Q & A: Selections & Timing “To do Upcoming” Portfolio

We’re getting some questions on our portfolio “to do upcoming” dates on pages 5 and 6 in the left side of the portfolio boxes.   The “to do upcoming” are expected changes (buys and sells) that we will make in the portfolios.  For example, there might be a sell XYZ and buy ABC on 12/10, even though the letter went out on 12/3.


Q: Why are you preannouncing trade dates?

A: We began doing this to provide members with more planning time.


Q: Are the dates important?

A: The buy and sell dates are important to track because of short-term redemption charges.  To be clear, there are two kinds of charges.  Funds may have them and brokerages have them.


For funds with redemption charges, we generally try to avoid these.  We do note their redemption duration and amount in the Newsletter.  This is subject to change.


For brokerage firms, they do have holding periods to avoid short-term redemption charges.  Unless otherwise noted, Fidelity requires a 60 day hold.  Schwab, ETrade, Scottrade require 90 days.  TD Ameritrade is 180 days.


The fund testing we did assumed at least a 3 month (90 day) hold.


So, we are tracking these buy and sell dates and assume you do the same for your funds.  Ideally, top-rated funds remain top-rated, but with increased volatility, the top funds will change more frequently.


Q: Will you always make the trades as of the “to do upcoming” date?

A: The “to do upcoming” is based on buying and selling the top funds.  So, generally speaking the answer is yes.  We want to own the leaders and avoid the laggards based on C.  With “timing” internal to the selection process, we will see whether or not it is time to increase or decrease cash using money market funds.  We still employ outside timing, so there may be infrequent times that these “to do upcoming” trades are voided.  We will let you know via Hotline updates in either event.


The main purpose of the dates, the “to do upcoming”, and ranking is to provide members with more tools to help you manage your portfolio. 

Stephen L. McKee