Hi Guys,
That's really an eye-catching title. It is sure to win a wide readership. It did exactly that with me.
Many techniques and schemes exist to beat Index returns. However, overtime, most of them fail. One favorite method is to use market timing signals, but market " timer's Hall of Fame is an empty room." That is a quote from financial author Jane Bryant Quinn. It is an accurate summary of an industry that hasn't deliver on its promises.
If Ted posted this reference earlier I apologize for this repeat. But I just discovered it, and it summarizes much actionable historical data in a few well constructed thoughts. I hope you visit this Link:
https://www.forbes.com/sites/trangho/2017/04/12/how-to-beat-90-of-mutual-fund-managers-in-the-long-run/#211dc2074257
So most active fund managers don't score well when contrasted against their Index targets. That's not a shocking outcome. In fact, given the expenses of doing that task just about guarantees that shortfall conclusion. Indeed, most will and do fail.
A 90% headwind is a tough challenge for me also. I suspect it is equally difficult for most MFOers. The bottom line is that most of us would do better in the investment universe if we simply defaulted into Index products rather than trying to outdistance the Indices. Our failure rates are just much too high in terms of the returns shortfalls and the time we commit to this losing game. Of course, exceptions exist and some of those rare exceptions post here (or are they miscalculating or misrepresenting their results?).
Enjoy the article.
Best Regards

So "Carillon Tower" is part of Raymond James, in other words Scout is now part of a publically-traded financial firm with a pretty sleazy history, much as I appreciate Jeffrey Saut's market commentary.

FYI: In professional sports, players are supremely talented. Yet even all-stars play under coaches. It's the same for your children when it comes to personal finance, including their retirement planning down the road.
Regards,
Ted
http://www.investors.com/etfs-and-funds/retirement/7-steps-toward-financial-literacy-for-your-children/

https://www.sec.gov/Archives/edgar/data/1105128/000168028917000111/20170418scoutfunds497.htm
497 1 20170418scoutfunds497.htm
Scout Investments
Scout International Fund
Scout Emerging Markets Fund
Scout Global Equity Fund
Scout Equity Opportunity Fund
Scout Mid Cap Fund
Scout Small Cap Fund
Scout Low Duration Bond Fund
Scout Core Bond Fund
Scout Core Plus Bond Fund
Scout Unconstrained Bond Fund
(collectively, the "Funds")
Supplement dated April 20, 2017 to the Prospectus dated October 31, 2016, as supplemented
The following supplements the information about the Funds' investment adviser, Scout Investments, Inc. ("Scout"), included in the Prospectus. Scout is a wholly-owned subsidiary of UMB Financial Corporation ("UMB").
On April 20, 2017, UMB announced that it signed a definitive agreement to sell Scout to Carillon Tower Advisers, Inc. (the "Transaction"). The Transaction is subject to certain regulatory approvals, as well as other conditions to closing. In connection with this announcement, the Funds' Board of Trustees will meet to consider various matters related to the Transaction affecting the Funds. The Funds' Prospectus will be further supplemented to announce the Board's determinations.
You should keep this Supplement for future reference. Additional copies of the Prospectus may be obtained free of charge by calling (800) 996-2862.
Scout Investments

I see @Charles's points. Other recent threads or at least posts speak of ETFs that "change stripes" or purport to follow an index no one has ever heard of. The same could be said of DSENX and DLEUX. Are these funds the equivalent of what in my field used to be called "the latest crazy idea from France"? Needless to say, France has declined in more ways than one and it certainly is not generating any new intellectual fervor. Marine Le Pen is a throwback to populist movements that have often shaken France. Will the CAPE/Schiller craze prove to be no more than the latest crazy idea from Wall Street?
As for investments I don't understand, which seem to be the brain children of financial engineering, I'm leery but fascinated. As for genetic engineering, I'm generally OK but my wife bombards me with links to anti-GMO sites and won't allow GMO food in the house. I mention this because I own DSENX even though I can't fathom the managers' methods and I think GMO products improve the world, all the while not understanding the science. What's a humanities guy to do in this world? Go around the neighborhood and buy shares in businesses I like à la Peter Lynch? I can hear the answer already: buy index funds and keep your nutty ideas to yourself (LOL).

