January 2014 -- Not the Best of Months for Mutual Funds

All 30 of our funds are underwater for 2014.

     Yes, January 2014 was the worst calendar month we've had in a couple of years. One can say that, but really, it was a WONDERFUL month. It just happened to be a month in which mutual fund prices declined/ were under pressure/ headed south/ went down/ were trimmed/ corrected. (Choose one or more) The Vanguard Total Stock Market index Fund was down 3.1%. Not really such a big deal. We had 16 funds do better and 14 funds do worse.

    Five of our funds: JSVAX, SEQUX, RPMGX, FKINX, and PRWCX lost less than 1% for the month. Janus Contrarian is our YTD leader with a loss of .14%. These funds held up so well either because they are balanced funds with  a large percentage of their assets invested in something other than stocks, or because they held stocks in a few big winners, some up 20-30% or more.

    Bringing up the rear are last years champion Ariel (ARGFX) at #28, FRBSX at #29, and RYSEX losing 5.24% at #30. The Moron reiterates his promise that Royce Special Equity will not be in last place at the end of 2014.

    This is the time of year when the old saying "As goes January so goes the year" is trotted out for the amusement of the clueless public. The Moron considers this "January Indicator" to be possibly even more valuable than the "Superbowl Indicator" as a method to profitably prognosticate the direction of future stock prices.

    Just as the Superbowl Indicator was modified at one point to bring it more in to conformity with market performance, it appears the January Indicator has undergone some tinkering. According to the Mutual Fund/ETF Research Newsletter:

When both a negative result for all of January is combined with a negative first week of the year for stocks, as we had at the beginning of this year, then approximately 73% of the time the result for the entire year was indeed negative.

    At this point the newsletter editor, Tom Madell, makes a preposterous logical leap and states:

In other words, there now appears to be a nearly 3 times greater chance of a negative year than a positive one!

    And yes, that is his exclamation point. Mr. Madell is much smarter than that, and the Moron does expect him to retract that assertion upon cooler-headed reflection.

    BTW, Mr. Madell's interesting and valuable newletter is available for free at funds-newsletter.com

     Should the market indeed go down this year, Mr. Madell still does not "win the game". At this point in time, the statement he made is simply incorrect.

    The Moron continues to have no opinion on this year's direction in the stock market. Or, to be more precise, he feels very strongly both ways. And if he did have an opinion, it would not affect his investment behavior, because he does not believe there is any positive correlation between his opinion of what will happen and what actually will happen.