July 2015 - Insightful Investing

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Asset Allocation for 3rd Quarter 2015

Written by Joe on July 25, 2015

We are making a few changes to the asset allocation of our model portfolio by reducing the allocation to TIPS and High Yield Bonds to 3% and increasing the allocation to Short-Term Bonds and Long/Short Bonds to 5%. In addition, the allocation to TIPS and High Yield Bonds should be in funds of the short term variety. Also, since our Dynamic Rebalancing System is calling for returning our allocation to International Bonds to its target, this is a good time to rebalance the entire Fixed Income side of the portfolio, while leaving an overweight to equities.

We are replacing Wasatch Long/Short (FMLSX) with Boston Partners Global Long/Short (BGRSX), replacing Lazard Emerging Markets Equity (LZOEX) with Driehaus Emerging Markets Growth (DREGX) and reducing some of our liquid alternative mutual fund by removing Eagle MLP Strategy (EGLAX) and Arbitrage Event-Driven (AEDFX). On the ETF side of the house we are making wholesale changes to somoe of the liquid alternative ETFs by replacing PowerShares S&P 500 Downside Hedge (PHDG), ProShares RAFI Long/Short (RALS) and Barclays S&P 500 Dynamic Veqtor ETN (VQT) with Credit Suisse Long/Short Equity ETN (CSLS), First Trust Long/Short Equity ETF (FTLS), and First Trust CBOE® S&P 500 VIX®Tail Hedge ETF (VIXH).

If you need more information about which funds to include in these allocations, check our Favorite Mutual Funds list, Favorite ETFs , Model Mutual Fund Portfolios, or Model ETF Portfolios.

ETF Investment Portfolios July 2015

Written by Joe on July 18, 2015

Here are our favorite Exchange Traded Fund – ETF Investment Portfolios for July 2015.

ETF / Fund Name			Allocation	% Return		Allocation

ETF Investing Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Money Market Fund		MM	2%	0.0	0.1	2%
iShares Barclays 1-3 Year Credit Bond	CSJ	STB	8%	0.1	0.7	8%
PIMCO Total Return ETF	BOND	ITB	6%	(2.1)	3.2	6%
iShares Barclays 0-5 Year TIPS Bond	STIP	IPB	8%	0.6	(2.0)	8%
iShares Core Total US Bond Market ETF	AGG	ITB	6%	(1.8)	1.8	6%
SPDR BarCap ST High Yield Bond ETF	SJNK	HYB	3%	0.3	(1.8)	3%
SPDR Barclays International Corporate Bond	IBND	GB	4%	0.9	(16.3)	4%
PowerShares Emerging Markets Sovereign Debt	PCY	EB	3%	(1.2)	(0.3)	3%
PowerShares Nasdaq 100	QQQ	LCG	3%	1.6	15.2	3%
SPDR S&P Dividend	SDY	LCV	3%	(1.9)	4.4	3%
SPDR S&P MidCap 400	MDY	MCC	3%	(1.1)	6.1	3%
WisdomTree MidCap Earnings	EZM	MCC	3%	(1.3)	4.0	3%
iShares Core S&P Small-Cap ETF	IJR	SCC	3%	0.2	6.6	3%
WisdomTree SmallCap Earnings	EES	SCC	3%	0.5	3.6	3%
iShares Russell Microcap Index	IWC	MIC	2%	3.1	8.5	2%
iShares MSCI ACWI ex US Index	ACWX	Intl	4%	0.3	(5.6)	4%
SPDR S&P International Small Cap	GWX	Intl	4%	5.6	(2.1)	4%
iShares MSCI Emerging Mkt Min Vol Index	EEMV	EE	4%	(1.3)	(1.6)	4%
WisdomTree Emerging Mkts Small Cap Div	DGS	EE	2%	(1.1)	(7.1)	2%
iShares Dow Jones US Real Estate	IYR	RE	6%	(9.3)	3.0	6%
First Trust Long/Short Equity ETF	FTLS	L/S	8%	(0.6)	0.0	8%
Morgan Creek Global Tactical AA	GTAA	Hdg	4%	(3.5)	(3.6)	4%
Janus Velocity Volatility Hdgd Lg Cp ETF	SPXH	Hdg	4%	1.2	2.1	4%
Proshares Managed Futures Strategy	FUTS	Com	4%	(2.8)	0.0	4%
Portfolio Return / Value			100%	(0.8)	0.5	100%

