The guys obviously no Vanguard Fan....and that's no big deal
But most of the stuff he spits out IS wrong and misleading....that is a BIG deal
"How does the retirement expert spend his retirement? By helping others with theirs. More articles from author, educator and financial expert, Paul Merriman."
Self proclaimed titles: retirement expert, educator of what?, financial expert, really? thats a lot of expertise with little evidence to show from article .....thanks for the HELP Paul...I pass

@MFO Members: Distributions & Mutual Funds: (A Primer)
Merry Christmas,
Ted
http://theory.stanford.edu/~oldham/publications/financial/distributions/distributions.pdf

FYI: It may be the Mutual Fund Store, but company executives are not dogmatic about the "mutual fund" part.
Starting in 2015, the $9.5 billion registered investment adviser known for selling mutual funds and financial advice to the masses will add a product to its repertoire: ETFs
Regards,
Ted
http://www.investmentnews.com/article/20141223/FREE/141229997?template=printart

In general, here is how I understand it along with what was written on a site that I referenced.
The record date is not the key date, the ex-dividend date is. Ex-dividend date is three days after the record date. The reason is that it takes three business days for share purchases to record (T+3). Trades made three days before the record date record on the record date, trades made two days before record one day after. So if you buy three business days before, the trade records in time and you get the dividend. If you buy two days before, you don't get the dividend because the sale doesn't record until after the record date, if you are the seller, you still get the dividend because even though you've sold the stock, you will be the holder of record on the record date (Possibly, See Comment).
Here is what is said on the SEC's site ...
http://www.sec.gov/answers/dividen.htm
Comment: I have known of some mutual funds that recgonize a fund owner as those that own the fund at the opening of business on record day; and, then some that recgonize only those that own the fund at the close of business on record day. For this reason I'd present this question to the subject's financial advisor and/or the fund company. In this way, the potential seller will have heard it straight form those that are inside the business transaction.
Hope this helps ...
Old_Skeet

Front-loaded. Higher than average fees. Their "fund-of-funds" actually tack on an additional "allocation fee" in addition to the underlying fund fees, (Know anybody else that does that?) Their Champion Income Fund wrote the book on how NOT to run a fixed-income fund, loosing around two-thirds of its value during the '07-'09 financial meltdown.
Sure, they have a few winners. But I'd look elsewhere first.

Hi Guys,
Charles’ recent “Irrational Markets - Proof Positive” post prompted me to initiate this topic. That discussion highlighted the discordant opinions and recommendations made by supposedly financial and investment experts. The cacophony is loud, endless, and often much less than useful. Chaotic investing is a likely outcome.
The Charles post emphasized the mind-bending character of old wisdom saws like “Out of the mouths of babes comes wise insights, yet, only with age comes wisdom”.
If the latter is true, I have accumulated much wisdom. I guess you should seek investment advice from either young Wharton business school graduates or perhaps from older, more senior graduates. I listen to both, but weight them differently.
For many years, an industry agreement seemed to have been reached with regard to an acceptable retirement portfolio drawdown rate. Portfolio survival for an extended retirement period is the obvious goal.
These earlier studies mostly suggested something approaching a 50/50 mix of equity and fixed income holdings. High portfolio survival rates were estimated when withdrawal rates were limited to roughly 4% per year adjusted for inflation. The original work in this arena was done at Trinity University in 1998 and has been frequently updated.
Here is a Link to one readable update written by Wade Pfau in 2010:
http://wpfau.blogspot.com/2010/10/trinity-study-retirement-withdrawal.html
The Pfau analysis didn’t much change the earlier study findings. However, some concern over the current overpriced marketplace, coupled with a very low interest rate environment, has persuaded a few gurus to shorten the recommended drawdown schedule from the standard 4% rule-of-thumb to an even lower 3% annually.
Now for the controversial analysis and recommendation that wants to upset this comfortable apple cart. It will surely add to Charles’ distress over conflicting and competing financial advice. That’ll never change.
It is a retirement study from the Director of Research at the Putnam Institute. Here is the Link to this cart upsetting 16-page, 2011 release:
https://www.putnam.com/literature/pdf/PI001.pdf
Please give it a road test. It merges portfolio returns uncertainty with life expectancy probabilities for both men and women separately. The methodology deploys a novel Retirement Present Value (RPV) model to project portfolio survival likelihoods.
The RPV’s surprising and controversial output is that the retirement portfolio that offers the best survival prospects includes a much smaller fraction of equity holdings than does the original Trinity study and other follow-up Monte Carlo analyses. Check it out; controversy is good.
Personally, I’m not comfortable with the Putnam work product. The manner in which the “optimum” portfolio equity/fixed income mix was determined escapes me. Certainly a portfolio with only a single Index-like equity position is retirement dangerous because of its volatility (standard deviation). But fixed income is likely more dangerous because of muted annual returns.
The standing answer has been broad portfolio diversification that trades off a little annual return for a major decrease in overall volatility. Outcomes are definitely timeframe dependent, but I still trust this generic and time-tested approach.
You get to choose your own poison. My head spins off-axis as often as Charles’ does. Let MFO members know your thinking on this matter.
Best Regards and Happy Holidays.

