Reply to @MaxBialystock: Actually we talked about our children a lot, MIchelle's inability to cook (she mostly warms things up) and Andrew's passion for it (it's a major stress management tool thought he, like me, hates to bake) and the fascinating bacon-wrapped mozzarella that we were eating. There was a freakish fire alarm in the midst of it all - "this is not a drill, remain in your places" quoth the Chicago Fire Department.
We did drift in the direction of the state of the fund industry (bizarrely uninterested in the welfare and interests of its shareholders) and China (what passes for a financial system there would be barely recognizable to anyone here), but quickly regained our senses and talked about you folks.
David

More than one manager is worried about "a credit event" in China this year. That is, the central government might precipitate a crisis in the financial system (a bond default or a bank run) in order to begin cleansing a nearly insolvent banking system. The central government is concerned about disarray in the provinces and a propensity for banks and industries to accept unsecured IOUs. They are acting to pursue gradual institutional reforms (e.g., stricter capital requirements) but might conclude that a sharp correction now would be useful. One manager thought such an event might be 30% likely. Another was closer to "near inevitable."
More than one manager suspects that there might be a commodity price implosion, gold included. A 200 year chart of commodity prices shows four spikes - each followed by a retracement of more than 100% - and a fifth spike that we've been in recently.
More than one manager offered some version of the following statement: "there's hardly a bond out there worth buying. They're essentially all priced for a negative real return."
More than one manager suggested that the term "emerging markets" was essentially a linguistic fiction. About 25% of the emerging markets index (Korea and Taiwan) could be declared "developed markets" (though, on June 11, they were not) while Saudi Arabia could become an emerging market by virtue of a decision to make shares available to non-Middle Eastern investors. "It's not meaningful except to the marketers," quoth one.

http://www.sec.gov/Archives/edgar/data/1494928/000139834413002870/fp0007468_497.htm
497 1 fp0007468_497.htm
RiverPark Funds Trust
RiverPark Short Term High Yield Fund
Supplement dated June 14, 2013 to the Summary Prospectus, Prospectus and Statement of Additional Information (“SAI”) dated January 28, 2013.
This supplement provides new and additional information beyond that contained in the Summary Prospectus, Prospectus and SAI and should be read in conjunction with the Summary Prospectus, Prospectus and SAI.
Effective as of 4pm on June 21, 2013 (the "Closing Date"), Retail and Institutional Class Shares of the RiverPark Short Term High Yield Fund (the "Fund") are closed to new investors.
After the Closing Date, existing shareholders of Retail and Institutional Class Shares of the Fund and certain eligible investors, as set forth below, may purchase additional Retail and Institutional Class Shares of the Fund through existing or new accounts and reinvest dividends and capital gains distributions. Existing shareholders and eligible investors include:
· Shareholders of Retail Class Shares and Institutional Class Shares of the Fund as of the Closing Date (although once a shareholder closes all accounts in the Fund, additional investments into the Fund may not be accepted).
· Clients of a financial adviser or planner who had client assets invested in the Fund as of the Closing Date.
· Any trustee of RiverPark Funds Trust, or employee of RiverPark Advisors, LLC or Cohanzick Management, LLC, or an investor who is an immediate family member of any of these individuals.
The Fund reserves the right, in its sole discretion, to determine the criteria for qualification as an eligible investor and to reject any purchase order. Sales of Retail Class Shares and Institutional Class Shares of the Fund may be further restricted or reopened in the future.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
RPF-SK-011-0100

Bloomberg article by Jim O'Neil:
"The past few weeks have given us a hint of what might happen when the Federal Reserve starts to reverse its super-easy monetary policy. Expect turbulence in financial markets, especially for assets that have moved far above normal or reasonable valuations.
A return to normality eventually implies a benchmark 10-year Treasury yield of 4 percent or more. It won’t happen all at once, but that’s where we’re heading. With yields at roughly 2.2 percent, there’s a long way to go. This transition will mark a recovery of the equity culture and the cooling of investors’ protracted love affair with bonds. "
can-bernanke-avoid-a-meltdown-in-the-bond-market

