Monthly Archives: September 2014

What Are Pimco Funds Risk After Departure of Bill Gross

   Regarding the risk that Pimco might sell off a lot of assets after the departure of Bill Gross and make bond prices go down, FT.com said today that may affect inflation linked bonds like TIPs and junk bonds. I have been opposed to inflation linked TIPs bonds for many years and have recently gotten rid of most “B” quality bond funds so the Pimco situation appears to have been a non-event for my recommended mutual funds. I have been saying for a while that avoiding illiquid thinly traded assets may be a good way to reduce risk.    If bond prices dip temporarily then eventually the Invisible Hand of the market will bring them back to fair value. The

September 30th, 2014|mayflowercapital blog|Comments Off on What Are Pimco Funds Risk After Departure of Bill Gross

Bearish Advisors Making Bullish Comments?

   Robert Shiller, developer of the PE10 theory on CNBC recently said though the stock market is “overpriced,” it’s still probably “not a bad investment, all things considered,”. This seems contradictory.  I assume he is deciding to buy simply because of momentum even while admitting it is overpriced. The risk is to make a purchase of stock when it is this high one would be under greater need to be a very high quality market timer to make a snap decision to sell before it goes down, but in today’s world of Flash Crashes it may be impossible to get out at the top, so it may be a better strategy to voluntarily forgo the final run up to the

September 30th, 2014|mayflowercapital blog|Comments Off on Bearish Advisors Making Bullish Comments?

What to do if You Want to Get Out of Pimco Bond Funds

   Regarding Pimco bond funds, if you really want to get out of Pimco mutual funds but still be in bonds may I suggest that you consider using an independent advisor to pick open end institutional class )”I” class) mutual funds that hold bonds. This class has much lower fees than the “A” shares class. I have no plans to reduce my clients’ holdings of various Pimco mutual funds. If you want to get out of Pimco and invest in a fund without an advisor you could try a passive bond ETF but I have written before that I don’t approve of them because of some statistical anomalies that can create modest pricing inefficiencies which eat up some of the

September 30th, 2014|mayflowercapital blog|Comments Off on What to do if You Want to Get Out of Pimco Bond Funds