March 1, 2024
Mutual Fund Observer
by David Snowball
20h ago
Dear friends, In like a lion, out like a lamb? The Total Stock Market Index has risen 12% in the past three months, as has the S&P 500. Nvidia stock is up 76% in the same period while semiconductor stocks inched up … 48%. The thermometer in Davenport today topped 76 degrees, just a bit warm for a late winter day. We heard that participants in the March 1st Polar Plunges at locations across the upper Midwest had to be treated for heat stroke. We live in interesting times. The one thing likeliest to help us through them is the support we offer one another, and our joint optimism that we can ..read more
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Overview of recent trends in the Options market
Mutual Fund Observer
by Devesh Shah
20h ago
Options – the hottest ticket in town In the 4th Quarter of 2023, for the first time, the daily volume of Options traded in the US eclipsed the daily volume of Futures traded. Options are now the #2 product behind Stocks by volume. There are two particular phenomena drawing our attention – Zero Day Options and Option Strategies embedded in Mutual Funds and ETFs. Some investors might want to get just a rudimentary understanding of Options and recent products, while others might want a deeper dive. I have written two columns. In this month’s column, we’ll take up three major topics: An introduct ..read more
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We breathe rarified air
Mutual Fund Observer
by David Snowball
20h ago
As we go to press, the S&P 500 is at its highest level in history: 5137. It set a record by passing 5000 for the first time on February 12, then another record high of 5100 two weeks later. In reality, of course, the S&P is not rocketing upward. The S&P 7-to-10 is, with the other 490-493 stocks as an afterthought. The top 10 stocks contributed 93% of the index’s 2023 gains. Goldman Sachs declares that the “S&P 500 index is more concentrated than it has ever been,” while Amundi, Europe’s largest asset manager and one of the world’s top six, claims it’s merely “at its highest lev ..read more
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Discipline or Disruption?
Mutual Fund Observer
by David Snowball
20h ago
There are two paths that investors can follow, and pretty much only two. Path One: Get Rich Slowly. This involves three steps. Invest in a risk-aware strategy. Fund it regularly. Get on with life. There will be ups and downs but, with time, you’ll win. Path Two: Get Poor Quickly. This involves three steps. Obsess about how rich other people are getting. Impulsively chuck money at a magic solution (crypto, meme stocks, SPACs, bleeding-edge tech, NFTs). Watch your anxiety spike as the money you couldn’t really afford to invest becomes the money you no longer have. The estimable Jason Zweig, fres ..read more
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Briefly Noted
Mutual Fund Observer
by TheShadow
20h ago
Updates Beware of big promises! Several articles have been written recently about BOXX ETF. Alpha Architect 1-3 Month Box ETF which tries to outperform an ultra-cheap vanilla ETF by using an option swap strategy. In theory, the game will allow investors to pay the long-term capital gain rate on their games rather than the ordinary income rate. Here’s the advisor’s description of their strategy: is an actively managed exchange-traded fund whose investment objective is to provide investment results that, before fees and expenses, equal or exceed the price and yield performance of an investment t ..read more
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February 2024
Mutual Fund Observer
by David Snowball
1M ago
Dear friends, February is a fraught month, historically. For Romans, it once did not exist. And then it did, as the last month of the year, with the new year beginning when the crops were first sewn and all eyes looked to the future. Februalia, the festival of purification, was the last chance to put the misdeeds of the past behind us and to be prepared to build a future upon a solid foundation. It’s also the month in which Augustana launches its Spring semester; as I ponder the snow piles on campus, I could imagine a more vernal moment for the start. In the Chinese lunisolar calendar, 2024 i ..read more
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No, The 60/40 Portfolio Is Not Dead
Mutual Fund Observer
by Charles Lynn Bolin
1M ago
The reported death of the 60/40 portfolio is premature. It did suffer some serious illness as the stock market fell and interest rates rose last year. I help family and friends work with Financial Advisors to set up managed portfolios of mutual funds and exchange traded funds at Edward Jones, Fidelity, and Vanguard. Jeff DeMaso from The Independent Vanguard Advisor was kind enough to provide a Moderate Portfolio for this article. In this article, I am describing one managed Traditional IRA portfolio (50/50), one managed Roth IRA portfolio (70/30), one managed tax efficient portfolio (50/50), o ..read more
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Financial Discoveries: 10 Cool Things I Learned in January
Mutual Fund Observer
by David Snowball
1M ago
College professors are, quintessentially, learning machines. Give us 15 minutes of peace, and we’ll sink happily into piles of data, stacks of books, beckoning journal articles, or quiet processing. And the reality of the matter is that almost no one gives anyone 15 minutes of peace these days. Why 15 minutes? Read Mihaly Csikszentmihalyi, Flow: The Psychology of Optimal Experience (2008). Flow is a state of complete immersion in a project, and it seems to take us 15 minutes or so to get in the flow. Every “do you have just a minute?” kicks us back out and costs us another 15 minutes to get ba ..read more
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Patriotic Millionaires and the Uncertainty of Taxes
Mutual Fund Observer
by Charles Lynn Bolin
1M ago
Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes. — Benjamin Franklin, in a letter to Jean-Baptiste Le Roy, 1789 I read  Tax the Rich!: How Lies, Loopholes, and Lobbyists Make the Rich Even Richer by Morris Pearl and Erica Payne at the Patriot Millionaires. They are a group of over 200 “high net worth individuals with annual incomes over $1 million and/or assets over $5 million who are committed to raising the minimum wage, combatting the influence of big money in politics ..read more
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Snowball’s Indolent Portfolio, 2023
Mutual Fund Observer
by David Snowball
1M ago
Someone will always be getting richer faster than you. This is not a tragedy. I’ve heard Warren say a half a dozen times, “It’s not greed that drives the world, but envy.” Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley? Charles Thomas Munger (1924-2023) Each year I share with readers my unenviable portfolio. By design, my portfolio is meant to be mostly ignored for all periods because, on the whole, I have much better ways to spend my time, energy, and attention. For t ..read more
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