ETF and Mutual Fund Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Money Market Fund		MM		0.0	0.1
Baird Short-Term Bond	BSBSX	STB	4%	0.0	0.8	5%
iShares Barclays 3-7 Year Treasury Bond	IEI	IGB	4%	(0.6)	2.3	4%
iShares Barclays 0-5 Year TIPS Bond	STIP	IPB	4%	0.6	(2.0)	3%
Metropolitan West Total Return Bond	MWTRX	ITB	6%	(1.5)	1.7	6%
Wells Fargo Short Term High Yield Bond	STHBX	HYB	4%	0.4	1.5	3%
Dreyfus International Bond	DIBAX	GB	6%	(3.4)	(5.1)	6%
Payden Emerging Markets Bond Adviser	PYEWX	EB	4%	(0.5)	(1.2)	4%
SEIX Floating Rate High Income **	SAMBX	FRB	4%	0.8	1.9	4%
Metropolitan West Unconstrained Bond	MWCRX	AB	4%	(0.1)	1.0	5%
Parnassus Core Equity	PRBLX	LCC	2%	(0.4)	4.5	2%
PowerShares Nasdaq 100	QQQ	LCG	2%	1.6	15.2	2%
SPDR S&P Dividend	SDY	LCV	2%	(1.9)	4.4	2%
WisdomTree MidCap Earnings	EZM	MCC	2%	(1.3)	4.0	2%
Congress Mid Cap Growth	CMIDX	MCG	2%	(0.5)	13.1	2%
WisdomTree MidCap Dividend	DON	MCV	2%	(3.4)	3.8	2%
WisdomTree SmallCap Earnings	EES	SCC	2%	0.5	3.6	2%
iShares S&P SmallCap 600 Growth	IJT	SCG	2%	0.9	9.5	2%
Aston/Silvercrest Small Cap	ASCTX	SCV	2%	(0.8)	4.5	2%
Westcore Micro Cap Opportunity	WTMIX	MIC	2%	0.1	4.2	2%
FMI International	FMIJX	Intl	4%	(2.0)	4.8	4%
Wasatch International Opportunities	WAIOX	Intl	4%	3.2	4.7	4%
Harding Loevner Emerging Markets	HLEMX	EE	2%	0.3	(6.9)	2%
Driehaus Emerging Markets Small Cap	DRESX	EE	2%	3.0	4.8	2%
Harding Loevner Frontier Emerg Mkts	HLMOX	EE	2%	1.3	(11.0)	2%
AMG Managers Real Estate Securities	MRESX	RE	4%	(9.7)	5.6	4%
Third Avenue Real Estate Value	TVRVX	RE	2%	(1.6)	3.7	2%
Invesco Balanced-Risk Allocation**	ABRZX	Hdg	5%	(2.8)	(0.3)	5%
Diamond Hill Long-Short **	DIAMX	L/S	5%	1.0	2.3	5%
Hancock Horizon Quant Long/Short **	HHQAX	L/S	5%	(0.6)	7.0	5%
AQR Managed Futures Strategy	AQMNX	MF	5%	(8.4)	14.8	5%
Portfolio Return / Value			100%	(1.2)	2.9	100%

Easy ETF Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Money Market Fund		MM	2%	0.0	0.1	2%
iShares Barclays 1-3 Year Credit Bond	CSJ	STB	10%	0.1	0.7	10%
iShares Barclays 0-5 Year TIPS Bond	STIP	IPB	8%	0.6	(2.0)	8%
iShares Barclays Intermediate Credit Bond	CIU	ITB	10%	(1.0)	1.2	10%
PowerShares International Corporate Bond	PICB	ITB	10%	0.1	(12.1)	10%
SPDR S&P Dividend	SDY	LC	6%	(1.9)	4.4	6%
PowerShares Nasdaq 100	QQQ	LC	6%	1.6	15.2	6%
WisdomTree MidCap Earnings	EZM	MC	10%	(1.3)	4.0	10%
WisdomTree SmallCap Earnings	EES	SC	8%	0.5	3.6	8%
PowerShares Intl Dividend Achievers	PID	Intl	12%	(0.9)	(8.8)	12%
iShares MSCI Emerging Mkt Min Vol Index	EEMV	EE	6%	(1.3)	(1.6)	6%
iShares Dow Jones US Real Estate	IYR	RE	6%	(9.3)	3.0	6%
Proshares Managed Futures Strategy	FUTS	MF	6%	(2.8)	0.0	6%
Portfolio Return / Value			100%	(1.1)	(0.3)	100%

Mutual Fund Portfolios July 2015

Written by Joe on July 18, 2015

Here are our favorite Mutual Funds Investment Portfolios for July 2015.

