through their patience, willingness to pay more up front, hard work, or responsible decision making. And responsible savers, who want to but a home, have a chance as the market will still turn over as those who really just can't afford what they took on, move on, and the market continues to adjust to what is reasonable.