Ready-made funds: Questions for Mark Simenstad, vice president of fixed income investments

Q: What is your job as head of fixed income mutual fund investments at Thrivent Financial for Lutherans?

A: I oversee the management of all of Thrivent Investment Management’s fixed income mutual funds and separate accounts, including the management of high yield assets in Thrivent Financial’s general account. I also have responsibility for Thrivent Investment Management’s bond research and fixed income trading departments.

Q: Recently, Thrivent Investment Management began offering “ready-made” asset allocation mutual funds. What is the philosophy behind these funds?

A: When investors work with their Thrivent Financial representative to determine their overall risk temperament, they can select a Thrivent Asset Allocation Fund to match. That fund, diversified across both the fixed income and equity markets, will continue to be automatically reallocated on a quarterly basis by the Thrivent Investment Strategy Committee, of which I am a part. Think of it as “one-stop” asset allocation. These funds invest established percentages of an investor’s portfolio across a range of asset classes to provide instant diversification and competitive risk-adjusted returns.

Q: What sort of investor is best suited for this type of mutual fund?

A: These funds may be well suited for an investor who wants a simplified investment solution, yet still needs the benefits of diversification and professional, institutional-quality money management.

Q: How can an automatically reallocating mutual fund benefit an investor?

A: As markets ebb and flow, it’s important to take advantage of asset classes that may have declined in value, while paring positions in areas that may have done well. The Thrivent Asset Allocation Funds provide this service because the funds are constantly monitored and reallocated, or “tweaked,” to take advantage of changing market conditions and to keep the portfolios in line with their stated asset allocation targets. Individuals often don’t have the time or inclination to keep up with these market changes, much less find the time to do something about it.

Q: Is it true that what’s bad for the equity markets is often good for bonds? Why?

A: That certainly can be the case at times in the short run when investors respond to economic concerns or falling stock prices by moving to the perceived safety of bonds. However, in the long run, stock and bond prices are more apt to move in a similar fashion in response to long-term perceptions of inflation and the economy.

Q: In a rising interest rate environment like we’re in now, what should investors do with their bond allocations?

A: When rates rise, shorter maturity bond profiles typically perform better than long-term bond portfolios. It’s best for investors to maintain a mix of bond funds, including high-yield, corporate and mortgage-backed bond funds, to maximize returns from bond interest income, while minimizing bond price declines that can come from rising interest rates. Above all else, don’t abandon an allocation to bonds just because interest rates are heading higher. Bonds offer a valuable counterbalance to stocks. Talk to a Thrivent Financial representative for specific help.

Q: Should even young investors have at least some portion of their portfolios allocated to fixed-income funds?

A: Yes, almost always. Young investors are often told to buy stocks over bonds, but a sound approach is to have a portion in bond funds when you are younger for diversification and gradually increase that percentage as you age. The ratio of stocks to bonds depends on an individual’s risk temperament and time horizon.

Q: Turning to the economy, oil costs seem to have settled in at more than $50 barrel. What does this mean long term for fixed-income investors?

A: Two possibilities exist. If higher oil prices prove to be inflationary, as businesses push their higher energy costs on to consumers via higher retail prices, then bond prices may move lower as interest rates move higher. Conversely, if higher oil prices become a drag on the economy, then bond prices will likely be more resilient as interest rates remain at relatively lower levels.

Q: Will recent steep increases in natural gas and heating oil costs have a similar effect?

A: Yes, particularly given how these costs will impact the consumer even more than gasoline prices, as heating costs are expected to be more than 50 percent higher than last season.

Q: Inflation continues to creep upward despite the Fed’s rate tightening. How can investors combat inflation in this environment?

A: First of all, make sure your portfolio is diversified. In the fixed-income market, investors can make an allocation to TIPS (Treasury Inflation Protected Securities). These securities have their principal value adjusted upward by the level of inflation in a given time period. But over the long run, having a diversified mix of bond and equity funds can help minimize the effect inflation might have on your portfolio.

Q: What do you make of longtime Fed Chairman Alan Greenspan’s January 31 retirement and his replacement Ben Bernanke?

