Investing Approaches that do NOT involve frequent Trading

Thanks Racq--Anything other than Trading is fine with me.   I want posters to feel comfortable and willing to discuss other investing approaches, that do not involve frequent trading.   Whether I use it or not, is not important.  I do suspect quite a few investors would use allocation/balanced funds for longer term holdings. Conservative bond oefs can be good options for longer term holdings.  PIMIX was, and still is, a longer term option because it produces a significant income stream.   Just looking for anything from investors they believe are good longer term holdings for their portfolio.

Fair.  I think you could probably hold something like SMH for a reasonable period; although it is going to be volatile.  I think you can safely hold RSP; though you might continue to take some opportunity costs.  Depends on whether rotation is in the cards.  I like something like TLT for maybe a year or so.  Again, might be some volatility involved there.  Allocation funds should do better than they have for a while (unless we go into recession).  USFR is still solid, but unspectacular.  Not sure there's anything to hang your hat on in all that?

TLT is a play on falling rates; not rising ones.  TLT was not a good play until very recently; so what happened while rates were rising isn't pertinent if rates are going to be falling!  True, it's a bet, but it should be a good bet through next year.

I would hold IOFIX instead of TLT. 🤑

I think that descriptor would fit a lot of investors.  Fwiw, I think that for a really long, 'buy it and forget it' investment, you have to have someone minding the investment.  I'm not convinced that any approach is safe if it is totally hands off by everyone.  I'd want someone I respect looking at the investments on a regular basis and making adjustments as required; because, imho, adjustments are always going to be required as conditions change.  Look at what happened with 'safe' bonds while rates were rising.  Look at what happened as a result with allocation funds.  Look what happened over the last few years with 'safe' value stocks.  So either you do it or you have a manager who does it.  The time frame and level of allowable risk are the variables.

I understand the concept of "risk" has its own complexities when defining what it means to each investor. Technically, Volatility relates closely to risk, and volatility ties closely to Standard Deviation measures. So, I tend to list SD for many of the investments I am considering. Practically, I use "risk" in my commentary, with regard to the possibility of my investment losing value. I consider MMs and CDs as low risk, based on their history of holding value with a lot of protections of insurance and related protections. I have used bond oefs extensively in the past, and I have learned how difficult it is to really know how risky a fund is, as markets change and funds behave differently in different markets. I "attempt" to gather as much information as I can about a bond oef, try to see how it has performed in different markets, try to measure peak to trough performance in downmarkets, etc. etc. There are no gurarantees of how a fund might differ from its past performance, so you just do your best putting a risk label on each investment you make. That said, my overall portfolio objective is to "preserve principal" with minimal risk in down performance, and with an "acceptable" level of positive total return. In 2020, my bond oefs were put to the test of how safe or low risk they were. All of my bond oefs started deteriorating in March of 2020, but fortunately my bond oefs were deteriorating pretty slowly, so I had some time to make a decision to continue holding them or not. I held on to funds like RPHIX the longest, but ultimately they were not cash substitues, so I no longer accept other posters description of it as an equivalent or alternative to cash, knowing it still has risk of losing value that is more than actual cash, MMs, CDs, etc. I decided to sell all those bond oefs before I incurred major losses, went to cash in the form of MMs and CDs. I have not decided when I will trust bond oefs again as safe enough to move my cash back into them. For now, with CDs going down in interest rates, I am starting to look at bond oefs like RPHIX and CBLDX as meeting "my definition" of low risk, but others will have to land on their definition of risk levels. What ever I choose to invest in, it will be my "intent" to hold it for at least a year, but I accept "life" and market changes may get in the way of my intended investing decisions. I am 75, do not have a company retirement pension or sizeable social security payments, so I have increased my emphasis on preserving my portfolio principal, and not on maximizing accumulation with more "risk" than I am comfortable with.

Just one other note:  I enjoy investing commentary by other posters, but I don't view any other investor as my Financial Advisor.  Almost all posters are reflecting their unique investing decisions, based on their unique personal life situation. Ultimately, it is my opinion that each poster tip toe carefully through the comments of any other poster, who thinks they are smart enough to tell you what you should do or not do, just because they have an investing approach that works for them individually.

racq: TLT would indeed do great when rates fall. My system works on lower SD=volatility too. I want both and TLT was and will never have a lower SD. Chances I will ever invest in TLT = zero. I can't predict or trade it efficiently.
IOFIX is a play on recovery without dealing so much with rates. His history tells us that this fund tends to crash much more when black swan shows, but the rebound is a lot stronger too(schrts.co/vVubfBNW). In the past I had at least 50% in it, but never again that high.
Looking closer at it: If you look at one year and the rebound (schrts.co/yTVTUAqm), it's very easy to see that SEMMX did better for both, and ORNAX had a much better rebound. I'm more conservative now with a lot more money.

