Skip to main content

Investments 2012

As you might have noticed, I left a mutual fund ticker as a teaser at the end of my one of my earlier posts: DFSAX. This ticker is a mutual fund that is managed in part by Andrew Lo, a renowned MIT professor which is designed as a multi-strategy mutual fund.

Multi-strategy funds exist as a mechanism to reduce the overall risk in the market by hedging. Hedging/Multi-Strategy funds allow more freedom within the fund to choose different investments. According to Google, these are the top 10 holdings of the fund as of 1/22/2012:

Top 10 holdings
Security Net Assets
German Euro Schatz Futures Dec11 Xeur 8.25%
10yr Japan Govt Bond Ftrs Tse Dec11 Xtks 7.50%
3yr Australian Tbond Futures Dec11 Xsfe 4.22%
10yr Us Treasury Note Futures Mar12 Xcbt 3.41%
German Euro Bund Futures Dec11 Xeur 2.81%
Uk Long Gilt Bond Futures Mar12 Xlif 2.76%
German Euro Bobl Futures Dec11 Xeur 2.28%
Msci Taiwan Index Futures Dec11 Xses 1.10%
10yr Govt Of Canada Bond Ftrs Mar12 Xmon 1.04%
Asg Diversifying Strategies Ca Capstock Shares 0.97%

Without knowing very much about any of these, you can see that these are largely futures and that there is very little direct ownership in equities. This makes a lot of sense because this fund was offered as an alternative investment on the WealthTrack show on 1/22/2012. The idea here is that while you'd continue to strongly weight your portfolio within stocks and bonds, you'd provide a small weight to one or more alternative investments which are negatively correlated with the market.

If the market goes down, this investment goes up. While I've been investigating these investments for a long time, I certainly had not heard of this one before. Prior to this show, I had been looking at some small allocation into Gold or Energy focused funds.

I am pleased with my research so far on this name, because the initial investment is low at 3000 dollars USD, which is within my price-range. However, the A-shares, which is what I would purchase, come at a hefty 5.75% front-end load. While most shares have a load, many firms like vanguard offer no-load mutual funds. This means that I would lose 172.50 right off the top with my 3000 investment, bringing me to 2827.50. Then the remaining money would have to climb about 6.1% before I began making anything. This seems a bit excessive for me, so I probably will wait on this.
Labels:

Comments

Post a Comment

Popular posts from this blog

On Buying a Lifestyle...with a Fixed-Rate Mortgage

Despite all of the back and forth about sub-prime mortgages and the housing bubble, I am feeling just fine. The reason is that when purchasing, I followed some old advice: Don't expect to flip. In general, I've been told by many people that you shouldn't buy a home unless you plan to hold on to it for 7 years or longer. If the market does well and you decide to sell, fine. But if you want to be sure not to lose money, don't buy something that you only want for a year or two. I've been in my current location for more than 3 years. I like it. And I have no intention of leaving in the short or medium term. It seems to me, that real estate, like any asset class, has its ups and downs. But as a practical point, I don't look at my home as an asset per se. Rather, I consider it to be a fixed expense that I need to survive, much like food and water. Therefore, as long as the payment is reasonable and it functions to keep me warm and sheltered and comfortable, that is a...
Post a Comment
Read more

Do Better With Your Time

Recently, I've been extremely busy with some work commitments. The interesting thing for me is that this increased work activity has really helped crystallize some of my feelings with regard to time. And these ideas are a critical part about my view on personal finance. I'm curious to know if others feel similarly. Time is money. That is, Time, in some way, contains energy. Money, is also energy. In the act of working, I am able to compound and increase the amount of money that I have. I am exchanging my time and effort and thought which are components of my work, for the productivity that I produce. And this production gets me money from my employer. However, the first dollars that I make each day, week, or month are the most valuable. Then the ones that I make at the end are the most valuable. (Forget about taxes for a minute.) The reason is, the first ones help me have a place to live and food to eat. And the last ones are the ones that I can use to really improve my life lo...
3 comments
Read more

Blogging WealthTrack: Christine Benz (Retire Early? Or not?)

 This morning I've watched an interesting video on Consuelo Mack: WealthTrack. Here, Consuelo's guest, a longtime contributor, Christine Benz, a personal finance expert from Morningstar joined Consuelo for a discussion on issues related to retirement, in particular in the current market environments. This conversation is even more interesting against the backdrop of The Great Resignation. I found Christine's advice to be particularly interesting on a couple of fronts. Her advice in dealing with talking about retirement in general, in particular for people who are in the process of thinking about retiring early gave me pause. She is considering the traditional advice of a 4 percent withdrawal rate to be dangerous and indeed, actually concerning. According to the recent research she cites, a 3% withdrawal rate is a better option. Even more than the four percent rule, I think that her comments on annuities are particularly interesting. While annuities have been given a bad nam...
Post a Comment
Read more