Fund of the Week BTTRX American Century Target 2020

Bonds gained, Real Estate lost.

Of the funds I track, BTTRX American Century Target 2020 had the best week last week.

Real Estate suffered with VGSIX Vanguard REIT Index down the most.


Portfolio Update 8/14/09: Never Going Back Again

A slight retreat last week, but to the bottom we hit in March... we're Never Going Back Again.

At least I hope not.
Real Estate retreated so My IRAs took the biggest hit.

WylieMoney Slowly

WylieMoney 20 Mostly Managed

Lazy 20 Mostly Index

ETF 20

Three Fund Index

S&P 500


Fund of the Week: VNQ Vanguard REIT Index ETF

VNQ Vanguard REIT Index ETF took a break from summer vacation last week to rack up a gain of 16.80%. That's a nice week's work. Of course it had been slacking and is still sitting on a big loss since I hypothetically invested in it.

Real Estate rocked across the board. Mid Cap funds and Financial companies also did well last week.

Bonds suffered with BTTRX American Century Target 2020 losing 5.07%.

Health care companies also struggled. Protesters across the country rallied hard to keep the government from being invloved in health care, arguing that it is far better to have private companies with profit as the primary motivator managing health care and deciding what will and will not be covered by insurance companies.

Nice job fellas.

I wonder if the loss in health care company stocks indicates that investors think the protests will be ignored...


Portfolio Update 8/7/09: The Boys of Summer

The boys (and girls) of summer are buying.

After another week of solid gains and none of the portfolios I started tracking on 5/1/07 are down over 30%. The WylieMoney Slowly Portfolio which I built over 20 months starting on 5/1/07 is down 14.81%. My IRA which is a bit Real Estate heavy and the S&P 500 both lag behind the other portfolios, but Real Estate had a tremendous week so my IRA made up some ground.

WylieMoney Slowly

WylieMoney 20 Mostly Managed

Lazy 20 Mostly Index
ETF 20

Three Fund Index

S&P 500


Replacing the Real Estate Fund in My Taxable Account

There is some debate about whether it is a good idea to own Real Estate fund in a taxable account. The dividends are taxed at your income rate rather than the sometimes lower 15% capital gains tax rate. Of course if you have huge tax losses from selling funds at big losses, is this a factor?

I like holding a small percentage of my investments in real estate to add diversity. A lot of employer sponsored retirement plans don't offer real estate options so in addition to an IRA, adding a REIT to a taxable account may be the only other option for some seeking to diversify.

I currently own REACX and due to the implosion of the US economy and the hit to real estate in particular am sitting on a loss of over 50% in this fund. I dont want to get out of the category now. This fund is up over 30% in the last three months. Bt I do want to write off the tax loss and secure any potential gains in a better fund, if I can find one.

Going by Morningstar ratings, selling REACX is a no brainer. With a brand new manager, there is no history to go on either. And it looks like I have some solid no load no fee options available via Etrade.

1 year and 5 year performance backs up the decision.

STMDX Stratton Monthly Dividend REIT is the only other fund with expenses close to 1%. It also has the lowest turnover which is a big plus for a taxable account. The negative is that is is designed to generate income so the dividends will be higher.

With the lowest expenses, lowest turnover, best one and 3 year returns, STMDX Stratton Monthly Dividend REIT looks like a decent replacement for REACX American Century Real Estate.


Year to Date Comparison- Funds I Sold and Bought in December

As I gear up to look at replacing a few funds to write of the losses against my taxes, I should look at the returns of the funds I sold and bought last time I did this.

Seven months is a very short period of time to compare mutual funds, but I still think it is worth it is worth sharing the actual performance impact of my decisions.

Here are the changes I made:

And here are the performances of each fund in the first 7 months of 2009. The Red fund is the fund I bought with the blue fund indicating the one I sold.

MGFIX had been slammed, waaaayyy underperforming its peers. Well it is significantly outperforming them on the rebound. The fund I bought has turned a nice profit for an intermediate term bond fund, up 7.41%, but the one I sold has gained 16.33% so far.

Emerging Markets have roared to life in 2009. Both funds are up about 45% year to date. The new fund I bought has a very slight lead, but the difference is insignificant.

Large CAp Value has had a nice rebound and the fund I sold is up almost 1% more than the fund I bought, but you can see that it sunk much farther back in March. If this category continues to do well, my old fund could outperform, but I bet if tings turn south AMANX will hold up a little better.

The small cap value fund I bought has done much better than the one I sold. RSEFX is up over 15% while JASCX is only up 7.62%.

So performance wise, one change was a loss, one a gain and two were negligible. All in all, I am up about what I would have been had I stayed put, but I saved thousands of dollars in taxes by selling the fuds at a loss, so all told, I came out way ahead.


Selling funds at a loss in a taxable account

At the end of last year, I wrote a post about selling funds at a loss and replacing them with other funds in the same fund categories to write off the loss against my taxes.

In that post I noted that there was plenty time to wait to do this if you were going to get socked with a fee for holding the fund for less than 3 months.

Specifically I asked:

"You think the markets will rally 40% in the next 3 months?"

In the last 5 months, one fund I own is up over 70%.

It is still down over 12% since I purchased it, but at this rate, it might not be for long. While solid gains are good, it is possible most of the losses I see in my brokerage right now won't be around much longer.

So if I want to ensure that I have loses to offset my tax burden this year, I need to sell some funds. Of course, the markets could tank again, but I will not be any more or less invested after doing this so my risk will remain the same. If markets tank, I'll be able to sell the new funds at a loss down the road and off set more taxes.

I like the categories I am invested in, so I will only sell a fund when it is at a loss and I can find a fund in the same category, that I like as much or more.

It must have equal or lower fees and fund turnover, must have solid long term performance relative to its peers, and must be a no load, no fee fund available through Etrade.

I'll go through one fund at a time and see what I can find in the next few days.


Fund of the Week: BTTRX American Century Target Maturity 2020

Real Estate, Financial Services, Small Value all had a decent week last week, but BTTRX American Century Target Maturity 2020 had the best week, up 4.70%.

Growth funds did not fare as well, but Natural Resource funds had the least productive week with PRNEX T. Rowe Price New Era trailing the funds in my experiment, losing 0.93%.


Portfolio Update 7/31/09: All is Full of Love

Another week of gains in all the portfolios. Apparently, All is Full of Love.

The WylieMoney Slowly Portfolio is up year to date more than it is down since I started tracking it. If the second half of the year looks like the first half, I'll have a broadly diversified buy and hold portfolio of mutual funds, invested starting in 2007, that will actually show a slight profit.

Diversity is proving to be the key, however. Adding international funds, bonds and even real estate, has turned out to be a much better strategy than simply investing in the S&P 500.

WylieMoney Slowly

WylieMoney 20 Mostly Managed

Lazy 20 Mostly Index

ETF 20

Three Fund Index

S&P 500