Hi @Junkster,
S&P 500:
Jan 1, 1984 166.40
Jan 1, 1983 144.30
Jan 1, 1982 117.30
Jan 1, 1981 133.00
Jan 1, 1980 110.90
I have not dug through old data, but recall the end of August in 1982 as the turn around and the beginning of the upward run in U.S. equity after the beating of the mid-1970's.
An aside note, not directly related and may not be of any value, but the mid range of the boomers in 1992 was about 36 years old finding decent average earning/wage power at the time for perhaps the next 20 years before the slow turn down in earning power. Boomers, of course, have entered into the retirement phase and others entering at a 10,000/day rate, being 4 million/year. The reported birth numbers from 1946-1964 for the U.S. was about 76 million. A question as to whether there is enough money among this group to help support either equity or bond markets to the positive side. We here have read the reports of low savings rates for many boomers; and so there may not be enough power in this group to support any market area(s). The flip side being that the output/withdrawal period is in play, versus the prior period of input/investing. Whose/what money is going to support this withdrawal in order to support equity/bond returns to the positive side going forward???
Bond yield range: The current yields below have remained in this spread range for some time now; being about .6%; and traveling together. I do not recall any breakout in the 30 year to extend the yield above and beyond this .6% spread from the 10 year, for at least the past 6 months to 1 year period. For my non financial background and IMHO; I read this as continued low inflation as well as other twitches and wiggles, which may be related to high equity valuations and the big money (pension funds, foreign central banks, etc.) still maintaining "safe ground" and purchases while Euro area bond yields remain very low.
10 Year 2.25%
30 Year 2.90%
Note: most investment grade bonds lost a small piece of price ground today.
A few late in the day musings.
Take care,
Catch

A good thing to know about a 529 plan owned by a grandparent:

If a 529 plan is owned by a grandparent, a noncustodial parent or anybody else other than the student or a dependent student’s custodial parent, it is not reported as an asset on the FAFSA.

529 ownership matters:
https://edvisors.com/plan-for-college/saving-for-college/529-college-savings-plans/financial-aid/
fastweb.com/financial-aid/articles/how-do-grandparent-owned-529-college-savings-plans-affect-financial-aid-eligibility
Also, here's a EFC (Expected Family Contribution) Calculator:
savingforcollege.com/financial-aid-calculator/

Weirdest interview ever:

Of (writer meant "If") you talk to advisors in the field or experts in technology, experts in the field, they're talking about the latest financial planning software, or the hot new rebalancing product. They're not talking about exponential technologies, which is an entirely different conversation.
So most people are unaware of the field of exponential technologies, and have no knowledge that this ETF exists, or why it’s different from all the others. I think for both of those reasons, it’s not on the radar of many in the industry.

My question as the reader, "What is Exponential Technology?"
Edelman can use the term, but nowhere in the article does he (or the interviewer) define it. Nor does he explain how he filters for ET when he buys companies that have it.
Some how 197 companies appear to have it according to his EFT XT's portfolio. The top ten holdings amount to a mere 6% of the EFT's AUM...not very concentrated.
He personally (I assume Edelmen Financial) holds 75% of the EFT (down from 100% when he created it the ETF). I will assume it has been pedaled quite heavily to his "sheeple" (who I'm sure have heard of it).
I've heard enough, I'll pass.
In XT's short history (2 years) it appears less impressive than "Unexponential Technology" ETF, QQQ:

FYI: Ric Edelman, founder and chairman of Edelman Financial Services, has published eight books. His latest, “The Truth About Your Future: The Money Guide You Need Now, Later, and Much Later,” targets the future of personal finance and what investors need to know for the technological revolution already occurring around us.
Regards,
Ted
http://www.etf.com/sections/features-and-news/edelman-truth-about-your-future?nopaging=1
M* Snapshot XT:
http://www.morningstar.com/etfs/ARCX/XT/quote.html

