FYI: (Click On Article title At Top Of Google Search)
More investors are losing faith in old-school money managers as financial markets sputter.
Clients yanked $207.3 billion in 2015 from U.S.-based mutual funds that hand pick their positions while pouring $413.8 billion into funds that mimic broad indexes for a fraction of the cost, according to new data from research firm Morningstar Inc.
Regards,
Ted
https://www.google.com/#q=Investors+Snub+Money+Managers+For+Market+Clones

Interesting about JPMorgan, since their chief global strategist and head of global markets was not at all bearish in a conference call last week. I wonder if he know what one of their analysts (the linked article above) is saying? This kind of disconnect is totally odd. As for Edwards, I am surprised he continues to get press. Actually, given the penchant of the financial media to hype anything scary, I am not surprised.

Are not these the same folks who just about had their financial arses kicked, but saved by the British taxpayers and still mostly owned by the British government? Doesn't mean they are not allowed to guess with the best of breed.....

@little5bee: I own it, add periodically during dips, but holding pat right now. Distributions vary, and are declared each quarter, not always the same. Although I consider it a financial , it is heavy into real estate, so for me its like a hybrid between a reit and alternative asset class.

FYI: GUS SAUTER: A couple of weeks ago, I went to the barbershop. As he was cutting my hair, my barber said that he believed the stock market was rigged, he didn’t trust it, and he wouldn’t invest in stocks.
Since I spent more than 25 years encouraging people to save and invest, I was disappointed to hear this expression of distrust of investing. More disconcerting is that many people, and perhaps a majority, feel this way. The financial crisis and a number of one-off fraudulent scoundrels have provided fuel for politicians and the media to attack Wall Street and create this feeling of distrust and even anger toward Wall Street.
Regards,
Ted
http://blogs.wsj.com/experts/2016/01/11/why-investors-need-to-stop-distrusting-wall-street/tab/print/

There are both similarities and differences of faults with hedge funds and open end funds. In one sense, you're right about people tending to pile into some funds based on manager past performance.
People piled into Gundlach's funds, even though they use "exotic financial derivatives like total return swaps". (See below.) IMHO use of exotic derivatives has become more commonplace - they're not limited to hedge funds and a few offbeat mutual funds as the article suggested. Though they're still insignificant if not absent from vanilla funds.
People piled into DoubleLine, into Yacktman, and others based on the managers' long term past performance at substantially identical funds. Not on a short term (3 year) record at a fund that was substantially different. RSIVX by design holds longer term, often illiquid bonds, than RPHYX, as opposed short term bonds ("think 30-90 day maturity").
So ISTM there is a qualitative difference between piling into funds like RSIVX (unproven management for that type of fund) or TFCIX or WBMAX (both with untested strategies for open end funds), and piling into proven management and strategies in the hedge fund arena. Another example of a mismatch between strategies and open end funds - stable value funds. There were (as I recall) over a dozen open end stable value funds attempted. They couldn't handle the open end fund daily redemption requirement.
YACKX also floundered for its first couple of years. It was only in 1994, in a relatively flat market, that it began to shine. Yet people stuck with him. Quoting Yacktman: "My only real fear in 1993 was that people who put their money in during 1992 would take it out at a loss. I didn't want this to happen, because I knew my performance would come back. ... As it turned out, more money came in than went out."
With hedge funds, accredited investors have the responsibility (and supposedly the opportunity) of investigating the offering. These "sophisticated" investors don't get the same disclosures as are required of open end funds. If managers have buried past failures, it's up to the investors to discover that.
The mandated disclosures of open end funds are supposed to make it easier for the other 99%. It is their choice to accept or reject a disclosure that discloses little other than: "just trust us".
DoubleLine funds and total return swaps:
Reuters, Nov 16, 2015: RiverNorth/DoubleLine Strategic Income Fund possesses economic exposure to an aggregate of 1,103,373 shares of Common Stock [of FSC] due to certain cash-settled total return swap agreements."

