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Post by FD1000 on Oct 1, 2022 23:13:10 GMT
Below are excerpts: CDC ETF: Large Cap Dividend Exposure With Less Risk(link).
Summary * CDC is a high dividend, low volatility fund that strategically exits equities in favor of U.S. treasuries during signs of market weakness. The ETF lost just 1% in March 2020. * Unlike other low volatility ETFs, CDC also performs well in rising markets. The ETF has matched the S&P 500 since April 2020, and beat it on risk-adjusted returns, too. * With market participants favoring value over growth stocks lately, CDC scores well with its 15.80x forward price-earnings ratio. It also has double-digit EPS growth estimates and a 0.85 market beta. *While CDC works best for conservative dividend investors, its three layers of protection work great for the investor who doesn't want to have to watch the market daily. Therefore, I'm maintaining my buy rating on CDC today.
CDC offers three layers of portfolio protection in the form of high dividends, low volatility levels, and a policy of exiting equities in favor of U.S. treasuries during early signs of market turmoil. And, unlike other low volatility ETFs that substantially underperform during rising markets, CDC holds its own against its more risky competitors. CDC has better risk-adjusted returns than the S&P 500, and its constituents have double-digit EPS growth estimates and an ultra-low 15.80x forward P/E ratio. For these reasons, I'm maintaining my buy rating on CDC today
CDC passively tracks the Nasdaq Victory U.S. Large Cap High Dividend 100 Long/Cash Volatility Weighted Index. This Index selects the largest 500 U.S. equities, except for REITs, and eliminates those without four consecutive profitable quarters. The highest-yielding 100 stocks are selected and inversely weighted by their 180-day standard deviations of price returns. In addition, sector exposures are capped at 25%, and the Index is reconstituted semi-annually in March and September.
CDC is 100% invested in equities, with exposures mostly in defensive sectors like Utilities, Financials, and Consumer Staples. These three total 63.64%, while other sectors like Consumer Discretionary and Industrials have less than 5% exposure each.
Following a rules-based methodology, CDC will exit equity positions in favor of treasury bills whenever its Index price hits certain trigger points relative to its All-Time Highest Daily Closing Value ("AHDCV").
See a 3-year ( chart, and change to YTD) of CDC vs SPY. Fred mentioned CDC months ago. Attachments:
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Post by anitya on Oct 2, 2022 5:49:07 GMT
If anybody cares, just an FYI -
I have been experimentally trading CDC for sometime.
It inexplicably went to 75% cash in July and did not get back to 100% stocks until Aug 2 and missed the July market bounce. But it chose to ride the market down all the way from August 15 peak, and in the last one week, it started losing more than SPY when value and midcap under-performed.
Because this is an active fund, I follow this fund way more closely to avoid whipsaws than I follow SPY. Going to cash at the wrong time can hurt performance but I guess it can avoid catastrophic losses when done right.
I still have not figured out how this fund avoids cap gain distributions from high portfolio turnover (especially going to high cash sporadically) and so to avoid distribution surprises, I use it in IRAs only.
The hope is may be one day I get comfortable to make this a significant holding not needing to watch it.
Edit: please read later posts for information on CDC.
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Post by Norbert on Oct 2, 2022 8:11:29 GMT
What am I missing? SCHD has better absolute and "risk adjusted" returns than CDC since inception.
I suggest pairing SCHD with PQTIX to hedge downside risk.
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Post by anovice on Oct 2, 2022 9:25:36 GMT
What am I missing? SCHD has better absolute and "risk adjusted" returns than CDC since inception. I suggest pairing SCHD with PQTIX to hedge downside risk. Thanks for the information on SCHD. Does SCHD belong in a tax-sheltered account or is it tax-efficient for a taxable account?
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Post by rhythmmethod on Oct 2, 2022 13:08:55 GMT
What am I missing? SCHD has better absolute and "risk adjusted" returns than CDC since inception. I suggest pairing SCHD with PQTIX to hedge downside risk. Thanks for the information on SCHD. Does SCHD belong in a tax-sheltered account or is it tax-efficient for a taxable account? Many of us hold SCHD (and other income-generating equities) in taxable accounts. ETFs and single stocks are more tax efficient than OEFs that can throw out unexpected capital gains even in a down year.