I'm going to guess from your use of the word "mirroring" that you're looking at the new AlphaClone Mirror Portfolios Wrap Fee Program. You pay 0.196% in wrap fees for a portfolio of $383,333. That's $750. You'll pay $750 for any lesser amount as well. On a larger portfolio, you'll pay $750 plus 0.15% or less (tiered rates) on the extra amount.
That doesn't seem excessive to me. But you need to commit over $1/3M to get these economies of scale. Note that this is just a discretionary account, there's no financial planning included.
There's a clear conflict of interest, as 10% - 40% of the portfolio will include ETFs licensed and (except for one) advised by by AlphaClone. AlphaClone receives 0.95% which it uses to pay the index licensing fees (presumably to itself), to hire a subadviser to run the ETFs, and to retain as profits.
These are passively managed ETFs (per prospectus), but the Mirror Portfolios program says that these ETFs are "utilize[d] ... where appropriate to serve as the 'more active' component within the equity asset class."
So I'd be careful in thinking that the wrap program uses "active investments".
AlphaClone is essentially one person, Mazin Jadallah (the corp says it has just one employee in its form ADV).
While the ETF prospectus lists several ETFs, only two are significant enough to hit M*'s radar. The older one is ALFA, a 2* long/short ETF that has underperformed the S&P 500 from inception (5/31/12) to 12/31/15 (per prospectus) 12.34% to 15.55%. M* reports its three year performance (ending 4/11/17) as 1.83% vs. 11.36% for S&P 500. Its costs include not only the 0.95% management fee, but shorting costs of an additional 2.20% (per M* and per prospectus). According to M*, risk high (runs hot and cold).
The other fund on M*'s website is ALFI. This is a newer ETF. Not much info on this.

If BB faces challenges managing a deep value fund in a risky environment, part of it may be due to his own grandstanding (was there a financial show that Bruce refused to appear on during his heyday...?). Bruce got called out on it during shareholder calls, and his defense was always "...most efficient way to communicate with our shareholders...", which is horse-hooey.
And then we had Bruce "avoid the crowd" Berkowitz's odd (highly odd) management decisions.
He's a smart investor. He ultimately might only be a mediocre fund manager, however.

Ignoring the preconstructed set of platitudes which most of us have now firmly committed to memory, I took notice of Mark's comments, which are always worth consideration. I certainly agree with him, and in fact here are those paragraps which he mentions:
"Retirement is still a relatively new phenomenon. In the past, people pretty much worked until they died. No one has this stuff completely figured out.
You can run through all the calculations and spreadsheets you want but life will inevitably throw you a curve ball or some of your assumptions will prove to be untrue. This is an unfortunate side effect of trying to plan in the face of never-ending uncertainty. In a way, there’s a lot of guessing involved in the process.
This is why financial planning is a process and not an event. You don’t simply set a course of action and follow that exact plan for your remaining days. Financial plans should be open-ended because there will always be corrective actions, updates, changes in strategy, or difficult decisions that have to be made.

It’s like the old saying, “Plans are useless but planning is indispensable.”"
(Emphasis added)

From the article: "In other words, the best bulwark against fake investment news is your own judgment."
Isn't that true for all supposed news whether spoken or written? How do any of us know that Barrons didn't print this because they're running low on 'clicks' at their website?
Truth is I don't know that (insert financial news source here) is any more or less reliable than any other. Ultimately I am responsible for my decisions and actions. I feel that there exists a huge shortage of that (i.e. personal responsibility) these days and nearly everything from everywhere is subject to suspicion. I would also add that if you made some financial decision based on one article you read from one single source that you deserve whatever fallout is rained upon you.