ThinkAdvisor, Nov 22, 2013“It’s [DSEEX] put together using a total-return swap,” Gundlach said of the fixed-income side of the fund.
Probably other funds; this was a quick search.

From a financial journalist at their hometown Minneapolis Star-Tribune: http://www.startribune.com/minneapolis-hedge-fund-exposes-the-dark-side-of-hedge-funds/364686211/.
While I suspect the writer is being a bit too gentle (he presumably needs continuing access to the principals, so...), he argues that the hedge fund industry is sort of a sham and that Whitebox failed, mostly, because they were trapped by the logic and discipline - if not quite the fees - of their industry.
I'm very sympathetic to the argument that hedge funds should pay off sometime; that is, the failure to capture the extent of a bull market is excusable while the failure to do well in a rising market or a flat market or a falling one pretty much explains why "the smart money" ought to be shifting to muni bonds or some such. The continued economic vitality of the hedge fund world raises serious questions about what they think the word "smart" actually means.
David

Buying opportunity in 2017. Build cash. Now, someone please quote me. If I get fired in the coming downturn, I could at least become a financial ANALyst.

FYI: Some mutual funds are hoarding cash but financial advisors who buy them risk being accused of style drift and market timing.
Regards,
Ted
http://www.thinkadvisor.com/2016/01/08/is-cash-the-best-defense-in-this-troubled-market?t=mutual-funds

For fully invested balanced portfolio it is approximately 20% drop in the stock market, and that is a definition of a bear market.
I believe many investors would prefer not to be 100% invested at that time. That is why I believe it is quite reasonable to think about portfolio protection strategy to avoid such situation.
My question to the board was actually about that, how to increase a cash position in stages if you feel uncomfortably about the market.
Thanks for your reminder that market timing is not an easy thing. Nevertheless, many investors sell partially holdings to limit their loses in declining market. Buy and forget strategy ( with some rebalancing) is not the only option for investors, especially for very experienced and confident ones.
DavidV

We would all like to be less exposed to the market as it is declining, and more exposed as it is rising.
The question is how to accomplish that.
Mark Hulbert, of the Hulbert Financial Digest, has studied the newsletters of the market timers and others, for decades. The market timers have not been successful at market timing. Their records are not good. I don't think a single one of them has beaten a buy and hold strategy over a long period of time.
I do think it is possible to do....there have got to be people who do it very successfully.....but finding them and learning their methods may be difficult.
You can partially sell to decrease your exposure to a market that has been declining, just in time for the market to rise while you are out of it.
You can buy back in to a market that has been rising, just in time for the market to go down.
Marty Zweig used to have a TV commercial for his investment newsletter...............his goal in his newsletter was to be in the market while it was going up and be out while it was going down.
It's a great goal if it can be achieved.
Would love to hear of a successful method of navigating the market like this
Cheers

Another vote for Akre Focus, or just buying BRK-B. As for Fairholme, the SHLD saga probably ends this year, as I don't think Sears as we know it will be around in 2017. Either Berkowitz and Lampert pull a rabbit out of their financial engineering hat or not.

The beta site just popped up for me, when trying to access the regular site. Not sure how long it will be up.
One thing I notice is that they combine the search engine for news long with the quotes. I don't particularly like that. Bond yields, oil price and gold price are no longer on the page. The top of the screen keeps taking up more of my screen's real estate on my tiny 14 inch laptop. Needless to say, I don't like either. Seems to be more clutter and less useful information. Bottomline is that I don't like it. That probably means these changes will be adopted. What is your opinion?
Yahoo Finance is one of my primary "go to" financial sites for news and market data. Anyone else rely on this site?

