As I was reading Barron's I saw a banner ad for the Credit Suisse Merger Arb Liquid Index ETN (CSMA). I wrote about this somewhat favorably (other than the ETN structure) for theStreet.com when it first came out so I was curious to see how it had done versus a couple of contemporaries.The chart compares CSMA in blue to the long tenured Merger Fund (MERFX) in yellow and the Index IQ Merger Arbitrage ETF (MNA) in red. I grabbed the chart from Morningstar because it accounts for the dividends in the chart but not so with MERFX in this chart. Smoothing out the dividend would have MERFX having a smoother ride to the same result. MNA has been a noticeable laggard.
I believe the lag in MNA is attributable to the fact that it does not short the acquirer it instead shorts broad indexes (either ETFs or futures contracts) in the belief it can capture the effect. The chart goes back to CSMA's inception which may not be enough time but MNA has also lagged MERFX going back to MNA's inception. The democratization of the strategy via retail products is a good thing but it makes sense to give funds that are not plain vanilla, like these, a little time to show what they might do. I expressed a little skepticism about MNA in the TSCM article linked above but should have stressed it a little more.
With the market up 100% from the March 2009 low and everyone feelin' groovy these funds are getting less attention than they probably should at this point in the cycle.
On a different note I stumbled across this link titled Live Every Baseball Fan's Dream Job. Major league baseball is going to hire someone to watch every game for the entire 2011 season, blog about it and do some other things like media appearances.Basically someone will get paid for watching baseball. While it sounds fun it does not sound easy but I think it speaks to a point I make repeatedly about post retirement careers (or pre retirement careers) and find something you love to do, would do for free and figuring out how to get paid for it.
To this point I got an email, somehow related to my role with the fire department, with results for some sort of fishing competition down south somewhere. Top ten results were posted for two different competitions and of the 20 names posted, 15 of them won more than $2500. The big winner was awarded $32,000. How far do you think $2500 goes for someone with a modest lifestyle? I'm sure there are expenses incurred with this but you get the point.
The only limit here is imagination. I promise you that whatever it is you most like to do in your leisure time, someone has figured out how to make some sort of living at it. Perhaps not a lucrative living, that might be unrealistic, but someone with a modest lifestyle can relieve a decent chunk of their portfolio's burden implementing something like this not to mention the health benefits of staying actively engaged.
6 comments:
RR, sure you have already seen this, but it is well worth spending some time on the comments:
Retiring Boomers Find 401(k) Plans Fall Short.
my takeaway:
1. why should anyone need 85% of pre-retirement income to fund a normal post-retirement life?
2. live below your means, not a new story here.
3. lots of people are just nuts.
happy reading!
actually i had not seen that article yet so thank you.
instead of pre retirement income i might say pre retirement expenses however there are circumstances where expenses do go up.
John naively said:
"1. why should anyone need 85% of pre-retirement income to fund a normal post-retirement life?"
Well John, here is one reason..
My wife and I have to purchase our own private healthcare insurance and even with a high deductible policy our annual healthcare expenses are 10-20X what they were when we were working and we're both quite healthy.
Blanket statements about retirement are almost never correct because most everyone's situation is different and usually unique.
retired,
I was thinking in terms of my own circumstances, which would seem to put me in the same boat many of those commenting on the WSJ article find themselves in.
In a few years we will have paid off the mortgage, put 3 kids thru college and, in retirement, be free to move from a high cost / high tax state to a low cost / low tax state. So, from that perspective, I could foresee living comfortably on much less that 85% of current income (or expenses), unforeseen circumstances aside.
You are correct that "Blanket statements about retirement are almost never correct" (I would drop the 'almost'). I guess I could have phrased point 1 better, please don't take offense.
John, no offense meant or taken.
We did something very similar to what you are saying. Moved from high cost/high tax Upstate NY to Central Arizona (near Roger, of course) and retired with no debt.
Still, in the 11 years since my wife and I self -retired (ie..we quit our Corporate jobs and let them keep their healthcare and most of our pensions) costs have steadily marched upward, especially medical costs.
Still, we're not complaining...it was a "quality of life" decision, if not the best financial decision, to retire young and enjoy it. We're still enjoying it.
Great new Rolling Stones article
"Why is wall street not in jail?"
Really is amazing how America is no longer a democracy nor follows the rule of law.
Great comparison to when the U.S.S.R collapsed and the oligarchs took over...I was there and is eriley the same in many ways
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