FYI: Investors are puzzling over the apparent paradox presented by the combination of stocks trading at or near all-time highs and a Federal Reserve that appears ready to deliver an imminent rate cut.
A look back at history shows that the Fed has been willing to cut rates with stocks at or near all-time highs in the past, but it’s a phenomenon that hasn’t been seen in more than 20 years. Market analyst Charlie Bilello last week noted on Twitter that since the Fed started targeting the fed-funds rate in 1982, it has delivered rate cuts with the S&P 500 SPX, -0.12% at an all-time high seven times — the last such cut occurring in January 1996.
Regards,
Ted
https://www.marketwatch.com/story/rate-cut-with-stock-market-at-all-time-highs-its-been-done-before-2019-07-15/print

FYI: Investment time horizon is a critical concept in building wealth. Most investors have very long investment time horizons, typically decades or more. Investment managers also require long time horizons to deliver on their investment thesis. Finally, stock market volatility diminishes substantially over time, with a 75% decrease in variability for 10 years versus one year. As a result, developing patience and a long-term perspective are key to building wealth. We are living longer and need to invest appropriately. Even at age 70, the investment time horizon is more than 20 years.
Regards,
Ted
https://www.advisorperspectives.com/articles/2019/07/15/long-term-is-longer-than-you-think

It has been an amazing year for bonds. So much so that MAINX lags iin its category (emerging markets bond) and in the 75th percentile. One of the best in that category over the past three years has been Vanguard’s VEMBX and it is up over 14% YTD.

While I don't own it, BFOCX, Berkshire Focus Fund, has been on my radar.
Yes, the fund has high turnover/high fees, but the fund has performed well over last several years.

From a slightly different perspective: You can’t determine how much to set aside until you figure out where you’re heading after retiring. I agree in playing with different simulators as an educational experience. I sure did in the last 2 or 3 years before jumping ship and retiring, and also for 2 or 3 years after retiring as things were still falling into place. I did a lot of experiments with compound interest calculators and with the numerous suggested allocation models that existed online back than. Most fund companies had one of their own or had access to one. American Century’s proved especially helpful to me. Surprisingly, back than suggested allocations for those in or near retirement differed quite markedly from model to model. So in the end, a lot was left to the individual to work out. One suggestion for those facing retirement in the near future is to “look under the hood” at some of the “funds of funds” (like at T. Rowe) and observe how their managers allocate various assets for different life scenarios (generally expressed in a range of options from conservative investor to aggressive investor).
The simulators mentioned by both the article and @MJG and others all sound very useful in this regard. After you’ve been retired for several years you should have a good handle on how you’re faring, so I think simulators become somewhat unimportant. Rule #1 - Don’t quit a good paying and relatively secure job to transition into retirement unless you’ve run some simulations and are confident you have “all your ducks lined up”. Generally it’s better to err on the side of working longer and spending less in retirement than the other way around.
There’s much you cannot simulate ahead of time: Will you still be healthily enough or feel like working part time during retirement? What will taxes be? Will you or your spouse encounter unexpected health expenses? What will the inflation rate be? What type of returns will bonds and equities be yielding during retirement? What will your equity stake in your home be worth? How high will interest rates be if planning to use some of your home equity? What standard of living will you be comfortable with? And the “granddaddy” of all - How long will you live? Still, the unknowns persist. Few could have foreseen the financial collapse of ‘07-‘09 and the long term consequences for financial markets and investors. And how many models work with both the Traditional IRA and the Roth IRA (as well as a combination of both) during retirement to anticipate your outcomes? There’s a big difference between the two in how your standard of living eventually evolves.
I think a lot of simulators are “bottom up” in approach. They look at what your needs will be and than attempt to arrive at an investment strategy during retirement. I tend to focus more on a “top down” approach. With that approach one pays close attention to shaping an all-weather portfolio and financial plan that has a good chance of keeping pace with or outrunning inflation. That means that if inflation is running at only 1-2% during certain retirement years, you’ll be earning less on your investments. However, should it run at 7, 8 or even 10% your investments will by and large keep pace and protect you as much as possible. Caveat: Don’t trust the greatly understated government inflation numbers. It’s your inflation (as actually experienced) that counts. Not theirs.
@MJG - you were once known for rather verbose submissions. I assure you I’ve greatly outdistanced anything you ever achieved in that regard with this rambling (possibly nonsensical) one. :)