Hi Guys,
We’ll never know when to hold’em; We’ll never know when to fold’em, if we don’t know the odds. For completeness, you also need to know the Expected Payout, but that’s a subject of another story.
When in Las Vegas, it is never a smart or profitable decision to play Keno; the odds are terrible for the player. The only consistent winners are the casinos. Not surprisingly, the luxury casino/hotels have the poorest payout odds, but they do employ the best looking Keno runners. There are always hard tradeoffs.
From a fair odds perspective, Blackjack should be the game of choice. With just a little study and a persistent discipline, the odds at “21” can be effectively equalized without defaulting to a dangerous card counting system.
As Louis Pasteur remarked; “When observation is concerned, chance favors only the prepared mind”. And the prepared gambler.
That’s, of course, only true sometimes since luck is an uncontrollable factor. Emotions and hope often prevail over logic in decision making. The winning odds in lotteries are lousy, and most everyone knows that the odds are lousy. Yet lotteries attract huge monies. Hope for riches is an incentive that folks can not disregard. Gambling on an uncertain investment return has sport-like characteristics.
Most folks would likely prefer the clockwork precision world of Isaac Newton. When he discovered the classic mechanical Laws of Motion and Gravity, many of the 17th century hoi polloi believed that happenings were preordained and totally predictable. That faulty interpretation ended when Werner Heisenberg introduced his statistically based
Uncertainty Principles to explain some of physics more complex and perplexing issues. Life is fuzzy.
Like it or not, the investment world is more like Heisenberg’s model than like the Newtonian perspective. Uncertainty rules the investment day so statistical expectation is a superior framework over a clean, single point forecast for planning purposes .
Consequently, to tilt the odds in the investment universe, an understanding of statistics, their merits and their shortcomings, is essential. You must know the odds, estimate the expected payoffs, and have a plan to exploit them in your favor. An additional dimension of complexity is introduced because these odds are not constant over time.
Based on long-term statistical data tables, we know that the US equity market has a modest 0.03 % return daily upward bias. That’s the financial incentive to invest despite its roughly 1.00 % daily price volatility (standard deviation).
These same statistical pricing data sets amply illustrate that time is an investors best friend. On a daily basis, the S&P 500 Index (serving as an equity market proxy) has delivered positive outcomes 53 % of the time. As the time scale progressively stretches to weekly, monthly, quarterly, annual, and 5-year increments, the likelihood of positive outcomes increases to 56 %, 59 %, 64 %, 71 %, and 81 %, respectively. Indeed, time is a powerful ally.
The sell-in-May axiom reminds us that the progress is not uniform. The long-term monthly data sets show two negative months (February and September) with weak positive returns recorded in the summer months. Even this weaker period generates likely rewards that exceed the current low yields offered by alternate fixed income candidate vehicles.
Overall, because of their perceived risk (loosely measured by return volatility), equities have awarded investors with a risk premium of 4 to 6 % over a various assortment of zero risk options like short-term or 10-year government bonds. That’s likely to remain intact going forward.
However, as a general observation, predicting future market returns is a Loser’s game, especially for the short-term annual prediction drill. Numerous Guru attempts are made producing an equal number of failures. Longer term forecasts (like 10-year periods) are imperfect, but have proven to be much more reliable.
Recent academic and industry studies suggest that some forms of P/E ratio can explain about 40 % of the equity market movements. That’s surely a step in the right direction, but it is a double-edged sword. That same finding also means that 60 % of the action remains clouded in mystery. In the end, forecasts are not perfect so portfolios should be assembled to reflect this uncertainty.
I interpret that bottomline conclusion in terms of my portfolio’s asset allocation. To make the portfolio robust against this uncertainty, the portfolio must retain its broad diversification characteristics. It must protect against an array of future scenarios that include downside probabilities.
Here is a reference to a nice Vanguard study prepared late last year that catalogues candidate forecasting signals and their shortfalls. The title of the work is “Forecasting Stock Returns: What Signals Matter, and What do They Say Now?” Here is the Link to the document:
https://personal.vanguard.com/pdf/s338.pdf
The study explores over a dozen candidate market direction signals to project future equity returns. Various P/E ratio formulations did the best job. Most others failed miserably. The Vanguard researchers conclude that attempts to predict near-term equity performance (like next year’s returns) is a lost cause; one-year estimates are worthless.
The study further concludes that there is a modest ability to capture reasonably reliable 10-year annualized returns. The P/E 40 % explanatory power observation that I mentioned earlier was gleaned from this study.
For forecasting purposes, Vanguard uses a Monte Carlo simulation code that explores market return as a function of leading signal correlations. This proprietary tool is called the Vanguard Capital Markets Model (VCMM). A primary output of the code is a multiyear market returns projection map. One dimension of that map is an event probability distribution.
When applied to the current economic and financial environments, the simulations are more positive than negative about the upcoming 10-year equity market prospects. Vanguard sees a higher likelihood of positive returns, slightly muted when contrasted against historical equity rewards.
Of particular interest are the final charts in the referenced report. The plots show the predicted return’s probability distributions for this year, and the next 10-year period.
Note that the VCMM code has the rare capability to forecast low percentage (probability), infrequent fat tail outcomes, essentially Black Swans. That’s an exciting feature. However, I seriously doubt the tools have sufficient accuracy at these extremes given how far removed these events are from the data rich historic average returns.
I recommend that you visit the article. Sorry that I didn’t post this Link earlier, but I neglected to read the report for several months as it languished on my to-do list.
Best Regards.

