FMSDX - Time to Sell?

[fred495]

The Fed is now talking about significantly accelerating raising interest rates and unwinding its huge balance sheet of Treasuries and MBS.

Last week, for example, FMSDX, an allocation fund with 40% in bond holdings, lost 2.2%. M* still reports that as of 12/31/21 the fund has "extensive interest rate sensitivity" with a duration of 8.5 years.

In light of the Fed's release of the minutes of its March meeting, was last week's poor performance due primarily to the fund's bond holdings? Is it possibly a forerunner of things to come? Is it time to consider selling FMSDX?

Opinions/suggestions are appreciated.

Thanks,

Fred

[jongaltiii]

fred495 FWIW... many of the AA funds are down over the last 5 days: FBALX-2.51 PRWCX -1.25 VLAAX -1.42 and FMSDX -2.73 for comparison. I'm hanging on to my holdings in FBALX and FMSDX but I have zero in bonds funds

[Mustang]

FMSDX is a multi-asset fund. A couple of years ago it had somewhere around 60% bonds. It has jumped categories from moderate-allocation to conservative allocation. You might want to read my reply in the Armchair Investing forum. Its managers seem to be busy adjusting their position to what they see as future market conditions.

Whether you sell or not is up to you. Only you know your financial situation and tolerance for risk. I'm in three balanced funds: two moderate-allocation and one conservative-allocation. RMDs are forcing me to sell the one in my traditional IRA but I'm reinvesting the withdrawal in another balanced fund. I'm also adding to that and buying right now using dollar-cost-averaging lower prices mean that I get more shares with each purchase. Since my pension and social security pay all of our bills I can ride out a market decline. I've been through bear markets before and look at historical performances as a guide. Even under the worst case scenario I expect the market to mostly recover in a couple of years like it did after the 1973 and 1974 bear market.

The only advice I can give is try to remember that when you buy into a fund you no longer hold dollars but shares. The number of shares that you own doesn't go up and down just the expected value if you sold on that day. You do not lock in losses unless you sell. I'm a buy and hold investor. I don't sell unless it is to reposition according to my plan such as transitioning my portfolio from the accumulation phase to the withdrawal phase or if I expect a fund to lose value and never recover. Other than that I expect the fund managers to do their job.

[xray]

Mustang,
Your:
The only advice I can give is try to remember that when you buy into a fund you no longer hold dollars but shares. The number of shares that you own doesn't go up and down just the expected value if you sold on that day. You do not lock in losses unless you sell. I'm a buy and hold investor. I don't sell unless it is to reposition according to my plan such as transitioning my portfolio from the accumulation phase to the withdrawal phase or if I expect a fund to lose value and never recover. Other than that I expect the fund managers to do their job.

----------

 Buy and Hold can be expensive. NAV's and book values are everything (where the value is). MktPrc's are where the traders are and some react to message boards (volatility)....
 I agree that we all should be buy/hold types but our individual analysis should be measuring the fund managers performance in both UP and DOWN markets. As I made reference to on another string, GLO, GLQ and GLV are great in UP markets (buy & Hold) but are currently collapsing (sell out) in the down market. Income investors who "think" they are getting a good dividend [which will be going lower with the NAV continuing to collapse) will be losing in the MktPrc (investment dollars going down much faster than the dividend)....
 Examples: On 12/19 GLO had a MktPrc of 11.41, today it is worth 9.20 ... distribution of 9.79% COB Friday
................ On 12/19 GLQ had a MktPrc of 13.74 today it is worth 11.20 .. distribution of 9.95%
................ On 12/19 GLV had a MktPrc of 10.87 today it is worth 9.03 .... distribution of 10.11%
  If we take notice of GLQ's announcement below, their distribution is based on "PAST TENSE" last years numb3rs and takes no notice of this years performance. All have very negative numb3rs going forward....

GLQ's latest distribution announcement:
PR Newswire
CLOUGH GLOBAL EQUITY FUND DECLARES MONTHLY CASH DISTRIBUTIONS FOR APRIL, MAY AND JUNE 2022 OF $0.1162 PER SHARE
Fri, April 8, 2022, 6:00 AM
In this article:

GLQ
-1.88%

DENVER, April 8, 2022 /PRNewswire/ -- Today, the Board of Trustees (the "Board") for the Clough Global Equity Fund (the "Fund") has declared a monthly cash distribution of $0.1162 per common share, payable on the dates noted below. The Fund's managed distribution policy is set the monthly distribution rate at an amount equal to one twelfth of 10% of the Fund's adjusted year-end net asset value per share ("NAV"), which will be the average of the NAVs as of the last five business days of the prior calendar year.

The following dates apply to the distributions declared:

Ex-Date: April 18, 2022
Record Date: April 19, 2022
Payable Date: April 29, 2022

Ex-Date: May 19, 2022
Record Date: May 20, 2022
Payable Date: May 31, 2022

Ex-Date: June 16, 2022
Record Date: June 17, 2022
Payable Date: June 30, 2022

A portion of the distribution may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain and return of capital. The final determination of the source of all distributions, including the percentage of qualified dividend income, will be made after year-end.

The Clough Global Equity Fund
The Fund is a closed-end fund utilizing Clough Capital's research-driven, thematic process, with an investment objective of providing a high level of total return. Having a global, flexible mandate, the Fund will invest at least 80% in equity and equity-related securities in both U.S. and non-U.S. markets, and the remainder in fixed income securities, including corporate and sovereign debt, in both U.S. and non-U.S. markets . The Fund's portfolio managers are Chuck Clough and Rob Zdunczyk. As of March 31st, 2022 the Fund had approximately $416.5 million in total assets.

----------

Something for income investors to think about....

Live Long and Prosper....