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Post by ECE Prof on Oct 2, 2022 15:36:27 GMT
I used SCHD in both taxable and Roth accounts. I started investing in SCHD from June 26. It is better than SPYD or VYM. I will go back to it latter, when I see the market bounces back.
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Post by retiredat48 on Oct 2, 2022 16:28:54 GMT
I try to avoid any fund whose makeup is that they plan from time ot time to go to high "cash positions" in lieu of their stated investment theme. Long story why.
I want to leave that going to cash, up to me.
R48
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Post by anitya on Oct 2, 2022 18:37:37 GMT
Good thought on pairing SCHD and PQTIX. I have owned SCHD for sometime.
I need help with the following:
High debt burdens on corporate balance sheets has been bothering me. Companies tend to buy back stock using debt during high stock prices (for reasons we do not need to get into) so the borrowing does not necessarily help with future business growth potential. I know SCHD has a quality screen but I would like to get to a much lower D/C ratio than SCHD's 50.
Do you know any US equity ETFs whose portfolio metrics show at least 3% dividend yield but 40% or below D/C ratios? or do you know where I can screen ETFs for debt?
XLE and KBE meet this criteria but I am looking for a broader, non-sector specific ETF.
I tried Schwab screen for Valuation and it has the choices listed below, none of which come close to being a good direct proxy for debt/equity ratio:
Annual Return criteria Price/Earnings criteria Price/Book Value criteria Price/Sales criteria Price/Cash Flow criteria Sales Growth criteria Cash Flow Growth criteria Book Value Growth
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Post by fishingrod on Oct 2, 2022 20:43:14 GMT
What am I missing? SCHD has better absolute and "risk adjusted" returns than CDC since inception. I suggest pairing SCHD with PQTIX to hedge downside risk. Thanks for the information on SCHD. Does SCHD belong in a tax-sheltered account or is it tax-efficient for a taxable account? SCHD is about as tax efficient as a high yielding value fund gets. It's dividends have been almost 100% qualified. It will not be as tax efficient as say VTI with lower dividends and higher growth, but if one is looking for diversified value dividends then it is good.
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Post by FD1000 on Oct 3, 2022 0:34:11 GMT
What am I missing? SCHD has better absolute and "risk adjusted" returns than CDC since inception. I suggest pairing SCHD with PQTIX to hedge downside risk. I think you missed it... 1) I can't find in my OP where I said that CDC is the best option. 2) I have been posting about SCHD many years and before many caught on. SCHD performance have been good when growth+value did well. SCHD 3+% is the answer for investors who look for income but also care, and they should, about risk-adjusted return. All this in one ETF with ER=0.06%. It took awhile but SCHD isn't a "secret" anymore. AUM>35 billions. 3) We discussed PQTIX too. This fund made almost nothing in 5 years (2015-9). I don't know many investors who can hold a "unique" fund like this for 5 years. We also know that ALT funds have not done well over the years, they do well, and then they don't. 4) SCHD did much better than PQTIX since the inception of PQTIX. That's a great line, Norbert. From now on, every time, you mention a fund and SCHD did better than that fund, since the inception of SCHD, I will post about it. 5) As a trader, I don't believe in any fund, who can do it successfully. Losing less is still losing. PQTIX may be the answer, time will tell, it may be a good option in the next several years. Below is PQTIX 5 years, 2015-19, performance VS SPY+SCHD+CDC(all had a nice easy performance). Attachments:
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Post by Norbert on Oct 3, 2022 2:34:38 GMT
FD1000 Think again. PQTIX has been a better hedge than bonds. Here's a simulation of three 60/40 portfolios from 2014 through September 2022. Portfolio 1: 60% SCHD + 40% PQTIX Portfolio 2: 60% SCHD + 40% BOND Portfolio 3: 100% VWELX Click to enlarge. As for CDC, you're the one started a thread about it, claiming it has "less risk". But, it's down 13% YTD, which is not my notion of "less risk".
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Post by habsui on Oct 3, 2022 16:07:24 GMT
I established a small position in PQTIX a few months ago to monitor what Norbert outlined. So far so good..