FYI: How could my financial advisor have done this to me?” Many ask this question after they buy a variable annuity. You’ve heard that most of these products are nasty. Some say high fees burden them. Others complain that they’re inflexible.
They penalize investors who try to sell before a predetermined date.Wall Street Journal writer Matthias Rieker says that many people file complaints about variable annuity sales. Ken Fisher, writing for Forbes, recently called them “scumbag products.” But I’m going to defend the advisors selling them. Somebody has to.
Regards,
Ted
http://assetbuilder.com/andrew_hallam/in_defense_of_advisors_who_sell_variable_annuities

Note:
For some reason, Ted's link to his original article disappeared or became inoperative after I wrote a response. Not good. Here's the original article to which I was responding:
http://www.nasdaq.com/article/target-date-funds-twice-as-popular-vs-15-years-ago-cm425440
The comparison is with 1998. That was an extraordinarily "euphoric" period for retail investors for many reasons. So, the rise in popularity of balanced funds in subsequent years doesn't surprise me.
If I'm reading this article correctly, it's really about balanced funds "which include target-date funds" (quoting from article). I find this presentation a bit suspicious.
That aside, it's unfortunate so called "target date" funds get lumped together at all by financial commentators like this one. They vary greatly in their approach to investing. If you want a good one, look to the fund family first. That's where it all starts with these things.

FYI: The exchange-traded fund (ETF) industry saw one of its largest monthly gains in November, with data compiled by ETF.com showing that U.S.-listed ETFs witnessed $42 billion in net inflows for the month. [1] The strong performance for the extremely popular investment channel helped asset managers rake in more than $192 billion in net new money across their ETF offerings for the eleven-month period this year – comfortably surpassing the $188 billion record figure for full-year 2013. U.S.-listed ETFs are just shy of $2 trillion in total assets – a threshold they are very likely to cross by the end of the year thanks to the record run for the equity market over recent weeks.
,BlackRock (NYSE:BLK) gained the most over the year, with the financial institution capitalizing on its position as the world’s largest asset manager as well as world’s largest ETF provider to report net inflows of $71.4 billion in the U.S. and almost $90 billion worldwide. [2] Vanguard, which saw an exceptionally strong start to the year (see Vanguard Trumps BlackRock, State Street To Record Highest ETF Inflows In Q1), comes in a close second with $63.5 billion in U.S. inflows and $75 billion in global inflows. This has brought Vanguard within striking distance of State Street (NYSE:STT) for the position of the second largest U.S.-listed ETF provider.
Regards,
Ted
http://www.trefis.com/stock/blk/articles/271067/blackrock-continues-to-make-the-most-of-the-etf-growth-story/2014-12-19