Rather, investors should worry about a less-discussed reality: The structure of the bond market itself is balky and vulnerable to bouts of exacerbated investor losses and trading air pockets, simply because the act of trading corporate bonds among funds and banks has become tougher and less-efficient since the financial crisis.
Inventories of corporate bonds among the big Wall Street banks known as primary dealers totaled $100 billion in 2004 and more than $200 billion at their 2007 peak, according to the Federal Reserve Bank of New York. Today, in a larger overall market, dealers hold just over $50 billion.
“What scares me and really what the reality is, is that there’s not enough balance sheet on the ‘sell side’ to support any kind of warehousing activity if institutional investors want to materially reduce their holdings.”
He’s concerned about a “structural asymmetry” in the fixed-income market: “It’s fine when there are [mostly] buyers, but not when there are sellers.”
http://finance.yahoo.com/blogs/michael-santoli/balky-bond-market-plumbing-big-hidden-risk-145357441.html
It's always the unknown unknowns that blindside.
Holdings RNSIX, MAINX down 4-5% in selloff (more than a year's yield)...RPHYX, SUBFX, FFRHX down two or three hundred bips.

Hi Pangolin,
First and foremost, I am not a financial consultant or advisor. So I don’t normally reply to questions that you raised. Also, to produce a more focused plan, an advisor would need considerably more information about the health and special circumstances of those impacted by any candidate plan.
Given those obvious constraints, and with considerable reservation, I can offer a few general guidelines since I recently addressed a similar set of issues with an extended family member.
The initial step in this process is to identify some pertinent odds to establish an appropriate investment timeframe.
For a 66 year old white female in the US, the average expected survival life is roughly 19 years. For a black female subtract one year. Regardless of your aunt’s optimistic goal to pass the wealth, her savings must last at least that long. She must protect herself first.
The issue of Long Term Care (LTC) is also relevant. Statistical databases suggest that it is a coin flip (50/50 odds) if a person of your aunt’s age will require LTC assistance. Additionally, if LTC is required, the average female stay is 2.6 years with a 12 % likelihood that the stay will extend beyond 5 years.
Since you reported that your aunt has immediate cash access to cover 2-plus years of LTC service, this challenge, although not fully covered, possesses only a minor uncertainty. This is not troublesome since adjustments and reallocations can be made later if required.
Keep in mind that if the savings are in an IRA, withdrawals are mandatory at age 70 ½ using a escalating schedule. That requirement might come in at just the right time. Independent of her desires to work forever, your aunt’s employer might have a different idea. For conservative planning purposes, I would assume that her earning power evaporates about at that same age.
Further, given your brief description of her, I assume she is a novice investor without deep rooted financial learning in that arena or investment preferences. My family member is precisely in that category.
Given those assumptions and considerations, the overarching guidelines of any plan should be simplicity and low costs. Since the timeframe extends well beyond the minimum 19-year nominal life expectancy number because of the pass-through goal, a portfolio that is heavily weighted towards equity products seems reasonable.
As a baseline, I suggest she consider a three component mutual fund portfolio that includes broad US equities, bonds, and foreign holdings. Vanguard Index products serve this function without daily market monitoring needs; they also proffer the lowest cost structure. I suggest she consider a Vanguard total market Index fund, a balanced mutual fund (for a little active management exposure), and an international Index fund.
A simple portfolio with a 35 % commitment to VTSAX, a 50 % VWINX holding, and a 15 % VGTSX foreign exposure yields a 55 % US equity, a 30 % bond, and a 15 % foreign equity asset allocation. There’s respectable diversification in this modest portfolio.
The bond exposure will limit volatility. In very rough terms, the anticipated current return prospects for this portfolio given our economic malaise is about a 6 % annual average return with a 12 % standard deviation. That translates to an expected annual cumulative return of 5.3 % allowing for the degrading impact of portfolio volatility.
The marketplace is a dangerous place these days (actually almost every day). So a dollar cost averaging approach spread over a year in four increments might be a risk mitigating tactic.
I hope this helps a little. It is surely not a perfect solution, but just might provide you some useful insights before making a final decision.
Best Wishes.