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Post by FD1000 on Oct 3, 2022 20:41:02 GMT
FD1000 Think again. PQTIX has been a better hedge than bonds. Here's a simulation of three 60/40 portfolios from 2014 through September 2022. Portfolio 1: 60% SCHD + 40% PQTIX Portfolio 2: 60% SCHD + 40% BOND Portfolio 3: 100% VWELX Click to enlarge. View AttachmentView AttachmentAs for CDC, you're the one started a thread about it, claiming it has "less risk". But, it's down 13% YTD, which is not my notion of "less risk". Can you point out where I said CDC=less risk? YTD...CDC -10.8...SPY -21.9 = 11% better. I have started hundreds of posts, that is what we do here. If you don't like it, you can disregard my posts. I love your 20/20 hindsight. As I said before, it will not take long before you post about a fund you like and I will likely find something better. BTW, how come you didn't mention the 5 years PQTIX made zilch. Time will tell if PQTIX is a good fund. I hope it is. I love when someone makes money. Of course, PQTIX was better, bonds had the worst YTD in decades. When both stocks+bond recover, we will see how PQTIX will do.
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Post by liftlock on Oct 4, 2022 2:03:44 GMT
I need help with the following: High debt burdens on corporate balance sheets has been bothering me. Companies tend to buy back stock using debt during high stock prices (for reasons we do not need to get into) so the borrowing does not necessarily help with future business growth potential. I know SCHD has a quality screen but I would like to get to a much lower D/C ratio than SCHD's 50. Do you know any US equity ETFs whose portfolio metrics show at least 3% dividend yield but 40% or below D/C ratios? or do you know where I can screen ETFs for debt? Validea rates ETFs on a variety on factors. High Debt is one of the factors included in their negative quality rankings. www.validea.com/aboutus/etffactorreportuserguide.pdfAttached is a screen of EFTs where the underlying holdings have low bottom quartile (favorable) ranking scores for High Debt along with high top quartile ranking scores for Shareholder Yield. You will have to look up the dividend yield as there is no screening criteria for that.
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Post by Deleted on Oct 4, 2022 2:38:08 GMT
FD1000 Think again. PQTIX has been a better hedge than bonds. Here's a simulation of three 60/40 portfolios from 2014 through September 2022. Portfolio 1: 60% SCHD + 40% PQTIX Portfolio 2: 60% SCHD + 40% BOND Portfolio 3: 100% VWELX Click to enlarge. View AttachmentView AttachmentAs for CDC, you're the one started a thread about it, claiming it has "less risk". But, it's down 13% YTD, which is not my notion of "less risk". Can you point out where I said CDC=less risk? YTD...CDC -10.8...SPY -21.9 = 11% better. I have started hundreds of posts, that is what we do here. If you don't like it, you can disregard my posts. I love your 20/20 hindsight. As I said before, it will not take long before you post about a fund you like and I will likely find something better. BTW, how come you didn't mention the 5 years PQTIX made zilch. Time will tell if PQTIX is a good fund. I hope it is. I love when someone makes money. Of course, PQTIX was better, bonds had the worst YTD in decades. When both stocks+bond recover, we will see how PQTIX will do. This miscommunication brings up a good point. I assume when a poster posts an article, basically they agree with the article. It appears this is not the case. Many of these articles are really not examples of journalistic integrity. I have no comment on this one, as even though I was interested in the topic, I didn't know what the "link" was. I have pointed out posted articles where the headline touts a respected figure and implies they are picking stocks. Junk. Sound bytes from an interview have been included in the intentionally poorly written article and then someone else's picks or slant on the markets inserted. It really takes some rigor to figure out they are not credible. There are also the ones that extract sound bytes from an interview so that a completely different interpretation is presented other than that which the full interview conveys. So here is an article and the headline clearly states there is less risk with this etf. Evidently this is not the case. It's bothersome that so much misrepresentation gets out there! I don't read posted articles unless there is some explanation as otherwise it can become an english critique class. This article caught my eye as I am interested in dividend funds. I did not click on the link as I did not know what it is other than "link". In research there is an assumption that some degree of rigor is applied to what is presented. If it is not it is meaningless. We have all seen the hundreds of daily articles gen'd up for our consumption. Rather than argue whether a headline or the OP is making a statement, it would be helpful to be more clear if the OP agrees with an article or what aspects they do or do not. Just a thought. I personally would also appreciate links being identified so I can determine whether to click or not. Frankly it looks like an interesting ETF, but does it have less risk? It sounds like Anitya has on the ground experience - thoughts? Full disclosure - I will not buy it as I can already tell I don't understand it (exiting and all of that), but it is instructive to know how it might compare to SCHD.