Problem: 24/7 financial news cycle, Solution: you must learn to filter garbage, take ONLY what YOU can use (to make money), file the rest into useless, then make your OWN decisions
Predictions: are for entertainment purposes only, have fun with them, do your own:
I predict we will make good money in 2014,esp. after 2013, and we will make money again in 2015, write that one down for your first 2015

LATEST MEMO FROM OUR CHAIRMAN, HOWARD MARKS
Memo to: Oaktree Clients
From: Howard Marks
Re: The Lessons of Oil December 20,2014 © 2007-2014 Oaktree Capital Management, L.P. All Rights Reserved.(excerpts)
"Over the last year or so, while continuing to feel that U.S. economic growth will be slow and unsteady in the next year or two,
I came to the conclusion that any surprises
we're most likely to be to the upside. And my best candidate for a favorable development has been the possibility that the U.S. would sharply increase its production of oil and gas. This would make the U.S. oil-independent, making it a net exporter of oil and giving it a cost advantage in energy–based oncheap production from fracking and shale–
and thus a cost advantage in manufacturing. Now the availability of cheap oil all around the world threatens those advantages. So much for macro
forecasting!
There’s a great deal to be said about the price change itself.
A well-known quote from economist
Rudiger Dornbusch goes as follows:
“In economics things take longer to happen than you
think they will, and then they happen faster than you thought they could.”
I don’t know if
many people were thinking about whether the price of oil would change, but the decline of 40%-plus must have happened much faster than anyone thought possible.
On the other hand
–and in investing there’s always another hand–high levels of confidence,
complacency and composure on the part of investors have in good measure given way to disarray and doubt, making many markets much more to our liking
.
For the last few years, interest rates on the safest securities–
brought low by central banks
–have been coercing investors to move out the risk
curve. Sometimes they’ve made that journey without cognizance of the risks they were taking, and without thoroughly understanding the investments they undertook. Now they
find themselves questioning
many of their actions, and it feels like risk tolerance is being replaced by risk aversion.
This paragraph describes a process through which investors are made to feel pain, but also one that makes markets much safer and potentially more bargain-laden.
http://www.oaktreecapital.com/MemoTree/The Lessons of Oil.pdf
Elsewhere; A look at the commodity bubble in the 2000-08 period.Just an observance of the past for me personally.I have no opinion on his bullish outlook for oil. Article from Seeking Alpha.
Lawrence Fuller, Fuller Asset Management Dec. 20, 2014 2:55 PM ET
The Oil Price Plunge - Fiction, Reality And Opportunity (excerpts)
"Shortly after the tech bubble burst in 2000, institutions began to allocate billions of dollars into commodities through the futures markets in an effort to capitalize on growth in the developing world. Commodities became a new financial asset class. The continual and escalating flow of funds into a buy-and-hold strategy of a basket of commodities with no sensitivity to price led to a parabolic move upwards in prices prior to the financial crisis in 2008.
The regulatory body for the futures exchanges (CFTC) exacerbated the volatility by exempting Wall Street banks from the limits under which traditional speculators operate. As a result, a hedge fund can use a Wall Street bank as a counter-party to speculate on commodity prices for financial gain with no limitations. It is important to recognize that the vast majority of oil futures contract holders never take delivery of a single barrel of oil-they simply roll over the contracts. As a result of these changes in market structure, futures prices now dictate spot prices.
There was no greater evidence of commodity prices divorcing from fundamentals than the surge in oil to $147/barrel during the summer of 2008. That parabolic move occurred six months into what we now call the Great Recession. There were no lines at the gas pump. There was no outcry from oil-importing nations that they were unable to obtain the oil that they needed. That move was fueled by speculative investment flows into oil futures contracts in a herd mentality. The herd was being steered (over a cliff) in part by deluded research reports from Morgan Stanley and Goldman Sachs that were forecasting prices of $150 and $200/barrel, respectfully. Just a few months later the price had collapsed to less than $60/barrel, but not because of a commensurate decline in demand or increase in supply. Institutional investors and speculators were being forced to deleverage and unwind long positions in the throes of the financial crisis and stock market meltdown"
http://seekingalpha.com/article/2770205-the-oil-price-plunge-fiction-reality-and-opportunity?ifp=0

