Blue Chip “Mirroring Funds”
Most mutual funds are simply a bad buy. You’re paying institutional investors a fee each month to manage your account, and it’s been proved that the actively traded (vs. index) funds often boast high fees, and low returns. These “mirror” funds are either ETF’s or unique funds that are well managed, with low expense ratios.
SPDR DJ Global TITANS ETF Symbol: DGT
https://www.spdrs.com/product/fund.seam?ticker=DGT
Rationale: This ETF mirrors perfectly and is easy to trade. The SPDR® DJ Global Titans ETF, before expenses, seeks to closely match the returns and characteristics of the Dow Jones Global Titans Index (ticker: DJGTR). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs
Guidance: We began buying 2/29/08 at 48.70, and doubled our purchases on the market bottoms at 6800 at 36.00 for an averaged cost of 40.23. Currently at 58.41, and paying a dividend, we consider DGT a long-term hold. Stop loss at 20% trailing stop loss or PNF stop at 49.00
Third Avenue Value Fund Symbol: TAVFX
http://www.thirdavenuefunds.com/ta/
Rationale: We’ve invested here with Marty Whitman, who we believe equal to Buffet, but as one of the greatest value investors in the world. We usually enter and exit TAVFX with 20 to 25% returns in 6 months, if we time it right, and have returned over 65% annually several times, when value stocks were prime. It’s a core position for any conservative investor.
Guidance: We recommended this position in March, 2009 at 30.00. This is long term hold position, using no stop loss
Zweig Total Return Fund Symbol: ZTR
(also a bond fund)
http://www.etfconnect.com/select/fundpages/other.asp?MFID=3867
Rationale: “The fund seeks high total return over full-market cycles by investing primarily in high quality bonds and to a lesser degree stocks. The fund will normally invest between 50% and 65% of its total assets in the highest quality fixed-income securities and between 25% and 35% in equity securities. Our objective is to participate solidly in rising stock and bond markets and protect the bulk of those gains in declining markets.”
This is a closed end ETF that is currently 10% below Net Asset Value, making it a bargain, and paying a dividend annually of 10.84%. The great stock trader Martin Zweig advises the fund.
Guidance:
This is one of our largest and longest term buys. Paying over a 10.55 yield we originally bought ZTR at 3.00 in January 2003, and doubled our position at 2.50, for an average cost of 2.66. ZTR is a long term buy on any dip, with no stop loss. With such a high dividend it’s best held in an IRA, 401k, or SEP.