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Post by Norbert on Oct 4, 2022 5:05:53 GMT
FD1000I didn't realize you were paraphasing an article, not giving your opinion. Be more clear next time? ----- "BTW, how come you didn't mention the 5 years PQTIX made zilch. Time will tell if PQTIX is a good fund. I hope it is. I love when someone makes money. Of course, PQTIX was better, bonds had the worst YTD in decades. When both stocks+bond recover, we will see how PQTIX will do." But, I did! My backtest ran from PQTIX inception in 2014 until a few days ago. It's a HEDGE! The fact that it had low returns certain years didn't materially affect portfolio returns for those years; when paired with SCHD or SPY, the performance is about the same as when using bonds as a hedge. But, PQTIX excelled when trouble started, resulting in minimal losses on the portfolio level this year. Bonds did not provide this level of downside protection, and actually contributed to losses this year. Absolutely, it's all hindsight. No one knows if using PQTIX instead of cash or bonds as a hedge will turn out better going forward. I'd never buy PQTIX instead of stocks; the purpose is only for Buy & Hold investors to hopefully improve risk-adjusted returns on the portfolio level. ----- By the way, some of us use inverse funds like SDS or SQQQ to protect our portfolios when we see trouble. uncleharley is a trader who used them VERY effectively to profit from the crash this year (and posted about it honestly, in real time). Obviously, anyone who holds an inverse fund during a stock market rally will lose a lot of money. PQTIX is not an inverse fund; it's a managed futures fund that takes long / short positions using a variety of securities.
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Post by anitya on Oct 4, 2022 6:40:11 GMT
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Post by FD1000 on Oct 4, 2022 13:19:59 GMT
Can you point out where I said CDC=less risk? YTD...CDC -10.8...SPY -21.9 = 11% better. I have started hundreds of posts, that is what we do here. If you don't like it, you can disregard my posts. I love your 20/20 hindsight. As I said before, it will not take long before you post about a fund you like and I will likely find something better. BTW, how come you didn't mention the 5 years PQTIX made zilch. Time will tell if PQTIX is a good fund. I hope it is. I love when someone makes money. Of course, PQTIX was better, bonds had the worst YTD in decades. When both stocks+bond recover, we will see how PQTIX will do. This miscommunication brings up a good point. I assume when a poster posts an article, basically they agree with the article. It appears this is not the case. Many of these articles are really not examples of journalistic integrity. I have no comment on this one, as even though I was interested in the topic, I didn't know what the "link" was. I have pointed out posted articles where the headline touts a respected figure and implies they are picking stocks. Junk. Sound bytes from an interview have been included in the intentionally poorly written article and then someone else's picks or slant on the markets inserted. It really takes some rigor to figure out they are not credible. There are also the ones that extract sound bytes from an interview so that a completely different interpretation is presented other than that which the full interview conveys. So here is an article and the headline clearly states there is less risk with this etf. Evidently this is not the case. It's bothersome that so much misrepresentation gets out there! I don't read posted articles unless there is some explanation as otherwise it can become an english critique class. This article caught my eye as I am interested in dividend funds. I did not click on the link as I did not know what it is other than "link". In research there is an assumption that some degree of rigor is applied to what is presented. If it is not it is meaningless. We have all seen the hundreds of daily articles gen'd up for our consumption. Rather than argue whether a headline or the OP is making a statement, it would be helpful to be more clear if the OP agrees with an article or what aspects they do or do not. Just a thought. I personally would also appreciate links being identified so I can determine whether to click or not. Frankly it looks like an interesting ETF, but does it have less risk? It sounds like Anitya has on the ground experience - thoughts? Full disclosure - I will not buy it as I can already tell I don't understand it (exiting and all of that), but it is instructive to know how it might compare to SCHD. I wear several hats. I make generic comments, specific comments, and personal ones. Examples: 1) I think that PRWCX is the best allocation fund for years. Should I never discuss any other fund? 2) SCHD is my best idea for someone who want s to hold for years, and wants higher income without sacrificing performance. 3) Months ago, I posted that I also like commodities, this one was a specific option trade...if you like to invest based on market. 4) For about 10 years, I posted that I prefer US LC mostly growth and what I held. 5) My own portfolio is based on good risk/reward funds + playing momo. 6) So, what is CDC? Interesting idea. Earlier this year, HDV+CDC momo was better than SPY, HDV was better. SCHD has a much better history. Should I use HDV? That depends on who you are. IMO, most of these ideas (funds/ETFs with build in changing AA) don't work well. Another one is CTFAX The above isn't a secret, most know this, and everybody should do their own due diligence before trading anything. Looking below and HDV was the best for one year and the only one who made money, and CDC the best for 3 years. I was always obsessed with risk-adjusted performance, because it works. BTW, CDC+PQTIX was a better option than SCHD+PQTIX FOR 3 YEARS( link), hindsight 20/20 is great. SCHD worked great in lower risk volatility markets, are the next several years would be the same as 2010-2018 or more like 2018-now? Attachments:
