u/Aeroinvestor

Otherwise pleased with Fidelity, but today I hit a bump in the road. Bought a non-Fidelity mutual fund recently in my IRA, and just learned that it is ineligible for monthly auto w/d (I'm retired). There is no information on Fidelity's website that indicated this restriction. The nice CSR verified such this morning...

Seems to me this should be corrected. Now I have to replace the fund, and with some luck I'll pick an eligible fund this time. Hopefully I won't encounter a frequent trading issue.

For general interest, here's some results of scaling individual funds to maximize CAGR while constrained to 10% worst daily drawdown. I define this as CAGR*.

Behavioral economists understand that for your average investor, losses carry twice the emotional impact of equivalent wins. The pain-to-gain factor is probably greater than 2x for me. I've found MDD to be the best pain indicator, owing to experience that a some point I will bail out on an investment strategy. Typically about 10% MDD is all I can take.

My approach is to dilute the subject fund with a matched amount of a managed futures fund and enough T-bills to satisfy the MDD constraint.

Based on iterative analyses using Testfolio, the highest CAGR* for a growth equity fund was seen with FCNTX. The highest CAGR* for a balanced equity/bond fund was seen with PRWCX. The attached bar graph compares these 2 funds to the S&P 500 (VOO); Classic 60/40 (VOO, BND); GDE (90 VOO, 90 GLDM); and NTSX (90 VOO, 60 GOVT). Backtesting period is Jan. 1987 through Apr. 2026.

Top overall performer was the mix of PRWCX 31%, KMLM 31%, SGOV 38% (rebalanced annually), resulting in CAGR* = 7.36% and MDD =-10.00%, with an Ulcer Index of 2.26. For reference, undiluted PRWCX is 11.02%, -41.80%, 6.37.

https://preview.redd.it/5ey4jghy6r0h1.png?width=1400&format=png&auto=webp&s=87fb269fe4b5afd0e1b349ae4ebf8069c49a873a