The international sister to Quantitative Value (QVAL), which we profiled in the December commentary.
Here's letter announcement from Dr. Gray:
Friends/Family/Fans:
ValueShares has launched its second Active EtF, the ValueShares International Quantitative Value EtF (Ticker: IVAL).
The IVAL mission is straightforward:
We seek to buy the cheapest, highest quality International value stocks.
We believe that because you understand value investing, and the inevitability of human bias, a systematic approach to value investing offered through IVAL might be interesting.
Financial markets offer a wide array of products today, and you are free to choose among them, but if you are a value investor, IVAL can provide you with a simple way to practice Ben Graham’s common sense value investing style.
We have a White Paper entitled, “Our Quantitative Value Philosophy,” which outlines the philosophy underpinning our IVAL strategy.
Many investors are seeking actively managed investments, which focus on high-conviction portfolios (e.g., less than 50 stocks), and do not seek to replicate the performance of an index. Unfortunately, there are very few actively managed, high-conviction, value-focused international equity EtFs available today. We hope IVAL can meet the needs of investors who are seeking an actively managed, high-conviction, value-focused, international equity EtF.
You can learn more about IVAL at ValueShares.com and you can learn more about Alpha Architect (the advisor) at AlphaArchitect.com.
Semper Fidelis,
Wesley R. Gray, Ph.D.

A BlackSwan event is one that was not anticipated, something that happened 'out of the blue' which no one would have expected. That is how I define it. In many instances they are geo-political events that cause economic events. Those economic events might have happened anyway, but the geo-political event(s) made it a reality.
2007-08 was not a BlackSwan event as such, since the primary causes were financial in nature - mortgage mess, financial leverage, etc.
2001-02 certainly had a portion that was BlackSwan...the terrorist attacks in the U.S., which may have precipitated an already high-priced stock market and other economic issues.
Others may have different definitions of BlackSwan events. But by definition, if a certain geo-political event is in the news and already occurring or about to occur, it is not BlackSwan.

From Bloomberg article:

Burrows’s attempt to exploit a vulnerability in the way rail travel is priced is a microcosm of the behavior of how some traders sought to profit from the way currency and interest rate benchmarks such as Libor are calculated -- regardless of rules requiring honest personal conduct. Banning someone from the industry over something unrelated to work-place conduct shows how seriously the FCA takes telling the truth as it tries to rebuild trust in London’s financial markets, lawyers said.

http://www.bloomberg.com/news/2014-12-15/former-blackrock-managing-director-banned-for-evading-rail-fares.html
From BBC News:
bbc.com/news/business-30475232

Several licensed professions have provisions where licenses can be revoked for crimes of moral turpitude - I'd mentioned lawyers; also real estate agent and doctors. Likely others. Should we hold financial fiduciaries to a lesser standard than real estate agents? Or conversely, does it make sense to hold real estate agents to a greater standard?
The point of moral turpitude is that various industries look at conduct which, while not crimes within the industry (such as the ones you alluded to), reflect upon the person's ability to deal fairly with the public. It's one of those squishy areas; it struck me that this was the standard/reasoning being applied. And there are several professions that apply this standard.
We have rules about permanent revocation of licenses - I've no problem with them, because they're related to future risk (as with your DUI example). I had something different in mind. Rather something like:
16 year old kid backs his dad's car past the driveway into the street. Cop happens to be passing by, gets the kid for driving w/o a license. Kid takes drivers ed, passes road test/written test, gets licensed. Should he be prohibited from driving (riding train) because he previously drove without a license (rode train w/o a ticket)?
So long as the driver (rider) is properly licensed (ticketed), why should the driver (rider) be barred from the legal activity?