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Post by anitya on Oct 4, 2022 19:00:06 GMT
Just to close the loop -
I decided that I will not use CDC as a long term hold like one would use a SPY, only because I still have the itch to sell myself to avoid huge losses. Also, this ETF may not serve the purpose of increasing portfolio risk coming out of a market bottom if it is stuck in a cash position or defensively positioned. If one were a buy-and-forget investor, I think this can be part of one's portfolio so the fund may avoid catastrophic losses. Not for me at the current time.
It is useful to encourage discussion of good ETFs / funds and not shoot down everything that is not the best. Every good fund has a role in somebody's portfolio - for trading or for investing.
Edit: please read my later post which has more information about this fund and my reasoning.
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Post by habsui on Oct 4, 2022 19:42:36 GMT
This miscommunication brings up a good point. I assume when a poster posts an article, basically they agree with the article. It appears this is not the case. Many of these articles are really not examples of journalistic integrity. I have no comment on this one, as even though I was interested in the topic, I didn't know what the "link" was. I have pointed out posted articles where the headline touts a respected figure and implies they are picking stocks. Junk. Sound bytes from an interview have been included in the intentionally poorly written article and then someone else's picks or slant on the markets inserted. It really takes some rigor to figure out they are not credible. There are also the ones that extract sound bytes from an interview so that a completely different interpretation is presented other than that which the full interview conveys. So here is an article and the headline clearly states there is less risk with this etf. Evidently this is not the case. It's bothersome that so much misrepresentation gets out there! I don't read posted articles unless there is some explanation as otherwise it can become an english critique class. This article caught my eye as I am interested in dividend funds. I did not click on the link as I did not know what it is other than "link". In research there is an assumption that some degree of rigor is applied to what is presented. If it is not it is meaningless. We have all seen the hundreds of daily articles gen'd up for our consumption. Rather than argue whether a headline or the OP is making a statement, it would be helpful to be more clear if the OP agrees with an article or what aspects they do or do not. Just a thought. I personally would also appreciate links being identified so I can determine whether to click or not. Frankly it looks like an interesting ETF, but does it have less risk? It sounds like Anitya has on the ground experience - thoughts? Full disclosure - I will not buy it as I can already tell I don't understand it (exiting and all of that), but it is instructive to know how it might compare to SCHD. I wear several hats. I make generic comments, specific comments, and personal ones. Examples: 1) I think that PRWCX is the best allocation fund for years. Should I never discuss any other fund? 2) SCHD is my best idea for someone who want s to hold for years, and wants higher income without sacrificing performance. 3) Months ago, I posted that I also like commodities, this one was a specific option trade...if you like to invest based on market. 4) For about 10 years, I posted that I prefer US LC mostly growth and what I held. 5) My own portfolio is based on good risk/reward funds + playing momo. 6) So, what is CDC? Interesting idea. Earlier this year, HDV+CDC momo was better than SPY, HDV was better. SCHD has a much better history. Should I use HDV? That depends on who you are. IMO, most of these ideas (funds/ETFs with build in changing AA) don't work well. Another one is CTFAX The above isn't a secret, most know this, and everybody should do their own due diligence before trading anything. Looking below and HDV was the best for one year and the only one who made money, and CDC the best for 3 years. I was always obsessed with risk-adjusted performance, because it works. BTW, CDC+PQTIX was a better option than SCHD+PQTIX FOR 3 YEARS( link), hindsight 20/20 is great. SCHD worked great in lower risk volatility markets, are the next several years would be the same as 2010-2018 or more like 2018-now? I believe Sara's and Norbert's point is that your OP seems to suggest that you endorse CDC as a fund with less risk. Then, when somebody opines that they disagree, you claim that you never said anything like that. Simple, just make clear in your OP whether you agree/disagree.