A: The choice of Ben Bernanke to replace Alan Greenspan has already been well received by the financial markets. We like this choice as well. Bernanke is widely regarded as a top monetary expert and he has widespread respect from key economic policy makers, including members of the Federal Reserve Board. He is very clear in his views on the importance of keeping inflation in check. This is the primary job of the successful monetary policy, and ultimately for the financial markets.


How To Work Effectively to Stop Mass Immigration



CCN and the other ASAP! Coalition members are fortunate because we have the most convincing and positive reasons for stopping mass immigration.

All members of the ASAP! Coalition advocate U.S. population stabilization. We know how many benefits would be achieved by stabilization. We can talk truthfully about the benefits of population stabilization, including environmental protection, budget relief, reduction of ethnic tensions, reduced costs for schools, hospitals, and other infrastructure, and, not the least, providing the necessary conditions for the long-term sustainability of the U.S.A. at a reasonable standard of living and quality of life.

The fact is that if an organization’s goal is U.S. population stabilization, the most generous immigration position it can unhypocritically advocate is a moratorium on all immigration in excess of 100,000 per year, because this is the highest legal immigration level which would make U.S. population stabilization possible. The rationale for this position is explained in more detail elsewhere in this Series.



Any organization which does not advocate, as a first priority, a moratorium on all legal immigration in excess of 100,000 per year is just kidding around, much to the detriment of those who are sincere. That organization is not really serious about achieving U.S. population stabilization.

Failure to advocate a low, all-inclusive number undercuts our most convincing rationale for a moratorium — that U.S. population stabilization is a necessary, absolutely essential step toward protecting the environment for the long term and achieving a sustainable economy to secure our children’s future.

The most ineffective and counterproductive positions in the immigration reform movement are those which would not lead to stabilization or which undercut those positions that do. Some national immigration “reform” organizations fail to advocate positions which would achieve their ostensible goals. It is thus not surprising that the immigration reduction movement has not had any significant victories for over two decades. Indeed, one national organization does not push any particular numerical limit at all! This undercuts other organizations that try to give activists, and members of Congress, a “rallying point” number that incorporates a rationale for lower numbers.



An elementary principle of successfully lobbying for immigration reduction is that organizations should not take positions on immigration levels which are higher than the numbers which are contained in the bills sponsored by our allies in Congress who support reductions.

If “reform” organizations do take such “higher” positions, they not only undercut the efforts of our Congressional allies, but also eliminate all leverage we would gain by advocating numbers lower than our Congressional supporters’. Incredibly, one national organization is pushing such a higher position.>

Example: The recommendation by one national immigration “reform” organization that we build a coalition of members of Congress to consider the recommendations for legal immigration reduction made by the Jordan Commission is counterproductive. (See below: The Jordan Commission recommended legal immigration of 700,000 annually, whereas the best and most-forward-looking legislation currently before Congress targets 300,000 annually.)

Undercut #1

Late last Summer, one national organization recommended in a fundraising letter that we “build a coalition of members of Congress to at least begin considering the recommendations for legal immigration reduction made by Barbara Jordan’s national bi-partisan commission.”

But the primary recommendation of the Jordan Commission is that the level of legal immigration be 700,000/year/annually. Thus, advocating the Jordan Commission’s number undercuts the pending Tancredo Moratorium Bill (HR 2712) which caps legal immigration at 300,000/year. Pushing for the Jordan Commission’s numbers or similar numbers not only undercuts the numbers in the Moratorium Bill (HR 2712), it undercuts our allies in Congress who co-sponsor it!

Indeed, advocacy of the Jordan Commission’s numbers undercuts the entire tradition of advocacy of much lower numbers by our allies in Congress. Rep. Bob Stump (R-Az), for example, introduced bills in several sessions of Congress in the 1990’s, which would have both enacted a moratorium and capped numbers at a level much lower than the Jordan Commission.

