Looking at CGMFX
Its that time of year, where you should be looking at your investment portfolio, assessing your performance, seeing what you did right or wrong and if any part of it needs to be rebalanced.
Its also a good time to assess your tax liability and see if you can (or should) be funding your Roth IRA for last year. Typically, if you’re in the highest tax bracket, you cannot invest in a Roth IRA. It also doesn’t make much sense, since when you retire you might be a lower tax bracket. But in any case, you should be investing in a regular IRA. Up to certain income levels you get a tax credit for these contributions, so its definitely worth more research. You can invest up to April 15th for last year’s contribution.
You might also want to take a look at your life insurance and see if it still meets your needs. You may have had a life event which requires you to modify it.
Since I’m expecting to go to business school in the Fall, I want an evenly balanced portfolio and preferable a no-load Mutual fund with low fees. Typically, you’d chose several funds to balance out your portfolio. I already have a few country-specific ETFs that I’ve short-listed, but I also want a little bit in a fund that’s a bit aggressive and willing to go short if conditions permit.
After some research, I think I’ve found a pretty decent fund which suits my investment mindset. Here’s a snippet from there July 2007 semi-annual report:
CGM Focus Fund held major long positions in the oil service, metals and mining and engineering industries at quarter end. The Fund’s three largest long holdings were Open Joint Stock Company ‘‘Vimpel-Communications’’ ADR, Potash Corporation of Saskatchewan, Inc. and Schlumberger Limited. The Fund was also approximately 8% invested in stocks sold short at June 30 (percentage of total net assets). The short positions were in financial services and regional banks. The three largest short positions were Countrywide Financial Corporation, Indymac Bancorp, Inc. and Fortress Investment Group LLC.
CGMFX returned a whopping 80% in 2007. Except my BHP Billiton, Anglo American and Petro-China shares, most of my portfolio didn’t come anywhere close to these returns. Don’t know if it’ll continue to produce these stellar returns, but so long as Ken Heebner is the fund manager I think it will.
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January 5th, 2008 at 2:08 pm
It’s a great fund based on its risk statistics:
http://finance.yahoo.com/q/rk?s=CGMFX
Still very focused funds have a bigger risk of finally getting something wrong which isn’t reflected in these statistics.
January 6th, 2008 at 11:28 am
Performance has been great for CGMFX. If I choose to see the negative side, then I can cite little higher volatility at 21 and high annual turnover at 333 .. Also little higher expense ratio, but that might be coming from the foreign funds ..
Nidhi
January 6th, 2008 at 10:59 pm
Thanks for visiting my blog. I was inspired to start my own website after reading through yours. I visit your blog regularly and find the articles that you post very informative. Thanks again and keep posting.
April 18th, 2008 at 8:53 am
You seem to be a smart guy, I’m not. Briefly, I am old,57
disabled (work related fall)I collect SSDI and a pension which totals out to $40,000 a year.I can live on it, I am single too.
I end up in a low tax bracket, would it make sense to invest in Canadian Royalty Trusts? I know they are taxed 15%
in Canada. But since I don’t itemize my taxes I can’t get
the tax credit write off. At least that is what I figure.
If you know away to figure if this would be profitable for
me, please let me know.
I chose to ask you because I sense you will have some sort of answer and I don’t know who else to ask.
Thanks, Good luck and update your blog.
April 21st, 2008 at 7:43 pm
Hi Tom,
If I was in your position, I would put a little money every month in to Canroys. You should spend as much time as you can reading the financial reports of different Canroys.
I like ERF, AAV, HTE, PGH & even american companies like TYY.
I do not like to trade in and out of these. I’m holding them for the long term because i think
1. oil is only going up in the long term
2. the dollar is only going down
don’t put all your eggs in one basket. diversify to prevent against a catastrophic loss. For example, i bought pszmf.pk (QSR.UN on the Toronto Stock Exchange) – it owns 500 taco bell and other fast food franchises in Canada. I thought fast food is recession resistant. Unfortunately they hit some snags and the stock dropped 35%. Its crawling back and might probably be make me a profit in the future. I’m just glad I didn’t have all my investments in it!