FYI: (One you can buy WFC and UAL for long-term appreciation , or two you can continue as some MFO Members have, beating their moral chests by criticizing both companies with more negative posts.)
Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that: "The time to buy is when there's blood in the streets."
He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be: "Buy when there's blood in the streets, even if the blood is your own."
Read more: Buy When There's Blood In The Streets http://www.investopedia.com/articles/financial-theory/08/contrarian-investing.asp#ixzz4e2dPzEjy
Follow us: Investopedia on Facebook
Regards,
Ted
http://www.investopedia.com/articles/financial-theory/08/contrarian-investing.asp

Hi Guys,
The tidal wave of mutual fund money storming away from actively managed funds and towards passively managed products certainly is a cause for concern among the actively management contingent.
So is the fact that fund fees are being reduced, that investors are becoming better informed, that the managers themselves are better prepared limiting any potential advantages, that the competition is more uniformly challenging, and that the community is numerically shrinking. Wow, that's formidable headwind!
All these are combining to make active managers perspective's significantly dimmer. But the referenced article is not written in a nasty, non-reversible trend sense. It inspires some hope. It highlights the investment strategies of a few attractive individual investors who use both active and passive components when assembling a portfolio.
I say attractive because the mixed management investment styles of those profiled are very similar to my own investment rules of engagement. It is a battle. And everyone likes to be a part of a group and not an outlier when doing battle or when making investment decisions. There is comfort in not being alone.
Although the active management community is struggling through a tough,abandon ship period, it will not totally disappear. It's needed for price discovery purposes, and because there will always be some folks who will never be satisfied with only earning average market returns. These folks covet superior returns as their guiding goal.
Tom Petruno is an excellent financial writer. I like his work. I have read his measured articles for countless years. He rarely disappoints and always includes data that is easily understood. Good for him; good for us.
Best Wishes

Hi LewisBraham,
Initially I did get access to your submittal and did fully read it. As I said in my original post on this topic, I thought it "is very nice. It is well researched...". And I meant it.
Based on your response to my post, I tried unsuccessfully to reread your article. For reasons unknown to me, the requirements to again gain access have increased.
I simply suggested that the examples that you referenced at least partially owe their success to correct application of Emptional Intelligence rules. Therefore, I provided some "nice" references to that developing field. I thought they might interest some MFOers.
I could be wrong. It surely would not be the first time. But I fail to understand the source of your apparent irritation with my initial post here. You are a hugely successful financial writer. I enjoy your stuff including your opening post on this matter. No criticism was intended!
Best Wishes

Hi Guys,
The referenced article by Lewis Braham is very nice. It is well researched and deals with protecting a portfolio against bad investment decisions. Financial gurus often remark that the best long term investor returns come not from making good decisions, but from avoiding bad investment decisions.
I was able to initially access the Link that Ted provided, but I am currently experiencing difficulties as I try to more carefully read the article. As a substitute, here is a Link to another article that places the same emphasis on not losing decisions rather than winning investment decisions:
https://www.cfainstitute.org/learning/investor/documents/twenty_common_mistakes.pdf
Unlike most of these types of how-not-to articles, it more than doubles the recommendations by advocating 20 corrective rules.
Here's yet another Link that discusses the issues from a slightly different perspective:
http://economictimes.indiatimes.com/wealth/personal-finance-news/globally-investors-make-the-same-human-mistakes-carl-richards-certified-financial-planner/articleshow/57093397.cms
The investment mistakes that are commonly made are similar in a worldwide context.
If you have the endurance, here is one more thoughtful reference that lists investment mistakes:
http://www.bloomsburywealth.co.uk/mistakes-investors-make/
In this instance, the behavioral missteps are distilled down to 5 dominating factors. All these articles focus on mistakes which have the greatest potential impact on end wealth. Although each differ somewhat, they all are fairly similar in their individual assessments of investor's major shortcomings. We're all somewhat imperfect in our decision making, and allow emotional aspects into our investment decision process. That does harm. No great surprise!
Best Wishes

@rforno you asked a why question....because like most articles, this article was sanctioned to put the manager/fund/institution in good light....OR...
maybe it is simply a matter of quid pro quo...
OR...
you get my drift.
I decided some time back I will go GET my news. It's more reliable that way. If someone is GIVING me news, the COB in me suggests is probably horses***. Probably not a good way to go through life, but somehow, guilty until proven innocent is how I chose to read the financial media. They don't have the same rights I would have for society outside finance.
Lastly, what the Barron's writer is thinking is less important. What is more important to understand is that most material does not want YOU to think. Just lap it up. People at MFO, like you, are more discerning.

Remember when he was on the cover of many financial magazines and publications? Now, you can find him on the side of a milk carton at best.