Indeed, while the Commission in general and the heroic Barbara Jordan in particular did admirable work, the political document produced after her death, and the numbers of legal immigrants recommended — about 700,000 per year — even if enacted, are not nearly low enough to ever allow U.S. population to stabilize. From a political perspective, starting with such a relatively high number provides no environmental carrying capacity rationale and no political leverage whatsoever for lower numbers.

Focusing on the Jordan Commission’s recommendations in general would direct attention away from our side’s rationale for much lower numbers: protection of future generations, the economy, and the environment that sustain them.

It should be noted that there were some good recommendations in the Jordan Report — that the INS be split into an “enforcement” division and a “service division,” for example. But unqualified advocacy of the Jordan Commission’s recommendations is counterproductive.

Undercut #2

The currently pending HR 2712 would explicitly “enact a moratorium” on most categories of immigration, and limit the rest. But two national organizations refuse to explicitly push the moratorium that HR 2712 would enact, although one half heartedly says it supports the bill. How can reductionists ever achieve significant reductions unless they communicate the message that the U.S.A. is “full” and we need no more mass immigration. And how can we support those members of Congress who sponsor the “moratorium” explicit in HR 2712 unless we explicitly push a moratorium.

Regardless of how many “professional lobbyists” a “reform” organization has on The Hill, hamstringing them by not allowing them to explicitly push a moratorium negates their effectiveness in obtaining reductions.

Undercut #3

That national organization advocating trying to create a coalition of members of Congress to re-examine the Jordan Commission’s recommendations may not be aware that those Jordan recommendations were discussed by Congress and the Clinton Administration prior to the 1996 bill. Those recommendations incorporated the principle of incremental reductions, and reductions in some categories.

But those immigration “reform” organizations’ path of starting high (as, e.g., with the Jordan Commission’s recommendations) with the hope of achieving incremental reductions or reductions in some categories is a failed path, as has been demonstrated repeatedly for over 20 years. Indeed, one organization pushed a bill which capped the numbers at 780,000 in 1996 — predictably, we got no reductions.

Advocates for reducing immigration who truly want to be effective need to argue for the most persuasive rationale: 100,000 legal immigrants a year for five years followed by 200,000 a year (and a moratorium on all categories above those), because these are the highest numbers that would ever allow the United States’ population to eventually stabilize. Pushing a position which incorporates the failed strategy of 1996 and earlier years undercuts those organizations and the members of Congress who are pushing positions which can succeed, if all organizations get behind them.


Tactical Point #1

Advocating “reforms” or reductions only in certain categories of immigrants without advocating an all-inclusive moratorium is ineffective, because it implicitly grants the opposition’s basic premise: that some substantial level of mass immigration is good. Only the word and concept “moratorium” communicates the message: The U.S.A. is full, we want no more mass immigration.
The opposition must be asked to justify any substantial level of immigration. Advocating a moratorium as our “default position” forces the opposition to justify exceptions to this position. And, while they may be able to justify some immigration (of some law-abiding spouses and minor children of U.S. citizens, for example), they certainly cannot justify mass immigration that drives explosive U.S. population growth with all its negative consequences for national security, the environment, and the economy.

Only if we explicitly advocate an all-inclusive moratorium do we force the opposition to engage in such a basic examination and attempted justification of mass immigration. The only bill in Congress which would result in a substantial reduction in overall numbers is HR 2712 — an all-inclusive explicit “Moratorium” Bill. It is, thus, counterproductive to support any other bill or any position with higher numbers.

Tactical Point #2

Since bills increasing mass immigration may pop up under as-yet-unknown euphemisms, the only way to effectively anticipate and oppose such bills is to advocate an all-encompassing moratorium and only a moratorium. That not only puts pressure on any and all immigration-increasing bills, but also generates pressure for lower numbers at the same time! No other position has all these positives…. A Moratorium Bill anticipates and foils circumvention.

Tactical Point #3

The immigration “reform” movement’s unblemished record of legislative losses over the past two decades can be traced in large part to pushing for reductions using the “category approach.” Merely opposing a specific increase in any particular category, e.g., H-1B visas, asylees, or extended family members, is almost always a strategic, tactical, political, and public relations mistake. Such use of a “category approach” implicitly sends the counterproductive message that the current phenomenon of mass immigration (of over one million legal immigrants per year) is more or less acceptable, because reduction of only a few categories is advocated.