Reply to @ron: Hi Ron. Congratulations on owning VWELX, a marquee fund. Years ago I chose DODBX over VWELX and suffered badly during financial crisis when D&C got hammered. Both were recommended in an article that influenced me called One Fund for A Lifetime, by Paul Merriman.
Wouldn't it be great to be able to put your money in one fund and forget about it for years? I think 20 years represents that kind of enduring tenure and attendant stature, while still being relevant to present, especially if the fund's performance can persist across shorter time frames, like 10, 5, and 3 years. Really hard to do. Could have picked 15 or 12...or 7? Just needed to snap line somewhere. I'll blame Mr. Merriman.
VWELX does show up in Risk Group 3, or "Moderate," versus the GNMAs you note, which are in Risk Group 1, "Very Conservative." Novice investors likely expect that funds in the "Moderate Allocation" category have moderate risk. But we know it's not always true. DODBX is an example! Similarly for Interim Government fixed income funds. Not all have low risk.
David and I had a version of the system that was investment category agnostic if you will...where the ratings were only within risk groups, but at the end of the day we thought it would be more useful to readers to rate within traditional investment categories while only noting risk relative to market.

http://online.wsj.com/article/SB10001424127887324866904578517132787035110.html?mod=WSJ_hp_Markets3up
If you cannot read the article Google the title: Pimco Fund Stung By Selloff in Bonds
Here is the Google Search Link: https://www.google.com/search?q=Pimco+Fund+Stung+By+Selloff+in+Bonds
Some quotations if you fail to read the whole article:
The monthlong selloff in U.S. Treasury bonds is pushing the Pimco Total Return fund run by Bill Gross of Pacific Investment Management Co. toward its worst monthly loss since the financial crisis.
The $292.9 billion fund, the world's largest bond fund, has posted a negative return of 1.9% through May 30. That compares with a loss of 1.62% from the Barclays U.S. Aggregate Bond Index, according to data from fund tracker Morningstar.
The fund is on pace for its biggest monthly loss since September 2008, and ranked 159 out of 174 intermediate-term bond funds tracked by fund tracker Lipper.
Mr. Gross boosted holdings of Treasurys in April to the highest level in over a year, betting that monetary stimulus from the Fed and the Bank of Japan would keep bond yields low.
The strategy worked well in April. The 10-year Treasury note's price rallied and the yield dropped about 17 basis points, or hundredths of a percentage point, for the month. Mr. Gross's fund posted a return of 1.18% in April, beating 1.01% from the benchmark index.
The tide turned against Mr. Gross in May.

Thank you for the follow up post. If I find an interesting fund I enter it into a financial app I have on my Ipad and I follow it on the app especially on days when there is a big move in the market. You have enhanced my knowledge with your post thanks again.

Hi Guys,
Yesterday, MFO participant Hogan asked a pertinent portfolio construction question that deserves special attention, and therefore a standalone listing on the MFO site instead of a quickly buried reply.
Specifically, Hogan solicited help to identify a portfolio “diversifier on a down US equity day”. Many MFO members proffered excellent candidates. The purpose of my post is not to offer a fish, but rather to instruct on how to fish.
Hogan framed his question in terms of a single day; of course he is referring to diversification over an extended period. Unless you are a day trader, a single days performance is really noise and not a reliable signal.
Accordingly, at the root of Hogan’s query, we are now talking statistics and probabilities. Specifically, we are referring to correlation coefficients and how to calculate them.
Don’t panic. These days you need not do the calculation yourself. There are many websites that will not only do the calculation, but will also do the heavy lifting of securing all the data inputs required to complete the analysis. I will list one such user friendly site a little later.
First, for the benefit of the neophyte investor, a definition of correlation coefficient is needed because it appears in the formal mathematical equation that describes a portfolio’s volatility (standard deviation). When applied to a portfolio, correlation coefficient measures the price movement togetherness of two investment products. Its scale goes from plus One (perfect togetherness) to Zero (completely random behavior between the two holdings) to minus One (totally out-of-synch performance).
It is significant to record that correlation coefficients are not static; they dynamically change over time because of complex market interactions.
It is also significant to note that one primary goal in portfolio diversification is to minimize its volatility while simultaneously maintaining average annual returns. Over the years, portfolio volatility works to erode end wealth; cumulatively, it is a negative factor. This goal is partially achieved by incorporating investment products that have low correlation coefficient values, preferably negative values if you can find these rare opportunities. Low correlation coefficient pairs are the secret to proper portfolio diversification.
Enough theory, here is the Link to a site that provides a number of financial tools, particularly an easy to use correlation coefficient calculator:
http://buyupside.com/calculators/stockcorrelationinput.php
The simple inputs can handle stocks, mutual funds, and ETFs. The historical data sets are automatically extracted from Yahoo! Finance. Please observe that the analysis can employ daily, weekly, or monthly data as a user option. This choice will make a difference in the computed correlation coefficient.
To illustrate, I did a few calculations using Hogan’s PIMCO Global Bond—Unhedged fund (PGBDX) and Vanguard’s S&P 500 Index fund (VFINX)) as an equity market proxy.
Using daily data for the three months ending yesterday, the PGBDX holding is a superior diversifier with a -0.638 correlation coefficient. Congratulations Hogan.
For the three months preceding the current three month period, the correlation coefficient was -0.926. That’s even better. Things change often, often rapidly, and sometimes for the better.
For the one year period before the current date, the correlation coefficient was -0.0397 using daily data inputs. That’s very much like a random behavior between the two units being examined. It is a given that statistical market data constantly evolves.
Let’s examine how data entry frequency alters this last finding. For the last year, using weekly pricing inputs, the correlation between the S&P 500 market proxy and the PIMCO product was -0.158. So the price series interval does make an impact, as expected.
If you use the referenced calculator, remember to select an interval that is consistent with your anticipated holding period. Short holding periods need the daily data; long-term holders should use the weekly option. Do not use the monthly data sets since the statistical accuracy will degrade because of an input paucity.
This stuff is great fun and just might enhance your portfolio performance. Diversification is a tool that you control and can be deployed to great advantage. In the investment universe, it is indeed a rare nearly free lunch. Just do it even if you are somewhat statistically challenged. You need not be an expert auto mechanic to be a winning race driver.
I hope you add the correlation coefficient calculator to your toolbox.
Thank you Hogan for inspiring this submittal.
Best Regards.