Racq: "adjustments are always going to be required as conditions change"
FD: not for most. Indexers (boglehead) don't do it and many times beat investors who make changes because many who trade more, make mistakes.
If I'm gone my wife has the following instructions for B&H funds forever (fd1000.freeforums.net/thread/18/funds-wife-own-when)

chahta: "I really don't want to argue about TR vs. Income investing, but I suppose I am both."..."That is too much work for me."
FD: We didn't mention TR vs. Income and I don't think it's relevant to this discussion. Too much work is in the eye of the beholder. My original system that I practiced for about 13-15 years was to run funds screener 3 times annually and select the best risk/reward funds for 3-6-12-36 months. That is a better guarantee to own categories/funds that work. History proved that markets can be one-sided for years. The differences have been huge.
1995-2000 + 2010-2021 + 2023 = US LC tilting growth...2000-2010: terrible for US LC, they lost money for 10 years.
2023: SCHD is 20% behind SPY, that is a huge lag.
There is a big room between daily/weekly trading to monthly/yearly. Someone who hardly trades would hardly do it. There is nothing wrong with hardly trading, as I said above, it works for most.

chahta: CBLDX, in my opinion, will be a good buy
FD: it is a good one, but RPHIX is definitely better as "sub" cash. If SEMMX doubles CBLDX's performance in 2024, is it still a good choice?
It is based on style and goals.

================

I have to admit that I love trading based on markets. For me it's not work, it's a pleasure. I can do nothing for months. I never believed that "market are unpredictable and you can't find patterns", I did, and it took years to come up with simple solutions. I also found out that bond OEFs are the "perfect" vehicles to do that. Then I found another poster, Junkster, who has played the same field many more years than me. He just trades a lot more.
The more money I have the less SD I want, especially at my age.
DT has done a great job with his style and approach. He invested mostly in MM+CDs,RPHIX in 2022-23(please tell me if I'm off) and now starting to look at bond OEFs. DT is a slow timer but still a timer.
BTW, I could change my approach to DT style when I get older. I'm starting to think about why not just trade 3 times annually and make 2+% each time and the rest in very conservative funds and make at least 8%, that's all I want to do.

DT, you basically invested based on market conditions, and when they didn't fit your goals, you traded more. You also went far and changed most of your portfolio to MM+CDs. A small change of 10% is meaningless. That is what good traders do. The idea is to know exactly what are your needs and tailor a specific style around it.
This is what I do within my style+goals. I have been asked, if you trade bond OEFs so well, why not trade stock/CEFs and make more? The answer: I don't need to take more risk/SD + my system works a lot better with slow-moving funds. A good example was my trade of buying HY Muni on Nov 1st, I only held 8 days because 4% is a lot of money for the bird in the hand, sure 10% would be better, but I don't care too much.

Racq: "This thread as so far been informative about where we think things are going. I hope that is what DT had in mind?"

If it is informative to any investor/poster, for whatever reason, then I am very pleased with that outome for this thread. It just seemed this forum was not seeing much posting about investing approaches, other than FDs Trading approach. I see numerous posts from FD about his "trading" successes. He clearly is proud to be a trader, but when I have attempted that, I was terrible at it. I simply wanted posters/investors to have an opportunity to participate in a thread, that does "NOT involve frequent Trading".  So far, I am encouraged by the variety of investors/posters who have been willing to post and discuss their investing approaches, whether it is different than FDs or different than mine.

chahta, I tend to agree with your statements about SEMMX, as a heavy investor in it for years.  It appears to me that it is heavily dependent on the use of derivatives, which can give it a characteristic of "safeness and low volatility" for some extended periods, only to see it tank dramatically in other periods.  At its peak of popularity, it was a $2.1 billion dollar fund, openly discussing the need to close the fund to protect its accumulations. Now it is a shell of itself, with a very small asset base, and not much trust by investors any longer.  It may be attractive to short term traders, but it no longer has much appeal as a longer term holding to me 

I do find that CBLDX and RSIIX are interesting, with both managed by David Sherman, although CBLDX is a multisector bond oef and RSIIX is a HY bond oef.  Apparently, CBLDX is part of the Cohanzick Management Company, and Sherman is the President of that Company.  RSIIX is under the umbrella of Riverpark Funds, who has chosen Cohanzick management as a Subadvisor to manage RSIIX.  All kind of interesting when you start digging into the Management of the 2 funds.  Since you are a proponent of both funds, you probably have more details about all this management crossover between them.



 

If 03/2020 is your test then most funds that are not treasuries should be avoided.
Black swans are great opportunities to buy. What did IOFIX make starting on 04/01/2020 to the end of 2021, which is 1 year and 8 months?
2020+21 were my best years investing in bond OEFs. See the chart below, my 2 biggest holdings were NHMAX+IOFIX before 2/29/2020 and after the crash.
Of course, there are no guarantees.

You are right. IOFIX was just a tease VS TLT. It lost its mojo in the last 2 years. I see SEMMX,BDKAX as better candidates, you can also play it with lower SD securitized funds such as RCTIX,VCFIX. HY Munis could also make 10+% in 2024 if rates fall enough.

A sensible approach to take, DT. Not being the type to make large, abrupt changes in positioning as does FD on a regular basis, it behooves you to avoid things which can fall quickly and unpredictably.

FD: "It's hard to believe you will not make any changes in the next 12 months."

I have not made any decisions--I will weigh my options each time I have a CD mature.