Thought it interesting that the biggest mutual fund is a bond fund. If that doesn't speak volumes on how conservative we've become as investors I don't know what does. http://dealbook.blogs.nytimes.com/2009/12/23/pimco-takes-lead-as-biggest-mutual-fund/ Bill Gross’s Pimco Total Return Fund became the biggest mutual fund in the industry’s history as assets reached $202.5 billion on Dec. 17,... [more]
Thought it interesting that the biggest mutual fund is a bond fund. If that doesn't speak volumes on how conservative we've become as investors I don't know what does.
http://dealbook.blogs.nytimes.com/2009/12/23/pimco-takes-lead-as-biggest-mutual-fund/
Bill Gross’s Pimco Total Return Fund became the biggest mutual fund in the industry’s history as assets reached $202.5 billion on Dec. 17, Bloomberg News reported.
“Our goal was never to be the biggest, but rather to be the best,” Mr. Gross, co-chief investment officer of Pacific Investment Management Company, said today in an e-mail message.
The record had been $202.3 billion, set by Growth Fund of America in 2007, according to data compiled by Morningstar in Chicago. The stock fund, managed by Los Angeles-based Capital Group, now has about $153 billion.
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Total Return advanced 6.9 percent in the past five years, beating 99 percent of rival funds, according to data compiled by Bloomberg. The fund rose 4.8 percent in 2008 as the Standard & Poor’s 500 Index fell 38 percent, its worst year since the Great Depression.
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Response by evnyc
about 16 years ago
Posts: 1844
Member since: Aug 2008
Riversider, did you see this article from WSJ a couple of days ago?
Hard to do worse than stocks over the past decade.
"The U.S. stock market is wrapping up what is likely to be its worst decade ever.
In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.
Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.
****
This past decade looks even worse when the impact of inflation is considered.
Since the end of 1999, the Standard & Poor's 500-stock index has lost an average of 3.3% a year on an inflation-adjusted basis, compared with a 1.8% average annual gain during the 1930s when deflation afflicted the economy, according to data compiled by Charles Jones, finance professor at North Carolina State University. His data use dividend estimates for 2009 and the consumer price index for the 12 months through November.
Even the 1970s, when a bear market was coupled with inflation, wasn't as bad as the most recent period. The S&P 500 lost 1.4% after inflation during that decade.
That is especially disappointing news for investors, considering that a key goal of investing in stocks is to increase money faster than inflation.
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Response by Riversider
about 16 years ago
Posts: 13572
Member since: Apr 2009
evnyc.. I did
Reminded me of how everyone invests with a rear view mirror. Buying what went up the most in the past. I don't believe bonds will deliver the top returns over the next ten years, but may outperform stocks on a risk adjusted basis. My thinking is that we're GOING TO SEE INFLATION AND DOLLAR DEPERCIATION. My thoughts are we're only in the second inning of a bull run in commodities.
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Response by marco_m
about 16 years ago
Posts: 2481
Member since: Dec 2008
It really shouldnt be a shock. whats the standard face value of 1 bond? what market is larger..the treasury market or the dow and nasdaq combined?
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Response by Riversider
about 16 years ago
Posts: 13572
Member since: Apr 2009
Salient point Marco, but I think the bigger issue is perception of risk.
In the 1950's the thought was that stocks SHOULD yield more than bonds to compensate for the risk. That reversed later because bonds were pereceived not to offer growth of dividend. We're back to return of capital over return on capital.
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Response by marco_m
about 16 years ago
Posts: 2481
Member since: Dec 2008
most institutions which invest in bonds do so becuase of mandate not because of risk vs reward. people have always invested in bonds because thye wanted preservation of capital.
whats the worst thing for bonds outside of default?
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Response by Riversider
about 16 years ago
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Mandate is the result of risk reward. Enem of bonds is inflation and default.
Rising preference of bonds is multi-faceted.
1) Aging population
2) Past performance
3) Endowments and other institutions re-evaluating their risk profile
list goes on.
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Response by marco_m
about 16 years ago
Posts: 2481
Member since: Dec 2008
thats why billy g has been movin alot of $$ into cash
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Response by Riversider
about 16 years ago
Posts: 13572
Member since: Apr 2009
Personally I'm thinking short duration high quality bonds mixed with commodities. Munis work for the tax benefit.
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http://www.bloomberg.com/apps/news?pid=20601208&sid=aJ2pEFgmlw5c
Total Return advanced 6.9 percent in the past five years, beating 99 percent of rival funds, according to data compiled by Bloomberg. The fund rose 4.8 percent in 2008 as the Standard & Poor’s 500 Index fell 38 percent, its worst year since the Great Depression.
Riversider, did you see this article from WSJ a couple of days ago?
Hard to do worse than stocks over the past decade.
http://online.wsj.com/article/SB10001424052748704786204574607993448916718.html?mg=com-wsj
"The U.S. stock market is wrapping up what is likely to be its worst decade ever.
In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.
Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.
****
This past decade looks even worse when the impact of inflation is considered.
Since the end of 1999, the Standard & Poor's 500-stock index has lost an average of 3.3% a year on an inflation-adjusted basis, compared with a 1.8% average annual gain during the 1930s when deflation afflicted the economy, according to data compiled by Charles Jones, finance professor at North Carolina State University. His data use dividend estimates for 2009 and the consumer price index for the 12 months through November.
Even the 1970s, when a bear market was coupled with inflation, wasn't as bad as the most recent period. The S&P 500 lost 1.4% after inflation during that decade.
That is especially disappointing news for investors, considering that a key goal of investing in stocks is to increase money faster than inflation.
evnyc.. I did
Reminded me of how everyone invests with a rear view mirror. Buying what went up the most in the past. I don't believe bonds will deliver the top returns over the next ten years, but may outperform stocks on a risk adjusted basis. My thinking is that we're GOING TO SEE INFLATION AND DOLLAR DEPERCIATION. My thoughts are we're only in the second inning of a bull run in commodities.
It really shouldnt be a shock. whats the standard face value of 1 bond? what market is larger..the treasury market or the dow and nasdaq combined?
Salient point Marco, but I think the bigger issue is perception of risk.
In the 1950's the thought was that stocks SHOULD yield more than bonds to compensate for the risk. That reversed later because bonds were pereceived not to offer growth of dividend. We're back to return of capital over return on capital.
most institutions which invest in bonds do so becuase of mandate not because of risk vs reward. people have always invested in bonds because thye wanted preservation of capital.
whats the worst thing for bonds outside of default?
Mandate is the result of risk reward. Enem of bonds is inflation and default.
Rising preference of bonds is multi-faceted.
1) Aging population
2) Past performance
3) Endowments and other institutions re-evaluating their risk profile
list goes on.
thats why billy g has been movin alot of $$ into cash
Personally I'm thinking short duration high quality bonds mixed with commodities. Munis work for the tax benefit.