For myself, I disagree with the CDC strategy, i.e. fixed selling/buying points based on previous highs. I actually played around myself with something like that over 10 years ago. Problem is that equities are too volatile and you get whiplash.
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Post by ECE Prof on Oct 4, 2022 19:50:36 GMT
I read this post even before I bought SCHD and SPYD (new) yesterday. I do not want to pay for their active management and like SCHD. Not only that, but I will take my chances with known devils than taking a chance with the unknown angels of FD. My Quicken shows that I will be minting money with big dividends.
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Post by FD1000 on Oct 5, 2022 3:24:45 GMT
I believe Sara's and Norbert's point is that your OP seems to suggest that you endorse CDC as a fund with less risk. Then, when somebody opines that they disagree, you claim that you never said anything like that. Simple, just make clear in your OP whether you agree/disagree.
For myself, I disagree with the CDC strategy, i.e. fixed selling/buying points based on previous highs. I actually played around myself with something like that over 10 years ago. Problem is that equities are too volatile and you get whiplash.
I know exactly what Norbert tried to do, nothing new, he has been doing for over 10 years since M*. First he claimed I that I don't know what's the difference between risk to SD, then many posts that I can't achieve better risk-adjusted performance, and I did. Then it got worse. It is not going to end, but who cares. You are not naive either, you are looking at every sentence and play gotcha too. You are not the first or last. Here are some facts: 1) CDC had better risk-adjusted performance than SPY and SCHD in the last 3 years. See PV( link). CDC had better performance+lower SD+higher Sharpe. Sure, if you go years back, it's different. 2) Same with PQTIX. The last 3 years it did great. For 5 years, 2015-19, it made NOTHING, it was terrible. I don't have a problem saying that PQTIX is a good idea in the last 3 years. Norbert has never said I had any good idea about investing, even after I posted accurately about the last 2 meltdowns (03/2020+YTD). How many did, including the "experts"? That's the difference. Life goes on.
So, SCHD+PQTIX is a better idea than just CDC, but it's a different one. CDC+PQTIX is better than that in the last 3 years. 3) In my world, I care how to make money with losing the least since retirement. What happen years ago, even a year ago, doesn't matter to me as much. Others have different style. What will be the future? I don't know. The usual, I invest based on market condition lately. That's my "secret" sauce 4) None of these funds can do what I want to do. History is a proof of that. I never lost more than 1% from any last top in the last 5 years. In my first 17 years of investing I didn't sell to MM, I switched and stayed invested 100%. That was according to my age and risk tolerance. 5) I can easily prove that not everything You or others have said mean they endorsement it. My case is stronger, I post opinions about a lot of stuff: funds, investing styles, retirement, more. Does it mean, every post is my best idea in general or this is what I would do? It's ridiculous. For years, I ran threads about different subjects, I mentioned funds, trades, opinions. It wasn't enough, I had to add a disclaimer: do your own due diligence. Nobody else needed to do that, but only I suppose to do that. 6) At least I give you an opinion based on research I have done in most cases, most never do. Here is the bottom line: these sites are entrainment, nobody ever paid me a dime and I helped hundreds over the years, from simple questions to a complete portfolio analysis, to how I do things. I used to post a lot more what I do, now you get crumbs, sometimes more.