Maurice,
Try History > Clear Recent History > Clear Now. It should revert.
Mona

"[Inherited funds in IRAs] don't get a basis step-up, but generally, the distributions follow the same rules as they would for the original owner."
Except that they're not subject to an early distribution (10%) tax, spousal IRAs can be transferred to one's own IRA (in which case they follow the heir's IRA rules, not those of the deceased), and you get to take an IRD deduction if estate taxes were paid on the IRA.
https://www.kitces.com/blog/understanding-the-irc-section-691c-income-in-respect-of-a-decedent-ird-deduction-for-the-beneficiary-of-an-inherited-ira/
Possibly other stuff as well - this is off the top of my head. Kitces is very good; otherwise I generally stick with *.gov (e.g. irs.gov), or financial institutions (e.g. schwab.com, fidelity.com, etc.) that have to be accurate.

I have been sitting on $500K in a money market fund for a year after firing my ineffectual financial advisor. I am 86 years old and unmarried with financially independant heirs. I would like to at least gain an amount equivalent to my RMD.
The following is my tentative selection of ETF funds that I am considering investing 25% each: VOO,VIG,PFF,VEA.
I am inviting any carefully considered suggestions or comments. Thank you and a Happy and prosperous New Year to all.

FYI: Tactical asset-allocation funds enjoyed a burst of popularity after the financial crisis. Proponents argued that tactical allocation can be valuable in bear markets or amid heavy volatility given their flexibility. Tactical managers typically eschew investing in a static mix of investments like a manager of a traditional balanced fund would. Instead, they rapidly shift between asset classes, often in following macroeconomic or trend-following strategies.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=734857

Hi Catch22,
Thank you for reading and responding to my post.
I really do believe that forecasting (especially the future according to Yogi Berra) is a terribly uphill slough. But if some error rate is acceptable, it is not an impossible assignment. As Yogi famously said: “When you come to a fork in the road, take it”. And when investing, there are countless uncertain forks in the road.
Study after study have demonstrated the high error rates when making forecasts. The long running CXO Advisory Group study that scored the forecasts of 68 financial professionals just reinforced the high hurdle that most experts stumble against. The CXO guru grades registered only about a 48% accuracy record.
Random successes are often followed by painful failures as the regression-to-the-mean iron law exercises its ultimate influence.
On a much larger scale, Phil Tetlock has organized and measures the accuracy of a large body of carefully selected, screened, and challenged political wiz-kids. These scholarly studies have been conducted over many years and across many iterations. Expert teams have been assembled based on earlier prediction prowess. Forecasting accuracy at the margins has been improved with team effort, but it remains a tough uphill battle. Here is a Link to a relatively recent Tetlock lecture:
https://www.aei.org/events/predicting-the-future-a-lecture-by-philip-tetlock/
Experts can be assembled that tilt the forecasting odds just a little. An informed team of bright folks can make a difference, especially if the team is dedicated and is composed of members with a wide ranging set of experiences and knowledge. The MFO contributors satisfy those criteria.
So, while I surely do not agree with all that is said on this wonderful site, I do learn and profit from the MFO exchanges. After 6 decades of moderately successful investing, I’m not prepared to “leave this game”.
An important lesson that I learned during those many participating years is that setting a satisficing goal is better than shooting for a maximizing goal in terms of anticipated rewards. If you are not familiar with the concept, here is a dictionary definition of 'Satisficing': “A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution”. An optimal portfolio return is a mythical target.
Additionally, I preach and practice portfolio diversification and patience as strong investment tools to embrace. Investing need not be complex.
Stay strong and healthy for 2016. The market challenges are forever present.
Best Wishes.

FYI: (Click On Article Title At Top Of Google Search)
How do you invest when everything is expensive? U.S. stocks are selling at more than 25 times their cyclically adjusted earnings. Bond yields are unusually low (the 10-year U.S. Treasury yields about 2.25%), and interest rates are likely to rise. Money-market funds and savings deposits yield next to nothing. Property markets are also richly valued. There are no “door busters” available in world financial markets.
Regards,
Ted
https://www.google.com/#q=Investing+for+2016+in+an+Expensive+Market