http://www.sec.gov/Archives/edgar/data/923184/000114420413032182/v346546_497.htm (individual)
http://www.sec.gov/Archives/edgar/data/923184/000114420413032181/v346547_497.htm (institutional)
497 1 v346546_497.htm 497
SUPPLEMENT DATED MAY 30, 2013
TO THE PROSPECTUS OF MATTHEWS ASIA FUNDS
DATED APRIL 30, 2013
For all existing and prospective shareholders of Matthews Asia Dividend Fund - Investor Class (MAPIX)
Effective at market close on June 14, 2013, the Matthews Asia Dividend Fund (the “Asia Dividend Fund”) will be closed to most new investors. The Asia Dividend Fund will continue to accept investments from existing shareholders. However, once a shareholder closes an account, additional investments in the Asia Dividend Fund will not be accepted from that shareholder.
The following section entitled “Who Can Invest in a Closed Fund?” is hereby added to page 74 of the prospectus immediately before the section entitled “Exchanging Shares”:
Who Can Invest in a Closed Fund?
The Asia Dividend Fund has limited sales of its shares after June 14, 2013 because Matthews and the Trustees believe continued unlimited sales may adversely affect the Asia Dividend Fund’s ability to achieve its investment objective.
If you were a shareholder of the Asia Dividend Fund when it closed and your account remains open, you may make additional investments in the Asia Dividend Fund, reinvest any dividends or capital gains distributions in that account or open additional accounts in the Asia Dividend Fund under the same primary Social Security Number. To establish a new account in the Asia Dividend Fund, you must provide written proof of your existing account (e.g., a copy of the account statement) to the Asia Dividend Fund. A request to open a new account in the Asia Dividend Fund will not be deemed to be “in good order” until you provide sufficient written proof of existing ownership of the Asia Dividend Fund to the Asia Dividend Fund or its representative.
In addition, the following categories of investors may continue to invest in the Asia Dividend Fund:
• Financial advisors and discretionary programs with existing clients in the Asia Dividend Fund
• Retirement plans or platforms with participants that currently invest in the Asia Dividend Fund
• Model-based programs with existing accounts in the Asia Dividend Fund
• Trustees, officers and employees of the Funds and Matthews, and their family members
Please note that some intermediaries may not be able to operationally accommodate additional investments in a closed Fund. The Board of Trustees reserves the right to close a Fund to new investments at any time (including further restrictions on one or more of the above categories of investors) or to re-open a closed Fund to all investors at any future date. If you have any questions about whether you are able to purchase shares of a closed Fund, please call 800-789-ASIA [2742].

Hi Guys,
Annually we revisit the aging Wall Street adage to “Sell in May, and Go Away”. MFO contributor Skeeter posted on this topic in early May. There is ample historical data to support this proposition. It is all grounded in statistical data sets. The statistics are its basic strength, but also its inherent weakness.
Every May, we are persistently exposed to the fundamental data, both in the business media and here at MFO. Here is one sample media article that takes exception to the invented Sell in May guideline:
http://www.businessinsider.com/no-dont-sell-in-may-and-go-away-2013-5
The referenced article presents a 50-year data gathering effort. The study timeframe is an important parameter selected by the research team. To a large degree, it influences the specific findings, and in some less frequent instances, it establishes an outdated trend-line.
Unlike a mechanical system that has a reasonably understood and predictable lifecycle history, the historical database of a system, that is dominated by human decision making, by complex interactions, and by its perceived persistency, is highly suspect. A meaningful tradeoff exists between accumulating a statistically self-consistent data set and the degrading freshness of that same data. The financial marketplace is a dynamic entity influenced by both unpredictable endogenous and especially exogenous events like totally unforeseeable Black Swans.
For many investment studies, the bottom-line is that if the data collection period were modified, the findings would be changed.
But more significant for the purposes of this posting is the interpretation and the exploitation that this evolving calendar data permits. The exploitation is tightly coupled to the current economic, political, and financial environments, and the relative attractiveness of alternate investment options, like cash for instance.
It all depends on the potential payoff and risk matrices for the available alternate investment opportunities. I’ve assembled and now document a few tradeoff considerations from a variety of sources. The goal is to make more informed decisions and to accrue better returns during the typical mid-year equity doldrums.
First, let’s establish a target baseline. These data come from John Buckingham’s “Prudent Speculator” May newsletter. In rough terms, the October-April period has generated a 8.2 % partial annual return; the May-September period has added a more meager 2.3 % partial annual return to enhance the anticipated payoff to a 10.5 % annual long-term record. Given the very thin mid-year returns, a more diligent monitoring of overall composite environment (political, economic, international, financial) is mandatory in the summer time to protect our portfolios.
Second, given that the easily accessible alternate portfolio options of cash and short-term bonds are yielding below inflation rate returns, all other factors being equal and unchanged, staying invested in the equity markets is an obvious choice. The prospects for a 2 %-plus return for the quite period is a no-brainer over a likely 0.1 to 0.5 % return during that same timeframe from fixed income sources.
Third, various research findings have provided guidance for strategies to improve the expected equity baseline returns. For example, the pioneering Fama-French studies suggest that a portfolio with a value and particularly with a small-value orientation could augment the baseline rate of return by perhaps a 2 % increment. Buckingham’s studies, with a fresher set of data, reinforce the earlier work. His research also concludes that a portfolio constructed with the highest one-third of dividend paying stocks could outperform a non-dividend portfolio by another 2 %. Of course, these potential pluses are bounding numbers since a typical portfolio really should contain a more balanced mix of holdings.
Fourth, recent momentum studies suggest that a positive momentum early in a year, continues through the summer doldrums. Momentum persists in the short term (months). The likelihood that the equity markets will produce returns in excess of the historical record approaches the 80 % range (I lost the specific reference to that figure). Tilting the odds in your favor is always a good thing. Here is a Link to one optimistic assessment that illustrates the disparity in summer equity returns when cash has an attractive return and when it does not compete with even subdued equity rewards:
http://www.bellinvest.com/resource-center/publications/Sell-In-May-And-Go-Away
Fifth, the old saw that the market doldrums reflects the fact that the major market participants are vacationing is no longer valid. Two distinct factors have altered that interpretation. The market trading is now controlled by institutional agencies. Individual investors were 70 % of the trading volume two decades ago; today, 70 % of that activity is generated by the gigantic professional units. These agents never go on a holiday. Also, even when a trader is vacationing or away from his office, the modern computer and communication tools permit, in fact encourage, trading from anywhere and at all times. Traders never rest.
Sixth, a plethora of academic and industry generic studies have demonstrated that both a passively managed investment portfolio and attention to low cost investment control improve expected returns. This is especially applicable when operating in an anticipated low return environment. Any incremental cost drag pulls the net return downward a disproportionate percentage.
Because of these factors, and likely many others that escape me, it is my opinion that the “ Sell in May, and Go Away” axiom is not currently functional in our present marketplace. At least for now (things change), it belongs in the dustbin of history. Both strategic and tactical investment policies depend on circumstance, technology, and changing demographics. Nothing is invariable; stability in the marketplace seems to be an oxymoron.
Since my portfolio already reflects most of the elements I discussed, I’m simply standing firm. I will definitely not sell in May and not go away.
Please comment and share your opinions.
Best Regards.

I couldn't agree more. Problem is there are enough uninformed people in this world who believe there are easy way to financial security, i.e. free lunches.

Once Again Hi Guys,
In haste to deliver my promised report on the annual Las Vegas Money Show, I totally failed to communicate an additional observation that I feel is pertinent because it represents a significant sea change.
It is the evolving story about the investor-group changing demographics and the ubiquitous integration of computer technology into the investment process, both in the selling and buying of financial products. There were several tidal shifts noticed at this money gathering event.
Although the average conference attendee is still a senior citizen, an undeniably younger cohort is now more fully represented, is well informed, and is loaded with high tech gear. They multitask with ease, and are both intuitive and disciplined decision makers.
To illustrate, while listening to Marilyn Cohen pontificate on the marketplace’s present Bond dilemmas, one such “Digital Cowboy” seated next to me was searching and denoting stock charts while simultaneously directing a partner on the phone to make a purchase. He even took a timeout from his technology gadgets to ask Cohen a very intelligent and provocative question.
More power to him. If he’s one side of any trade deal, as a competitor, the other side trader is in deep water indeed simply considering currency and likely agility. I would have great difficulty keeping the pace. Fortunately, I do not compete in that rapid-fire exchange.
The presenters have also gone high tech. The presentations themselves are smooth as silk aided by stunning visual materials. Many of the presenters giveaway copies of their work on memory sticks (thumb drives) or on DVDs. Note taking is not now necessary.
Additionally, the analytical methods have become more comprehensive and definitely more complex from a mathematical perspective. A few presenters at least talked about combining their multiple trading signal indicators using more formal methods like Kalman filtering. The weighting function would be done using statistical accuracy and standard error data sets.
Mike Turner from CycleProphet uses a Fourier analysis procedure to reproduce past performance data with a 90 % matching accuracy requirement. He believes equity prices have an embedded cyclical character. Turner keeps adding terms to his Fourier series until he reaches his 90 % criteria, a very computer intensive effort. He projects market and individual stock performance for a 90-day forward-looking period and updates that projection daily with a Bayesian-like adjustment.
That’s a very sophisticated and a very costly service. Regardless of its eloquence, I still classify the procedure as complex curve fitting. The analysis should improve performance for short time horizons; I have no idea if it will be successful as that time horizon expands.
The concept is mathematically sound, but do these cycles really exist? Do exogenous events enter the skirmish to disrupt any meaningful cycle persistency? To borrow and distort a line from the ancient Shadow radio show, “Who knows what evil lurks in the market’s mind”? The radio’s answer was “The Shadow knows”. Perhaps Turner knows; perhaps he does not.
That’s enough for now.
Thank you for taking time to examine my Las Vegas Money Show review.
Best Wishes.

Hi Guys,
My wife and I returned late yesterday from our combined Utah parks tour and attendance at the annual Las Vegas Money Show. Both were exceptional experiences. Zion, Bryce, and Arches parks remain surprising even after several visits.
At the Money Show we separately and together attended 25 presentations. A few disappointed, but overall, the material informed and the talks were superior. Away from the formal meetings, I managed to talk one-on-one with James Stack and Jack Ablin. Between sessions, I shared somewhat divergent opinions with three financial advisors from three separate parts of the US. Great fun.
This year, the Las Vegas edition of the Money Show attracted over 7,000 folks, mostly active traders. That’s down from a peak of over 10,000 attendees several years ago. The program organizers announced that individual stock ownership has dropped from about 65 % of the adult population to roughly 52 % currently. The memories of the 2008 meltdown have not yet been completely erased.
To observe that individual opinions are distinct and somewhat divergent is an understatement. The interpretations of identical data wildly diverged. There surely was not a universal consensus, and just as assuredly there were no Las Vegas eureka moments.
Since I believe in the inductive logic chain for decision making, I seek and evaluate diverse opinions. They contribute to my investment decisions. Majority perspectives should not automatically carry the day. To a scientist, a consensus is not necessarily a good thing. Challenging conventional wisdom can promote research and better understanding. In the investment world nothing is forever.
In the 1830s, after touring the US for several years, Frenchman Alex de Tocqueville wrote: “ The French, under the old regime, held at for a maxim that the King could do no wrong. The Americans entertain the same opinion with regard to the majority”. In his book, de Tocqueville purportedly formulated “The Tyranny of the Majority” rule. That is a very dodgy trait given the often demonstrated actions of crowd (mob) misbehavior.
Total consensus is also a hazardous thing. It is the stuff that directly leads to the tyranny of markets. If everyone simultaneously approaches a 100 % consensus that is the substance of panics and manias. Fortunately that happens infrequently in the pragmatic marketplace.
When everyone is on the same page, a dramatic change in direction is increasingly likely; essentially, it is an unstable equilibrium. If everyone is committed to equities, one minor event, rumor, or falsehood is likely to trigger a tipping point that cascades into an avalanche of either sells or buys. The direction doesn’t matter; the mob psychology carries the day.
Remember that’s what happened just before the Great 1929 stock market Crash when sophisticated market wizards like Irving Fisher and John Raskob made egregious misdirected predictions. Both these gentlemen had a lot of explaining to do to salvage their self-inflicted damaged reputations.
Forecasting is definitely a treacherous business. Nobody hits the mark consistently. On occasion, a random success leads to unwarranted adulation until the next forecast turns south.
As early as 1932, Alfred Crowles asked and answered the ubiquitous question within the investment community: “Can Stock Market Forecasters Forecast?”
Crowles performance data sets included individual market experts, media pundits, the Dow Theory itself, and insurance companies over an extended timeframe. His study findings were negative among all groups. He found little evidence of skill, and attributed its much fewer successes to luck. Financial forecasters in yesteryear share the same abysmal record as today’s experts.
I assembled this brief history as prologue to my informal survey conducted at the annual Las Vegas event.
My burning question when joining the conference was “what are the likely equity market rewards for the remainder of the year”?
Not unexpectedly a consensus was not reached. In a restricted sense, that’s goodness since it shows independent thinking and some distancing from any group-think mentality.
The overarching summary is that a much more numerous cohort, using economic, political, and financial convictions, anticipate a continuing bull market.
The optimistic side team members include Steve Forbes, James Stack, Ron Muhlencamp, Hillary Kramer, Louis Navellier, Jack Ablin, John Buckingham, and a host of others. The May 13 issue of Barron’s headlined “This Bull has Room to Run”. The Investor’s Business Daily also currently rates the equity markets as a “confirmed uptrend”. All these positive outlooks cautioned against sudden political and economic reversals so they seem timid when contrasted against the other side’s views.
The pessimistic group is vigorously represented by a numerically smaller, but more firmly committed, cohort that includes Alex Merk and Peter Schiff. Based on his assessment, Peter Schiff has replaced Nouriel Roubini as the new Doctor Doom.
Everyone sees a long-term financial crisis caused by excessive government printing money without commensurate productivity gains. This is not a Black Swan event; it is foreseeable. The pessimists predict a cliff. The optimists allow for a gradual descent, with demographics and productivity growth mitigating the downturn. Construct your own scenario.
A sector rotation strategy appears to be the composite wisdom of the professionals. Many money managers emphasize sector rotation to enhance returns during different segments of a maturing bull market. Most concurred that the present equity markets are getting late in the bull cycle.
Given its current age, James Stack recommends a rotation into the Healthcare, Consumer Staples, and Utilities sectors. Historically these play solid defense coupled into a safety-first strategy.
Still market positive, but also in a defensive framework, economist Mark Skousen endorsed the Baron Growth (BGRFX) and the Permanent Portfolio (PRPFX) mutual funds, and the Aberdeen Asia Global Partners Income Fund (FAX) and the Eaton Vance Floating Rate Income Trust (EFT) as part of an income protection portfolio. I have not researched these recommendations myself.
Louis Navellier is the single, most impressive stock-picker I currently follow. Mark Hulbert has evaluated Navellier’s newsletters and mutual fund performance for years. He has consistently scored Navellier highly both on an absolute returns basis and on a risk-adjusted scale. Let me report two takeaways from his Las Vegas talk.
First, Navellier recommends to stay completely away from International holdings. The risk-reward tradeoffs are far too asymmetrical. In a relative sense, the US equity marketplace is in a sweet-spot with an accommodative Fed and a strong US dollar.
Second, you can get free access to Navellier’s stock judgments. He assesses countless stocks and his website includes a comprehensive set of data and astute scoring. His web address is:
http://navelliergrowth.investorplace.com/
Enter the stock symbol (or symbols with a space between them) in the screen place indicated. That will get an overall score. For a more detailed profile, click on the symbol in the overall score box. The assessment as a function of time is particularly useful to establish a trend.
Another separate aspect of the Money Show is the numerical distribution of sponsors. One way to gauge the current investment climate is to simply count the number of presenters in any investment category, and the number of stalls purchased in the main exhibit hall.
Energy exploration and pipeline Limited Partnerships were plentiful. Natural gas was heavily supported. A few Real Estate outfits were represented. A larger than usual number of wealth management services were proffered. In general, these varied investment “opportunities” increased over last year’s Money Show sponsors.
That’s my incomplete summary of the Vegas sessions. Given the communities uneven forecasting record, a vigilant investor must receive their projections with measured skepticism.
It’s always a prudent policy to put things in context. Mark Twain cautioned that “whenever you find yourself on the side of the majority, it is time to pause and reflect”.
I hope this summary is useful.
Best Regards.

http://www.sec.gov/Archives/edgar/data/1105128/000145079113000102/rule497e.htm
Scout Funds
Scout International Discovery Fund
Supplement dated May 16, 2013 to the Prospectus dated October 31, 2012, as revised April 11, 2013
Upon the recommendation of Scout Investments, Inc. (the “Advisor”), the Scout Funds Board of Trustees has adopted a Plan of Liquidation to cease operations of the Scout International Discovery Fund (the “Fund”) and liquidate the Fund. The Advisor has determined that it is no longer economically viable to continue operating the Fund in view of its size and future prospects for growth. The liquidation is expected to be completed on or about June 28, 2013.
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Reply to @AndyJ: Not really sticking up for the PBS shows, but is PBS unique in bad financial and economic reporting? I'd actually take Suzie Orman any day over watching Cramer's circus antics or Kudlow's daily political rants.

Reply to @bee: I like that term financial gridiron.