Fund Name			Allocation	% Return		Allocation

No Load Mutual Fund Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Money Market Fund		MM	2%	0.0	0.1	2%
Baird Short-Term Bond	BSBSX	STB	4%	0.0	0.8	5%
American Century Short Dur Infl Prot Bond	APOIX	IPB	4%	0.3	(2.0)	3%
Metropolitan West Total Return Bond	MWTRX	ITB	4%	(1.5)	1.7	4%
Wells Fargo Short Term High Yield Bond	STHBX	HYB	4%	0.4	1.5	4%
SEIX Floating Rate High Income **	SAMBX	FRB	4%	0.8	1.9	4%
Dreyfus International Bond	DIBAX	GB	6%	(3.4)	(5.1)	6%
Payden Emerging Markets Bond Adviser	PYEWX	EB	4%	(0.5)	(1.2)	4%
Metropolitan West Unconstrained Bond	MWCRX	UB	4%	(0.1)	1.0	4%
BlackRock Global Long/Short Credit	BGCAX	L/S B	4%	(0.6)	(0.6)	4%
Parnassus Core Equity	PRBLX	LCC	3%	(0.4)	4.5	3%
RidgeWorth Large Cap Value Equity	STVTX	LCV	3%	(0.2)	1.6	3%
Scout Mid Cap	UMBMX	MCC	3%	(2.0)	2.4	3%
Congress Mid Cap Growth	CMIDX	MCG	3%	(0.5)	13.1	3%
Hodges Small Cap	HDPSX	SCG	3%	(0.6)	0.6	3%
Aston/Silvercrest Small Cap	ASCTX	SCV	3%	(0.8)	4.5	3%
Westcore Micro Cap Opportunity	WTMIX	MIC	2%	0.1	4.2	2%
FMI International	FMIJX	Intl	4%	(2.0)	4.8	4%
Wasatch International Opportunities	WAIOX	ISC	4%	3.2	4.7	4%
Harding Loevner Emerging Markets	HLEMX	EE	2%	0.3	(6.9)	2%
Driehaus Emerging Markets Small Cap	DRESX	EE	2%	3.0	4.8	2%
Harding Loevner Frontier Emerg Mkts	HLMOX	EE	2%	1.3	(11.0)	2%
AMG Managers Real Estate Securities	MRESX	RE	4%	(9.7)	5.6	4%
Third Avenue Real Estate Value	TVRVX	RE	2%	(1.6)	3.7	2%
Invesco Balanced-Risk Allocation**	ABRZX	Hdg	4%	(2.8)	(0.3)	4%
Merger Fund	MERFX	Hdg	4%	(0.7)	(0.7)	4%
Diamond Hill Long-Short **	DIAMX	L/S E	4%	1.0	2.3	4%
Hancock Horizon Quant Long/Short **	HHQAX	L/S E	4%	(0.6)	7.0	4%
AQR Managed Futures Strategy	AQMNX	MF	4%	(8.4)	14.8	4%
Portfolio Return / Value			100%	(1.1)	2.0	100%