This does describe what I'm seeing - that an extra "income" dividend is paid at the end of the year, and that it doesn't vary by share class (since all the expenses have been paid already out of the usual monthly dividends).
What puzzles me about that M* statement (which likely reflects reality, at least in part), is that I don't see anything in the prospectus about the fund being an ersatz managed payout fund and that I can't get the financials to match.
Specifically, the fund's net investment income per share comes out to less than the total monthly income dividends (per share) paid out, let alone the total income dividends (including the year end "bonus"). How does it do this without return of capital?
This is based on the prospectus' Financial Highlights. (That's a 38MB file; just in case you've got thoughts of actually checking up on me :-) ) Wait for it to load so that it jumps to Financial Highlights, then scroll a few pages, past prospectus p. 87, to p. 89 where you'll find the data for PIMCO Income Fund.
It shows for the year ending 3/31/15 that the fund distributed 74c as income (for PONDX, i.e. Class D). This matches the sum of the monthly income dividends between April 2014 and March 2015 plus the bonus dividend on 12/29/14 of 10.6c, give or take rounding to the nearest penny.
But that same line in the prospectus says that the net income per share for the same period was only 49c. Where did that other 25c/share come from? The prospectus says there was no return of capital.
I honestly don't have a clue; I don't usually try to dissect financials this finely. There's more going on; can't really comment more on it without understanding it better. Homework for another day, perhaps.

www.dividend.com/dividend-stocks/financial/property-management/?utm_source=Dividend.com&utm_campaign=6b12a56f00-Free_Engage_Content_Dispatch_LI_12_28_2015&utm_medium=email&utm_term=0_5465108463-6b12a56f00-34547085&goal=0_5465108463-6b12a56f00-34547085

Continuing....
Most of the sectors are fairly close, except for Consumer Cyclical and Financial Services - pity. But the broad "super sectors" (Cyclical, Sensitive & Defensive) are spot on. It is also a shame that the blended E.R., at 45 bps, is 16 bps higher than SPHQ.
But again, after March 2016, SPHQ will no longer "be" SPHQ. It will be a very different E T F with very different holdings, "trying to pass" as the old SPHQ.
Another comment. If you look at the [Documents] tab of SPHQ, and open up the fact sheet,
you will see a graph suggesting that the ETF has underperformed the S&P 500. While this is true over the life of SPHQ, it is not true since the SPHQ index last changed at the end of June, 2010.
According to M*, over the last 5 years, SPHQ has outperformed Vanguard's S&P 500 Index Fund Admiral Class by about 73 bps per year, with risk (measured either by Standard Deviation or Beta) that was about 10% less than the 500 Index.
In other words, by stapling the new post-June 2010 index onto the SPHQ in 2010, Powershares produced an E T F that looked like an underperformer, in their own marketing materials.
Other risk measures from M* are available here:
http://performance.morningstar.com/fund/ratings-risk.action?t=SPHQ
Morningstar sector allocations are below, for MPGFX, SPLV, their 50/50 blend, and SPHQ.

Exp Ratio	65 	25	45 	29 
Sector	        MPGFX	SPLV	BLEND	SPHQ
Basic Materials	11.60 	4.31    7.96 	6.79 
Consumer Cyc	5.13    3.01 	4.07 	19.21 
Financial Svcs	12.99 	16.99 	14.99 	4.71 
Real Estate	0.00 	6.82 	3.41 	0.83 
Cyclical	29.72 	31.13 	30.43 	31.54 
Comm Svcs	0.00 	4.17 	2.09 	0.79 
Energy	        2.83 	0.00 	1.42 	1.26 
Industrials	32.25 	19.31 	25.78 	29.03 
Technology	7.37 	0.00 	3.69 	4.17 
Sensitive	42.45 	23.48 	32.97 	35.25 
Cons Defensive	8.69 	20.44 	14.57 	16.77 
Healthcare	19.15 	13.48 	16.32 	10.45 
Utilities	0.00 	11.44 	5.72 	5.97 
Defensive	27.84 	45.36 	36.60 	33.19