Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

[Jim Nickerson]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Here is my "cash" : http://finance.yahoo.com/q/bc?s=PRPFX&t=5y

Gold .................................................. ... 20%
Silver .................................................. ... 5%
Swiss Franc Assets (bonds) ....................... 10%
U.S. and Foreign Real Estate and
Natural Resource Stocks ............................ 15%
Aggressive Growth Stocks .......................... 15%
U.S. Treasury Bills, Bonds
and Other Dollar Assets ............................... 35%

They rebalance this mix through the year to keep the same ratios.

Note the steady performance through the recent Ka-Poom cycle starting from the year 2000. This fund consistently beats all the other funds in the same category, at least, over the last 5 years: http://biz.yahoo.com/p/tops/ca.html

m.

medved,

I looked at schwab for data on this fund, and for 10yrs, the annual gain was over 8.75%, Nothing wrong with that from my perspective in that I just figured my 10-year compounded gain and it was 1.5%. However in looking at a 10-year chart, if the data are correct, the fund did not do that well during the run-up from 1997-2000 (and had I owned it then I would have been sorely disappointed to have been missing out on all the "fun" of riding a bubble up). Schwab's rating system, which may be the same as Morningstar, rates the fund as a "high risk" fund. Whether that is correct or not, I can't argue, but if it is correct, then I would question whether or not the fund could be correctly considered as "cash." right now.

[medved]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

medved,

I looked at schwab for data on this fund, and for 10yrs, the annual gain was over 8.75%, Nothing wrong with that from my perspective in that I just figured my 10-year compounded gain and it was 1.5%. However in looking at a 10-year chart, if the data are correct, the fund did not do that well during the run-up from 1997-2000 .

Absolutely, but neither did the "real" cash.

Schwab's rating system, which may be the same as Morningstar, rates the fund as a "high risk" fund. Whether that is correct or not, I can't argue,

I can, and it is wrong. I doubt, Schwab and Morningstar take into account the currency risk, and it is the currency risk that affects any cash.

but if it is correct, then I would question whether or not the fund could be correctly considered as "cash." right now.

Short-term this fund is more volatile, than cash (again, disregarding the currency risk). Medium-term and long-term it is very safe, safer than dollar cash. Returning to the question of what to do right now, and assuming we expect another Ka part of Ka-Poom, it is very likely to behave the same way it behaved in 2000-2003.

m.

[Jim Nickerson]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

medved,

It will be interesting to watch.