I understand your points well. But look, 1) These are semi-passive funds. They are meant to generate income, not returns. 2) The fees are minimal. The first year it is something like 1% of assets. After that, there is ZERO cost!
Have you taken dividends etc into account when you did the computation? Which fund? The core bond fund or the "stock" fund? I agree, but remember, we should not compare total returns, but outsized returns over risk taken. In other words, compare the return to the SP500, and compare the risks (variance, peak to trow, etc) to the SP500. Those two taken together is more indicative of what one want, imo.
Nitro, what do you think about this? This man have a managed fund "southland investments" Is not the broker, but advisor. It is the trend tracking of mutual funds (no load) and is through Charles Schwab. So he will not hold, but sells when in the bear market and puts all the money in the money market and wait for the uptrend to go back in the market. How can I know it is real? This is for my grandfather, and for me. I would like to hear your opinion if you have that time. Thank you. http://www.successful-investment.com/money_management.htm
Oops, I forgot to post last month's result. + 1.5%. However, he is getting killed this month in the core bond fund, alleviated a little bit by short TLT trades that I added.
trendlover, I don't know anything about them. What I have done with my dad is the following. For your grandfather, invest in the JPM core bond fund 80% of assets, and stock fund at 20% of assets. The twist that I added is this: the stock fund probably leave alone. But in a rising interest rate environment, short some TLT against the core bond fund. This way you are better hedged than in a passive fund that doesn't make bets like this. You must choose extremely safe bets for your grandfather, and even shorting TLT to hedge IRs is very risky, so be very careful. Just being in a very safe fund like the JPM funds in this thread is ok. Remember, for old people, they are not so interested in the return on their money, as the return of their money. For you, I could just do a core bond fund, and I would choose the stocks yourself. Look in the Investment Catechism thread for Buffets portfolio and choose five decent dividend paying stocks. As you get more sophisticated, you could also move the bond fund into your own hands, or maybe use TLT to trade around your core bond fund the way I do for my dad, but again, this is very risky if you don't know what you are doing. This is only my opinion.
---------------------------------------------------------------------------------- Thank you for your opinion nitro! This link I show you is for the mangaged fund. To pay for someone to trade and watch. I am not confident to do this trade yet. No time. For my grandfather it is to go low risk to keep his money. For me it is for to grow. Ok, I will read your post again and think about that. Good night!
The average lifetime of the core bond fund is about 4 years. Hence, http://finance.yahoo.com/q?s=biv is a better hedge than TLT. Slightly shorter term than BIV is even more accurate hedge, as the duration of the OBOCX is about 3.1 years.
These are class C shares, so there's a 1% fee tacked onto these funds which goes straight into the "advisors" pocket. If you plan on holding long term, you could buy the same funds in a self-directed brokerage account for 1% less, per year.
Agreed, although there is no penalty or any other fees to move within any of their funds once you pay that 1%, FOREVER, and they have quite a few of them that allow you to target nearly any investment environment you can imagine. I have advised my dad that he should start thinking about moving into a shorter JPM duration bond fund, or alternatively, to move to a more balanced fund that has more equity and less bond exposure.