This “category approach” to “reform” plays into the hands of the opposition — the proponents of mass immigration. Trying to reduce individual categories results in the ultimate numbers being the outcome of horse trading, pressure tactics, and intense lobbying by wealthy special interests — areas in which our opposition is skilled, powerful, and well financed.

If the immigration “reform” organization you support fails to explicitly push a moratorium as the first priority, ask them how they can effectively oppose all the different bills (including those with deceptive titles like “regularization,” which would increase immigration) without explicitly supporting an all-inclusive moratorium. And ask them how they expect realistically to achieve any reductions (in light of 20 years of failure to do so) without advocating an all-inclusive moratorium.

Why should any of us support policies which do not work??

Brain Drain Saps Former Soviet Union of Scientists

Proposed congressional budget cuts hint at tough times ahead for American scientists who compete for an ever-shrinking pot of federal dollars to fund their projects. Several visiting scientists at the University of Alaska Fairbanks have already seen the crumbling of national support for science in their home country, and it’s not a pretty sight.

They’re from the former Soviet Union, a society that puts more value on bus drivers than scientists. Scientists at the U.S.S.R Academy of Sciences in Moscow “may earn 750 rubles a month, while a trolleybus driver in Moscow may earn 1,200-1,400 rubles a month,” wrote Leonid V. Ksanfomality, former laboratory chief at the Academy’s Space Research Institute, in 1991. “Both academic and applied sciences now are pushed aside entirely in a society in upheaval, where science and technology seem less relevant than buying bread and meat.”

The change in priorities that followed the democratization of the former Soviet Union chased away many scientists, who took with them their knowledge to solve health, environmental and other problems now plaguing the country. Like many top researchers, Geophysical Institute Research Associate of Atmospheric Sciences Victor Filyushkin was part of the brain drain of scientists who sought better opportunity in another country.

Filyushkin, a whiz in math and physics as a teenager, enrolled at the Moscow Institute of Physics and Technology at age 17. After earning his masters and doctorate degree and working at the Central Aerological Observatory in Moscow, his research was impressive enough to earn him an invitation to work as a visiting scientist at the National Center for Atmospheric Research in Boulder, Colorado, in 1990. From there he went on to the University of Oklahoma, where he helped develop a computer model showing how clouds can affect climate change. This work led him to the Geophysical Institute, where he is supported by funds from the U.S. Department of Energy to study climate change in the Arctic. Filyushkin said scientific research in the United States differs from that in the former Soviet Union in quality; especially computers; and the competitiveness required to secure funding.

“The competition is very tough,” he said. “You know how this country runs—it’s a market system. If you don’t have something to offer, you won’t stay around.”

In the pre-breakup Soviet Union, scientists were assured funds from the government once they worked their way up to a senior position. Research money came primarily from the government, with a large chunk from the military. After the cold war ended in 1989, research funding from the military “practically disappeared,” said Leonid Yurganov, an atmospheric scientist now working temporarily at the Geophysical Institute.

Yurganov, of St. Petersburg, formerly worked in the Arctic and Antarctic Research Institute in St. Petersburg. His research on carbon monoxide levels in the air is funded in part by the International Science Foundation, a $100 million endowment set up by New York billionaire George Soros to pump some life into Soviet science.

When Yurganov’s present grant runs out in August, he’ll write a proposal to get another one. His options are limited back home, where he recently had to moonlight to make ends meet. When he was in St. Petersburg last November, he translated Russian to English for other scientists instead of doing research full-time.

“It’s a depression; a stagnation in the industry,” Yurganov said of science in his homeland. Brain drain symptoms may already be appearing in the former Soviet Union, a country facing serious air, water and soil pollution. Hopefully, those in the U.S. Congress will take note of what can happen when the best and brightest are forced to look elsewhere because of withering national support.