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Post by anitya on Oct 5, 2022 3:41:42 GMT
If anybody cares, just an FYI - I have been experimentally trading CDC for sometime. It inexplicably went to 75% cash in July and did not get back to 100% stocks until Aug 2 and missed the July market bounce. But it chose to ride the market down all the way from August 15 peak, and in the last one week, it started losing more than SPY when value and midcap under-performed. Because this is an active fund, I follow this fund way more closely to avoid whipsaws than I follow SPY. Going to cash at the wrong time can hurt performance but I guess it can avoid catastrophic losses when done right. I still have not figured out how this fund avoids cap gain distributions from high portfolio turnover (especially going to high cash sporadically) and so to avoid distribution surprises, I use it in IRAs only. The hope is may be one day I get comfortable to make this a significant holding not needing to watch it. I checked its portfolio today (October 2, 2022) and it is now holding 51% cash from less than 1% cash on Friday (checked over the weekend). I am fairly certain it did not raise its cash levels yesterday because it fully participated in yesterday's market gain but it participated only half today (1.4%). In July it went to 75% cash and now it has gone to 50% cash. For more details see the index methodology at the link below, specifically page 6. Understanding this methodology also gives an insight as to why the fund went to 100% equities on August 2, 2022. indexes.nasdaqomx.com/docs/methodology_Nasdaq_Victory.pdfThe fund equity portfolio is rebalanced once every six months (3rd Friday of Sept and March based on prior month end stats). Whether to change its cash balance is determined at the end of every calendar month (based on month end price relative to all time high price of the fund (index)). It appears an exit or an increase in equity exposure is implemented after the Close of the first trading day (or beginning of the second trading day) of the following month. Once an exit out of some equity exposure is implemented, another exit can not be implemented unless the strategy is already at 100% equity. In other words, a reduction to ((never 0%) 25%, 50% or 75%) equity can only occur from 100% equity exposure. As of Sept 30, the index was below 16% of its all time high (actually it was below 20%), so the fund went to 50% cash. The fund will stay at 50% cash until the index rises to below 8% of its all time high at a future month end date, at which point the fund will go from 50% cash to zero cash. Let us assume it only rises to 8.5% below its all time high as of end of October, then the fund stays in 50% cash for November as well. One can see why it is not unreasonable to think this fund could under perform coming out of a market bottom, as can be seen from 2018 and 2020 market bottoms. I think a lot depends on the time when the market bottom occurs (relative to month end), its equity %age exposure at that time, its portfolio composition (defensive vs aggressive), etc. If the fund drops more than 24% below its all time high as of a month end (irrespective of its then equity / cash exposure), it would go to 25% cash and 75% equity exposure. If it drops 32% or more, equity exposure goes to (or maintains) 100%. (So, all measurements for reinvestment in equity or for exit from equity are based on month-end values of the Reference Index and any exits or reinvestment is implemented effective for the second day of the following month.) I am sure I am not capturing all the nuances (e.g., price vs total returns); please read the document linked above. Edit: I edited the above to increase readability and while I was at it, I added more explanation. This post was created to provide more color on my decision stated in the previous post. It spent a lot of time to create this post but thought it might be useful to readers.
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Post by mnfish on Oct 5, 2022 10:26:04 GMT
FD - "History is a proof of that. I never lost more than 1% from any last top in the last 5 years"
If you lost 1% - 3 times in 5 years and then made 6% (your goal) each time after getting back in, you'd end up with a 9% gain.
Many who stayed invested (and reinvested) did a lot better than that in the last 5 years. Personally, my accounts are up 24% since 2017 and that's after spending about 5% per year.
