(PUB) Investing 2015

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Making Sense of the Market Tumble Continued From Page 3

Former PIMCO manager Mohamed El-Erian says the Fed will wait until December before hiking rates: “The Fed doesn’t want to add to market instability at this time. Lower interest rates and lower oil prices will boost the U.S. economy. This will postpone a September rate hike, but it won’t lead to another round of quantitative easing as some have predicted.

A couple of well-regarded cautious foreign funds showed they still know how to play defense. IVA Worldwide IVWAX lost just 2% in August and First Eagle Overseas SGOVX shed just 3% . The four market-neutral funds in the Morningstar 500 all lost money in August. That’s a little disappointing, though Arbitrage ARBFX at least only lost 0 . 6% . So, if you owned them hoping to lose less in a downturn, you’re probably happy, but if you wanted to actually make a positive return, you may be disappointed. Patience Is Always a Good Strategy In an earlier bear market, I asked John Bogle what his advice would be, and he said: “Don’t just do some- thing, sit there!” That’s about the best strategy for most of us. Sticking to your plan is what matters most. However, if you were to go shopping, I’d suggest you start in the emerging-markets aisle. K

“I would look at emerging-markets currencies and bonds today.”

Highlights From U.S. Fund Performance Selling has hit natural-resources stocks the hardest while health-care stocks have remained in the black. That’s meant that value funds have generally suffered bigger losses than growth funds. Included among the hard-hit value funds are those that have generally held up well in down markets such as Longleaf Partners LLPFX and AMG Yacktman Focused YAFFX . Energy names led Longleaf to a 10% loss in August and a 16% loss for the year to date. AMG Yacktman Focused lost 6% for the month—not far from the market as a whole—but it was in the red to start the month and so was off 11% for the year to date owing to media bets like Twenty-First Century Fox FOX and Viacom VIAB . Sequoia SEQUX shed 5% but is still up 11% on the year thanks to health-care names like Valeant Pharmaceuticals International VRX . Some foreign funds have been particularly impressive given the sell-off across foreign markets. Thornburg International Value TGVAX shed 7% in August but is still up 7% for the year thanks to big winners in Japan such as NT&T and Sony . Fidelity Overseas FOSFX manager Vincent Montemaggiore is up 9% for the year to date at his fund, which has a Morningstar Analyst Rating of Bronze, thanks to European pharma- ceuticals and banks.