Fidelity Investments Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Cash Reserves	FDRXX	MM	2%	0.0	0.1	2%
Limited Term Bond	FJRLX	STB	6%	(0.2)	1.0	8%
Intermediate Government	FSTGX	IGB	6%	(0.5)	1.5	6%
Strategic Real Return	FSRRX	IPB	6%	(0.4)	(5.6)	6%
Total Bond	FTBFX	ITB	6%	(1.4)	1.6	6%
High Income	SPHIX	HYB	6%	0.0	(0.4)	4%
Floating Rate High Income	FFRHX	FRB	6%	0.5	1.0	6%
New Markets Income	FNMIX	EMB	6%	1.5	(3.4)	6%
Mega Cap Stock	FTQGX	LCG	12%	0.1	4.2	12%
Low Priced Stock	FLPSX	MCC	10%	2.5	7.1	10%
Small Cap Discovery*	FSCRX	SCC	8%	0.7	5.6	8%
International Growth	FIGFX	Intl	8%	0.7	1.9	8%
International Small Cap	FISMX	ISC	6%	5.4	1.9	6%
Real Estate Income	FRIFX	RE	8%	(2.8)	2.6	8%
Real Estate Investment	FRESX	RE	4%	(9.4)	5.0	4%
Portfolio Return / Value			100%	0.1	2.1	100%

Easy Mutual Fund Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Money Market Fund		MM	2%	(1.1)	0.1	2%
Baird Short-Term Bond	BSBSX	STB	10%	0.0	0.8	10%
American Century Short Dur Infl Prot Bond	APOIX	IPB	6%	0.3	(2.0)	6%
Metropolitan West Total Return Bond	MWTRX	ITB	12%	(1.5)	1.7	12%
Dreyfus International Bond	DIBAX	GB	10%	(3.4)	(5.1)	10%
Parnassus Core Equity	PRBLX	LC	12%	(0.4)	4.5	12%
Congress Mid Cap Growth	CMIDX	MC	12%	(0.5)	13.1	12%
Aston/Silvercrest Small Cap	ASCTX	SC	10%	(0.8)	4.5	10%
FMI International	FMIJX	Intl	12%	(2.0)	4.8	12%
Harding Loevner Emerging Markets	HLEMX	EE	6%	0.3	(6.9)	6%
AMG Managers Real Estate Securities	MRESX	RE	8%	(9.7)	5.6	8%
Portfolio Return / Value			100%	(1.7)	2.8	100%

Fidelity NTF Mutual Fund Portfolio	Ticker	Class	4/1/2015	3 Mo	1 Yr	7/1/2015

Money Market Fund (Cash Reserves)	FDRXX	MM	2%	0.0	4,797	2%
Baird Short-Term Bond	BSBSX	STB	4%	0.0	9,663	4%
Fidelity Intermediate Government Income	FSTGX	IGB	4%	(0.5)	9,667	4%
Fidelity Strategic Real Return	FSRRX	IPB	4%	(0.4)	9,560	4%
Metropolitan West Total Return Bond	MWTRX	ITB	6%	(1.5)	14,364	6%
Wells Fargo Short Term High Yield Bond	STHBX	HYB	4%	0.4	9,844	4%
Eaton Vance Floating Rate	EVBLX	FRB	4%	0.3	9,792	4%
Dreyfus International Bond	DIBAX	GB	4%	(3.4)	9,262	4%
Fidelity New Markets Income	FNMIX	EB	4%	1.5	9,810	4%
BlackRock Global Long/Short Credit	BGCAX	L/S B	4%	(0.6)	9,694	4%
Parnassus Core Equity	PRBLX	LCC	2%	(0.4)	4,739	2%
Fidelity Focused Stock	FTQGX	LCG	2%	0.1	5,031	2%
RidgeWorth Large Cap Value Equity	STVTX	LCV	2%	(0.2)	4,697	2%
Scout Mid Cap	UMBMX	MCC	2%	(2.0)	4,979	2%
Baird MidCap Inv	BMDSX	MCG	2%	(0.4)	4,985	2%
Fidelity Low-Priced Stock	FLPSX	MCV	2%	2.5	5,003	2%
Fidelity Small Cap Discovery *	FSCRX	SCC	2%	0.7	4,923	2%
Rice Hall James Small Cap	RHJMX	SCG	2%	3.9	5,303	2%
Aston/Silvercrest Small Cap	ASCTX	SCV	2%	(0.8)	4,961	2%
Westcore Micro Cap Opportunity	WTMIX	MIC	2%	0.1	4,870	2%
Fidelity International Growth	FIGFX	Intl	6%	0.7	15,428	6%
Wasatch International Opportunities	WAIOX	Intl	4%	3.2	10,415	4%
Harding Loevner Emerging Markets	HLEMX	EE	2%	0.3	4,878	2%
Driehaus Emerging Markets Small Cap	DRESX	EE	2%	3.0	5,148	2%
Harding Loevner Frontier Emerg Mkts	HLMOX	EE	2%	1.3	4,711	2%
Fidelity Real Estate Income	FRIFX	RE	4%	(2.8)	9,568	4%
Third Avenue Real Estate Value	TVRVX	RE	4%	(1.6)	9,724	4%
Grant Park Multi Alternative Strategies	GPANX	Hdg	4%	(3.1)	9,427	4%
Boston Partners Global Long/Short	BGRSX	L/S E	6%	4.0	14,714	6%
AQR Managed Futures Strategy	AQMNX	MF	6%	(8.4)	14,306	6%
Portfolio Return / Value			100%	(0.4)	244,262	100%