I have been watching on the sideline on this " alternatives" while holding with a healthy % of cash and short term bond funds. I welcome another 10% drop as of this Friday - great entry points.

I'm not sure what a "great entry point" is or would be. Admittedly, I have only a cursory knowledge of markets and investing. I do know that the longer the time horizon, the higher (in valuation terms) that entry point can be. So, were I a youngster of 35, I'd throw everything into a good index fund (perhaps the Wilshire 5000) and forget about it.
David has pointed out on more than one occassion in his monthly commentaries that equity markets in general don't appear cheap. One quick take-away from his March 2014 piece: "Hence inflows into an overpriced market." (You barely need read between the lines here to fathom the sentiment.) http://www.mutualfundobserver.com/2014/03/march-1-2014/.
For context, The Dow closed at 16,322 on February 28, 2014.
I try to put things in the widest context possible. I look at the DJI during its late 1990s peak years and find it running in the 9,000-10,000 area (with a close on December 31, 1999 around 11,500). Now, nearly 15 years later, it hasn't yet doubled. So ... by that gage, I don't think we're in an obscenely overpriced equity market here in the U.S. - but not a cheap one either.
There's great danger in numbers. Back in the late 1990s (when TV gave birth to CNBC) with the Dow at 9,000-10,000, a 1,000 point gain would have amounted to more than a 10% increase in value. Recently, with the Dow around 18,000, a 1,000 point gain still garners the same media "hoopla" - but is, in fact, only about a 5% change in value. So, be careful looking at those "ups and downs" and trying to assess changes in valuations.
There's a conventional school of thought which follows something called: "The Rule of 8." Longtime financial commentator Bruce Williams used to refer to it on his radio program. In a nutshell - one's investments should double in nominal value every eight years. One wonders, however, whether in an era of low inflation and 2% yields on Treasuries, that's still a realistic expectation.
If there is an "undervalued" area, it would apoear to be in the commodity related sectors. Returns for Price's New Era (PRNEX), a fund with a solid long term track record, are now in the single-digits going back 10 years. There's plenty of room to run there ... but only if inflation picks up. One question I've been pondering without much success is: What would a fund like PRNEX do in the event of rising commodities prices and a falling U.S. equity market? Watching recent market movements, I suspect a fund like that would hold its own or possibly gain, while the major equity indexes were tumbling. But ...I'm decidedly not sure.
Regards

Lots of little items come to mind ...
- This was a UK action. Wonder how good their enforcement practices are.
- Sounds like moral turpitude action ("conduct fell short of the standards we expect"). Moral turpitude - behaviour that is inherently contrary to accepted rules of morality - requires clear intent (the manager admitted to doing this repeatedly). Theft is considered a crime of moral turpitude. Moral turpitude is a reason for disbarring a lawyer. Does financial industry have this standard too?
- I'm thinking that moral turpitude and fiduciary duty intersect (e.g. theft, as here), but one is not a subset of the other. For example, one can be a child molester while still taking prudent care of a client's money - no theft, diligent research, etc.
- No reason why he can't pay for a ticket and ride a train. If someone is found guilty of driving without a license, should that person be prohibited from properly obtaining a license and driving?

FYI: Every year, new global trends emerge, old ones play out, and the financial markets adjust. This can offer new opportunities for investors to make money if their forecasts are accurate, their investments are timely, and they choose their assets well.
Regards,
Ted
http://www.usatoday.com/story/money/markets/2014/12/13/247-wall-st-best-investments/20205629/

If you are in the least speculative, it is hard to see much downside to REXX and COG, both companies in good financial shape and hugely depressed.

Ha! I take it back...a closer look at the monthly oil data shows that most of price drop in 1980s occurred over short few month period in early 1986. Steep, heavy drops happened again in 1991 and 2008!
Interesting to see that oil has never recovered to pre-financial crisis levels...we remain in the same drawdown, 78 months and counting...
Here's plot of data from Energy Info Administration: