Hi Ted,
Thank you so much for reposting a reference to the recent British investment video.
It is excellent in terms of its message, its impressive financial cast of contributors, and its overarching clarity. Its only potential shortcoming is that it was funded by a British money management firm so a conflict of interest may exist. Incentives always matter.
I linked to this same video in a short piece that I submitted in mid-February. I was replying to an earlier Link that you provided with regard to some comments by Morningstar’s Don Phillips.
My reference goes directly to the video. For completeness, here is the internal Link to my February post:
http://www.mutualfundobserver.com/discussions-3/#/discussion/5482/a-british-view-of-the-passive-active-debate
As I mentioned in that post, the video is of superior quality and is a great one-hour introduction into the fund industry for neophyte investors; us senior citizens might also learn a thing or two. On second thought, we veterans are so smart and so well informed that the likelihood of learning anything actionable approaches zero (this is an attempt at a little humor).
Once again, thanks for highlighting this fine film. A review is always rewarding since time works to alter viewpoints.
Best Wishes.

I don't think taxing Roth idea would have a high chance of succeeding. The political outrage would stop any politician. Besides financial industry has vested interest in keeping the status quo and they have strong lobby power.
Now, they may choose to restrict contributions (income limit) or eliminate any new contribution but existing monies will be grandfathered.

>>>>>>It relates to the poor timing instincts of entry/exit points that investors consistently demonstrate. The generic explanation is that individual investors succumb to a host of behavioral deficiencies. Bogle postulates that the trade-anytime feature of ETFs allow easier access to these behavioral flaws.<<<<<
BINGO! And the very reason I abhor ETFs so much. I wrote back in the the late 90s how trading open end funds imposes a much needed discipline upon traders i.e. it prevents them from making bonehead intraday moves.
By the way, this may surprise you being that I so disagree with your contention we should all become robotic and passive indexers. I spoke at a seminar in 1999 and tried to open the eyes of all the dreamers out there thinking they could handily beat the markets and trade for a living. I listed all the statistics about how difficult it is to beat a passive buy and hold strategy. I quoted the research from DALBAR Financial Services, Barber and Odean, as well as a lot you have missed ala the performance of the real money timers tracked by MoniResearch as well as the performance of the newsletter timers tracked by Hulbert to name just a few. In theory I agree 100% with you. But......

Hi Andy,
On the main page of their web site, you can get an idea what a model portfolio would look like by selecting the account type and your age. It's a new company so they don't have any actual performance data for the model portfolios. Also, they are a software-based financial advisor, so no prospectus is needed.
I may send them the minimum just to see the actual recommended portfolio and see how it performs going forward. Then if I'm pleased with the performance, I will send them over $10K as they deserve to be paid for their services, and 0.25% is not much if it includes transaction fees.
Kevin

Reply to @perpetual_Bull: My point was, I would probably be a 66 year old bag boy at my local grocery store had I heeded the conventional wisdom of the John Bogles of the world when I was younger. Namely, the best you can do is surrender and just mimic the indexes by being a passive and somulent investor.
I just happen to believe that if you are someone like myself with limited skills, abilities, and intelligence, that the only way to achieve one's financial goals is by a 110% total commitment to the process. One of my favorite books, Secrets of the Millionaire Mind (T. Harv Eker) covered this topic extensively. I wish that book had been published long, long, ago when I was a struggling trader for more years than I care to remember.
Even if you factor in my taxable account to the IRAs you referenced, I am by no means rich but simply a small-time, Average Joe Trader who over the years happened to be at the right places at the right times and took the required actions. I would much rather be lucky than smart.
Oh yes, my blood pressure is just fine. Probably because I find time to run five miles on an almost daily basis.

Reply to @msf:
Hi msf,
Thank you for the excellent reply to my post, and for the diligent work that you did to access a summary of Odean’s earlier research.
I too much admire the collaborative studies that Brad Barber and Terrance Odean complete. This pair gets considerable mileage from their work. The foundational data sets have traveled extensively. I suspect that the numbers that I cited are contained in this later version of his original thesis studies:
http://faculty.haas.berkeley.edu/odean/papers current versions/doinvestors.pdf
I said “suspect” since I did not directly quote from his original report. I lifted the specific values from Chapter 13 of Charles Ellis’s book “Winning the Loser’s Game”. Ellis provides a convenient summary that is easy to understand. But it is a secondary source so errors are possible.
The Link that I referenced has one of Odean’s observations that my wife truly treasures. He concludes that “Using the same data, Barber and Odean (1999b) find that men trade more actively than women and thereby reduce their returns more so than do women.”
Professional money managers do have a competitive edge over private investors. Recall that I noted “In truth, it is likely that the pros do not suck as much as we do. Often the pros do outrun market returns.”
But it is a hard battle for them since they are now mostly matched against a smart, skillful, fully funded research, committed opposing professional team with huge financial incentives. It’s like two superb pro football teams neutralizing each other’s superior talents, and ending the game in a scoreless (zero Alpha) tie. Ugh!
The second reference that I provided addresses this aspect of the equity universe. In general, these professional outfits do not add sufficient excess returns to offset the added costs of their operations. The institutional tide is definitely moving against the active investment community.
Like you, my portfolio is populated by some actively managed assets that feature low cost operations, a rather infrequent trading profile, lower turnover rates, and seasoned managers. I hold these positions for lengthy timeframes to allow market cycles to test these managers. I do eliminate poor earlier choices.
But my portfolio also contains a mix of passive Index products. These lower my cost structure still further, and add stability to the overall portfolio performance. The record suggests that I am mildly successful using my style of portfolio management and risk control.
Again, like you, I believe I’m a Lake Wobegone resident. Of course, constant monitoring is the penalty for that residency since outcomes can change super quickly.
Best Wishes.

Reply to @Hiyield007: The financial that I continue to look at is Fiserv (FISV). Not a "value", but a financial services co that held up reasonably well in 2008. "Fiserv is a leading global provider of financial services technology serving approximately 16,000 clients worldwide. The company provides account processing systems, electronic payments processing products services, internet and mobile banking systems, and related services. Fiserv handles more than $1 trillion in payments and manages more than 20 billion digital transactions annually."
A bet on services all banks need, as well as evolving tech (mobile banking, etc.) If only it paid a dividend...
Just my 2 cents. Betting on specific banks may pay off more if things continue, but I suppose the idea of betting on services all banks require may be a tad less volatile over time.
Additionally, Whitney apparently also likes Discover (DFS)

http://online.wsj.com/article/SB10001424127887324392804578360800747665608.html?mod=ITP_moneyandinvesting_0
If you cannot access the article through above link try the following Google search:
https://www.google.com/search?q=Fidelity's+ETF+Fee+Spurs+a+Backlash

Fidelity on Wednesday announced it would begin offering 65 ETFs from BlackRock Inc.'s iShares unit without charging customers a trading commission. The deal expands a previous agreement involving 30 commission-free ETFs.
But the Boston money manager is tacking on an additional fee of $7.95 a trade to investors who sell the ETFs within 30 days and to financial advisers who sell within 60 days.
Advisers also complained that Fidelity replaced 10 of the commission-free iShares ETFs on its previous menu. Nine of the new ETFs have lower trading volumes, suggesting they are less popular with investors.

Here is link to Fidelity about the iShares ETFs: https://www.fidelity.com/etfs/ishares

Note: A short-term trading fee of $7.95 will be charged for any sales that occur within 30 days of the original purchase of the ETF. This fee is being waived for all customers through July 31, 2013.

Reply to @Art: Stay the course ! The market will be higher at the end of the year than it is now. How about a health care, technology, financial fund ?
Regards,
Ted

Hi Art,
You ask the perennial investors question. No forecaster ever has the absolutely correct answer since nobody is perfectly prescient or omniscient. Wall Street is littered with fallen experts who had momentary success, but failed to repeat.
This is not a current observation. Market forecasting experts have been doing the public a measurable disservice for over 80 years. As early as 1932 Alfred Cowles published his analysis of the inability of forecasters to forecast. Here is a Link to his classic paper:
http://cowles.econ.yale.edu/archive/reprints/forecasters33.pdf
Perhaps the best advice to be given is too not trust professional forecasters of any persuasion.
Bad decisions and Black Swan events happen everywhere. Bad decision making and Black Swan events happen more frequently in both the professional and amateur investment universe.
Indeed I did write "that individual investors make poor timing and product selection decisions". That’s not just me making noise; I am merely reporting investment industry research on investor outcomes.
To put a hard edge to my assertion, allow me to quote a summary conclusion from the 2012 DALBAR QAIB report (their 2013 report which will incorporate data through 2012 will be released shortly).
From DALBAR, their devastating overarching observation is "that individual investors make poor timing and product selection decisions". That’s bad news for the “average” investor. DALBAR finds that the average private equity investor lost 5.73 % in 2011 while the S&P 500 was delivering a plus 2.12 % return. Similarly, the average fixed income investor was only getting a 1.34 % reward while the Barclays aggregate bond market was generating a 7.84% annual return.
The fractional individual investor outcomes relative to what could be achieved from a simple buy-and-hold passive Index investment strategy is persistent over long timeframes. DALBAR demonstrates that the average private investor underperforms these standard benchmarks for 1-year, 3-year, 5-year, 10-year, and 20-year study periods. The average investor plays the Loser’s game. Charles Ellis addresses this issue in his 1998 book “Winning the Loser’s Game”.
Note how I kept emphasizing the “average” investor statistic. I truly do not believe that MFO members are average investors. Although we may not satisfy the Lake Woebegone standard of everyone being above average, I suspect we are as a cohort above the average mutual fund investor. Dissenting opinions to the contrary are invited. That’s why I am at full attention to mutual fund recommendations and analyses offered by MFO itself and MFO participants.
I score my portfolio holdings against relevant benchmarks on a quarterly basis. Like everyone else, even after careful research and review, I have made bad decisions. Although I infrequently adjust my asset allocation, and when I do, I do so in an incremental fashion, I do constantly search to upgrade poorly performing individual fund holdings.
Certainly, if a fund changes its management, or changes its investment strategy (like morphing from a concentrated to a broadly diversified portfolio), or changes its fee structure, or changes its trading frequency, divestiture decisions are easy if these changes nullify my reasons for initially committing to the fund.
Another more common reason is if the questionable fund consistently underperforms its appointed benchmark. This is not quite so easy a decision since the allowable underachieving time span is a debatable issue; the marketplace might just have momentarily gravitated away from the manager’s style.
So I constantly upgrade, but I am not putting any additional money into the markets. I am not moving into fixed income either; the payouts are barely keeping up with inflation. Our family situation likely differs significantly from most present MFO participants, and that difference is important. Our plans and needs are definitely not yours. However, we are not now abandoning the equity marketplace.
Both my wife and I have been taking MRDs (Minimum Required Distributions) for years and our portfolio’s value has continued to increase. Given our ages, our portfolio structure, and our withdrawal rates, the likelihood of our portfolio survival rate based on Monte Carlo simulations approaches 100 % (never exactly 100 % since it’s a probability estimate). Our portfolio can handle a major market hit and we would still not be in a financial danger zone.
Given our circumstances, our decision is to stand fixed with our slightly upgraded portfolio. The majority of the signals that we use to gauge the equity market’s health (momentum, GDP growth, P/E ratio, inflation) remain positive. This year’s early equity gains are a little disquieting, and a minor retrenchment would not be surprising.
Black Swans happen with lightening speed, so dedicated vigilant monitoring is the order of the day. That never changes.
In no way do I recommend our course of current inaction to you guys. Each of you is the captain of your own ship and must plot your own compass headings to reach safe harbor.
Good luck to all of us since bad weather is difficult to forecast with high precision.
Best Regards.

I am not sure I understand this right... Roth accounts are individual accounts. They are not shared like a bank account. If it is an account held at a Financial Institution for him/her, you don't have any legal claim. So, you have informal agreement.
Legally, when he cashes that out, if he/she gives you the money, he/she will be gifting to you and declare it to the IRS (well provided that it is done in a way according to the letter of the law).
From: http://www.mondaq.com/unitedstates/x/215816/inheritance+tax/Significant+Estate+Planning+Developments+in+2013

Gift Tax Exclusion. The Act makes permanent the unification of the gift and estate tax exclusion amounts. This means that in 2013 each person can make lifetime gifts up to $5.25 million without paying gift tax. However, all gifts that use a portion of this gift tax exclusion will reduce the donor's estate tax exclusion available at death. For example, if a parent makes a $2 million lifetime taxable gift to a child, the parent's remaining estate tax exclusion amount is reduced by $2 million at death.
The lifetime gift tax exclusion only applies to gifts in excess of the annual gift exclusion (i.e., the annual amount a person may gift to any person tax-free). For 2013, the annual gift exclusion is $14,000 per person (or $28,000 per married couple).

But I also do not understand why you are waiting for his retirement. He can get all the money from a Roth IRA without any penalty after 591/2. Or, is this a Roth 401k? Then, he might have to wait for retirement for funds to be available but again in a Roth IRA account, he can withdraw the money now without any penalties or taxes.
As for good funds you seek, I suggest you take a look at:
VWINX and GLRBX

Bob C makes a really good point (in the form of a question)...have a plan as to, what will you do with the "profits". Profits are in quotes because they are only profits if you take them. I have lost my share of 'profits" along the way due to not having a plan for the profits. I have spent some time thinking through this little understood dynamic...not so little when you think about the reason you and I invest...to make some "profits"!
I like the idea of paying down debt with profits...corporations do this everyday and we applaude them for their "concern for the company". Remember your household is like a company. You probably have a number of holes in your overall financial picture you'd like to make whole...maybe its a lack of good healthcare or life insurance or long term care insurance. Maybe you need to set up a wedding fund for your kid whose is shacking up with her boyfriend. Maybe your driving around in a 20 year old beater. We all have plenty of holes to fill. Profits should help us fill those holes.
A few years back I refinanced my home that I held nearly debt free. I got a 4% loan that is now tax deductible and I invested the cash. I purchased a condo in Florida 2 miles form the beach for 1/5 the market price of 2008. The home I refinanced will soon be rented to cover the mortgage and provide a little retirremnt income. Restructuring debt for me was like taking profits because I had created a plan.The cash was king when I negotiated with the seller of the condo. Additional cash went to work in equities that were a lot lower than they are today. I am now in the process of taking profits and paying off a portion of my home debt with profits. Investing is a patient process and requires us to be able to identify value. But when value eventually presents itself as profit we need to have a plan for those profits.
Like savings, profits should help you diversify, stablise, and pave over the pot holes in your financial road map.
Good Luck!

Reply to @hank:
Hi Hank,
Thank you for your rapid, kind, and informative reply to my late contribution. I appreciated it, and surely all MFO forum participants will appreciate it. It added a deeper diversity of opinion to the discussion. We all benefit from that.
The primary purpose of my submittals is to identify and possibly suggest investment tools that might contribute to a better market understanding and a more informed general portfolio assembly.
I try very hard to be as neutral as possible with all my postings relative to everyone’s specific portfolio holdings and potential actions with that portfolio.
I simply am not qualified to propose specific portfolio recommendations or changes to an asset allocation plan. I do not know enough about the very special circumstances of anyone’s financial position and life status to be comfortable providing such bold advice. So I typically punt on that issue.
I like to characterize myself as a laidback, relaxed investor. I’m from Southern California so I fit the stereotype. For example, I do deploy the statistical metrics that I highlighted for VirtueRunsDeep, but I do so in a non-formulaic manner. I do not rigorously weight each factor that I scan; I softly assess the overall picture these metrics paint.
Given that I believe that the MFO forum is populated with very well informed investors, if I were asked to assess the current portfolios of any member, I would judge their overarching holdings to be just perfect for them. I anticipate that each member’s portfolio is properly assembled to satisfy their very specific and personal needs.
That philosophy is equivalent to the reply I would give to a question about the correct size of any community. In my opinion, the proper first-order response to that question is “its current size”. Some incremental changes might be warranted, but folks naturally reside where they are most happy or where circumstances demand. Likewise, investors naturally gravitate to a portfolio that is most satisfying to their many needs and objectives. A natural equilibrium is established; water seeks its own level.
Again, thanks for your thoughtful commentary; it helped crystallize my positions on the subject matter.
Best Wishes.

Reply to @JoeNoEskimo: When I saw this on Google News today, I looked at the article and got curious about the site. They call "John Birch Society" as their affiliate. Here is their staff. Robert Adelmann is the guy that wrote the article, also a JBS and NRA member.
So, it is kind of a propaganda article and title is chosen that way.
The private second has been actually adding net jobs. Government sector (both local, state and federal) has been steadily the counter trend (i.e. job losses). In the last 4 years Government sector has lost a lot of jobs.
In any case these weekly/monthly reports is less significant but the overall trend is been pretty much steady. It is a slow recovery but not unlike other deep "Financial" crisis.
If you really care how the Unemployment situation is, here is a good site to read about it. With numbers, charts and everything.
http://www.calculatedriskblog.com/2013/03/employment-report-comments-and-more.html

Since my edit feature just does not seem to want to function this morning I have posted this quote from his review. Eddy likes Apple and XLF.
"Despite the massive flameout in many financial stocks, the current environment is ideal for investing in financial firms. Eighteen months ago, I said that the Financial Sector ETF ($XLF) was “a speculative buy if it drops below $12 per share.” It did, and today the XLF is over $18. As well as it’s done, the fundamentals of the financials are still remarkably strong."
Skeeter

I bought Hennessey smallcap financial 1 or 1 1/2 year back with the same thought and made 25% since then. Largecap financial may be a good bet compared to smallcap but this manager is a reputed and holds good %age of cash for downside protection when things are heating up.

Financial Stocks or could just buy VFH

Here's a look at the lifetime stats of the funds recommended so far in this thread. I added a couple others, FPIVX and WGRNX. Note that every fund on list existing before 2008 drew down 50-60% during the financial crisis. So, just beware and allocate accordingly.

Of the younger ones, I like FMIJX and FPIVX for international and SFGIX for EM. David has profiled all three: Intriguing New Funds.