* Funds Closed to New Investors. If you do not already own this fund, you may choose another fund in the same category for your portfolio.
** Loaded funds that are available from some brokers, usually Schwab and sometimes Fidelity, without a load fee.

Mutual Fund, ETF, and Financial Markets Update July 2015

Written by Joe on July 18, 2015

Volatility kicked up a notch in the second quarter of 2015 thanks to concerns about the economy of China, and possible defaults in Greece and Puerto Rico. The result was not good news for stocks or bonds. June’s losses essentially wiped out gains earlier in the quarter in the stock market which finished slightly above the flat line with a gain of 0.1%. The expectation that the FED will finally raise interest rates this year took bonds down (1.7%) for the quarter. Rising rates were also a significant factor in the big loss for Real Estate in the form of REITS which fell (10.0%) over the last three months. Aided by a falling US Dollar, oil rebounded for major gains and international stocks and bonds held on to positive returns this quarter. Small Cap growth stocks added 2.0% this quarter while Mid Cap value stocks went in the opposite direction falling (2.0%) over the last three months.

Investment Returns as of June 2015

It was an unusual quarter for financial markets as the uncertainty did not result in the typical flight to quality. Instead interest rates rose, which caused a fall of (9.6%) by iShares Barclays 20+ Year Treasury Bond (TLT). While rising rates often help the US dollar, you could not tell that from PowerShares DB US Dollar Index Bullish (UUP), which fell (3.4%). Smaller continued to be better as iShares Russell Microcap Index (IWC) picked up 3.1% while Large Cap ETF PowerShares Nasdaq 100 (QQQ) gained 1.6%. Given those two returns it is surprising that SPDR S&P MidCap 400 (MDY) actually lost (1.1%).

iShares MSCI Brazil Index (EWZ) turned out to be our best performing country ETF with a gain of 6.4% while iShares MSCI Malaysia Index (EWM) was the one to avoid as it lost (7.7%). Commodities turned up in June with PowerShares DB Agriculture (DBA) picking up 5.5% while SPDR S&P Biotech (XBI) was the top sector with a gain of 12.0%. On the other end of the spectrum, iShares FTSE NAREIT Real Estate 50 (FTY) lost (9.7%).

The fall in the US Dollar hurt international funds that are hedging against the dollar like PIMCO Foreign Bond (USD-Hedged) (PFODX) which lost (4.1%). On the other hand, that help unhedged funds like Fidelity New Markets Income (FNMIX) which picked up 1.5%. Some of our better domestic equity mutual funds were Rice Hall James Small Cap (RHJMX) which added 3.9%, Fidelity Low-Priced Stock (FLPSX) which gained 2.5% and Fidelity Focused Stock (FTQGX) which returned 0.1%. The falling dollar was good news for investors in

International stocks as Fidelity International Growth (FIGFX) added 0.7%, Wasatch International Opportunities (WAIOX) returned 3.2% and Driehaus Emerging Markets Small Cap (DRESX) grew by 3.0%. International Real Estate took a much smaller hit than domestic REITs as Third Avenue Real Estate Value (TVRVX) lost only (1.5%). In the alternatives space Boston Partners Global Long/Short (BGRSX) gained 4.0% while Aspen Managed Futures Strategy (MFBPX) gave back less of its 2014 gains than most Managed Futures funds with a drop of (5.2%).

Our Favorite Mutual Funds, Favorite ETFs, Mutual Fund Portfolios, ETF Investment Portfolios,, and Favorite Fidelity Funds have been updated through June 2015.