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Post by FD1000 on Oct 5, 2022 16:30:47 GMT
FD - "History is a proof of that. I never lost more than 1% from any last top in the last 5 years" If you lost 1% - 3 times in 5 years and then made 6% (your goal) each time after getting back in, you'd end up with a 9% gain. Many who stayed invested (and reinvested) did a lot better than that in the last 5 years. Personally, my accounts are up 24% since 2017 and that's after spending about 5% per year. Seriously? The 6% is just a min, there is no max. The other goal was to beat VWIAX which I did easily, and all with 10/90 risk/bond OEF. But, guess what? I beat the SP500(which isn't my goal) as of yesterday (and in the last a few weeks) for 1-3-5 years too with SD=2.5. SP500 had SD=19+ in the last 3 years. The SP500 will easily beat my portfolio after a recovery or after several more % up for 3-5 years. I attached below my portfolio returns + SD as of yesterday. Attachments:
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Post by FD1000 on Oct 5, 2022 20:17:30 GMT
anitya, Well, you are correct, I don't start these gotcha posts. I'm just responding to most of these, per my decision. I don't mind deleting my post, after the previous post will be deleted. It's not the first or last time my threads were taken off track. ================== I found another article( link) prior to the OP. quote: "Many readers like to compare CDC with the Schwab U.S. Dividend Equity ETF (SCHD). I think of them as good compliments. SCHD overweights Technology and Industrials, while CDC picks up the slack on Utilities. There's usually about a 25% overlap in weight between the two, so it's a good use of capital if you're looking to corner the high-dividend U.S. equity market." ================ You can also see the AA as of today( link). Top 10 Holdings (As of 10/05/2022) Holding Name Portfolio (%) CASH AND CASH EQUIVALENTS 49.99
BRISTOL-MYERS SQUIBB CO. 0.85 MERCK & CO INC. 0.82 AMGEN INC. 0.77 GILEAD SCIENCES INC. 0.76 DUKE ENERGY CORP. 0.75
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Post by anitya on Oct 5, 2022 22:55:02 GMT
It would be great to get forum’s opinion on DSTL vs SPY for a taxable account. My portfolio is already growth / tech biased. (I will increase my SCHD holding in tax deferred accounts.)
P.S.: I tend not to read Seeking Alpha articles, though they may provide additional information not available at the fund website. However, I will accept any excerpts you include from those articles and am hoping you will not cherry pick information from those articles. Thanks.
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Post by habsui on Oct 5, 2022 23:01:28 GMT
If anybody cares, just an FYI - I have been experimentally trading CDC for sometime. It is a good fund. It inexplicably went to 75% cash in July and did not get back to 100% stocks until Aug 2 and missed the July market bounce. But it chose to ride the market down all the way from August 15 peak, and in the last one week, it started losing more than SPY when value and midcap under-performed. Because this is an active fund, I follow this fund way more closely to avoid whipsaws than I follow SPY. Going to cash at the wrong time can hurt performance but I guess it can avoid catastrophic losses when done right. I still have not figured out how this fund avoids cap gain distributions from high portfolio turnover (especially going to high cash sporadically) and so to avoid distribution surprises, I use it in IRAs only. The hope is may be one day I get comfortable to make this a significant holding not needing to watch it. I checked its portfolio today (October 2, 2022) and it is now holding 51% cash from less than 1% cash on Friday (checked over the weekend). I am fairly certain it did not raise its cash levels yesterday because it fully participated in yesterday's market gain but it participated only half today (1.4%). In July it went to 75% and now it has gone to 50% cash. For more details see the index methodology at the link below, specifically page 6. Understanding this methodology also gives an insight as to why the fund went 100% equities on August 2, 2022. indexes.nasdaqomx.com/docs/methodology_Nasdaq_Victory.pdfThe fund equity portfolio is rebalanced once every six months and whether to change its cash balance is determined at the end of every calendar month (based on month end price relative to all time high price of the fund (index)). It appears an exist or an increase in equity exposure is implemented after the Close of the first trading day (or beginning of the second trading day) of the following month. Once an exit out of equity exposure is implemented, another exit can not be implemented unless the strategy is already at 100% equity. In other words, a reduction to ((never 0%) 25%, 50% or 75%) equity can only occur from 100% equity exposure. As of Sept 30, the index was below 16% of its all time high (actually it was below 20%), so the fund went to 50% cash. The fund will stay at 50% cash until the index rises to below 8% of its all time high at a future month end, at which point the fund will go from 50% cash to zero cash. Let us assume it only rises to 8.5% as of end of October, then the fund stays in 50% cash for November as well. I am sure I am not capturing some nuances (e.g., price vs total returns); please read the document linked above. If I follow this correctly, CDC moved about 50% to cash on Monday? So it missed Tue. This is my concern with a rigid strategy that it misses sharp short term moves. But we'll see..
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Post by habsui on Oct 7, 2022 20:23:06 GMT
I established a position in PQTIX a few months ago. It's doing its job (for me) so far..
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