I wish something like a “10% Rule” was common knowledge when I started working in the 1970s. Nobody talked about saving for retirement then, and the stock market was considered a risky gamble. You could earn 12% interest from a money market account and my friends were more concerned about buying a car or house before prices went up again.
I didn’t start saving for retirement until my mid-30s when my employer started a 401k Plan. I contributed the amount that my employer would match, probably about 3% of my salary. I invested it all in cash and bonds because— again— stocks seemed like gambling. My employer provided no guidance or education about investment options, diversification, etc. Fortunately bonds did well during that period and even money markets paid 5-6%.
I finally got educated about investing when I left that job and rolled over my 401k and pension to an IRA. I was about 40 by then and immersed myself in financial literature. I invested the bulk of my savings in a diversified collection of stock funds, with a few bonds for safety, and never looked back. I increased my savings to about 10% of my salary including the employer match, and it all turned out OK in the end. For the last 20 years of my career, my employer had a pension but I kept contributing to a 401k, so my savings were closer to 15-20% of my salary— through my own ignorance because I didn’t realize that the pension was equivalent to saving about 10%.
Bottom line, for young workers or older ones who aren’t saving yet for retirement, the 10% Rule is a pretty good guideline for getting someone started in investing.

The article isn't too bad, as far as facts and figures. Perhaps it will cause a few readers who stumble across such a write to be more involved with their financial future.
So, before folks run to a "SIMULATOR" to determine the yet unknown they first must have a "STIMULATOR". Without a stimulator to help with motivation to save, there will be no need for the simulators.
So, let us count the ways. I've been pushing folks for 40 years to invest some of their wages; including the current campaign of setting up minor ROTH IRAs.
The "stimulator" has been in place with simple facts and figures.
The results have always been disappointing.
Boomers always seemed to want other stuff for "today's wants". Their children were not much different. In both of these groups, at least most were married and dual income households. But, the remaining free monies for investments (401k, 403b, simple IRA and then Roth IRA) were few.
The overwhelming response was the "markets" were too complex and they were not willing to use small pieces of their time to learn.
More recently, being since the market melt; finds remaining damage to household finances and problems finding jobs that pay a decent wage. This current period also contains those who do not trust market investments.
So, there are those households who have the monetary ability to invest; but still do not take any actions.
Ten percent of base pay seems are reasonable and easy path with which to begin; but I still don't see enough takers among educated and well paid 50 year old folk today.
Pretty sad and frustrating to and for me.
Good evening,
Catch

The other link to this story seems to have been deleted now. Myself, Ol Skeet, msf (and perhaps others) had commented on it. As I mentioned on that thread, interest rates have pretty much been trending downward since the early 80s when Fed chair Paul Volker jacked up short term rates to stop runaway inflation. The 10 year treasury topped out north of 15% around than. As we know, declining rates increase the value of longer dated bonds, while rising rates work against bond values. So we’ve had nearly 40 years of favorable rate trends for bond investors (more than half the lifetimes of many of us).
Paul Volker didn’t do this alone. There was the financial crisis and global market meltdown of ‘07-‘09 which compelled central banks to push rates lower by assorted means. Inflation has been subdued thanks to retail giants like Amazon, less powerful labor unions and relatively cheap energy - due to fracking and other advances. Low inflation generally translates into lower interest rates (and improving bond values). Additionally, upward pressure on rates from the baby boomers buying first homes in the 70s and 80s has abated - helping drive rates lower as well. All good if you invest in longer dated high grade bonds.
The lower-quality bond market (ie: junk) has been helped by a record 10+ year U.S. economic expansion and bull stock market which finds itself 3 or 4 times higher than it was only a decade ago. Since lower rated bonds react (favorably or unfavorably) to overall economic conditions (and secondly to long term rates) junk and corporates have tended to follow the stock market higher.
The article is correct that the past 6 months have been “spectacular” for just about any type of bond / bond fund. Missing in the headline, but critical to the article, is that many prognosticators predicted rising interest rates for this year - while in fact rates have trended lower with the 10 year getting below 1.95% recently before closing above 2% at week’s end. I have no major criticisms of the article. However, unless you butter your bread on both sides by trading in and out of bonds - particularly the lower rated ones (as @Junkster does very well) - you probably shouldn’t be too focused on your 6 month bond return. Anything other than cash and ultra-short IMHO is best suited for terms longer than a year or two.
I’m glad Ol Skeet liked the article and kicked it over to the discussions + part of the board.

I own and like POLRX. Then again, why? Frankly, and this may apply to you, it shows up on lists of high performing funds. I track my funds on StockCharts.com and note that this fund is up 122% in five years (unfortunately, I haven't owned it for 5 years). I like that it is often in the top quartile of performing funds in its category. (TRBCX, another fund I've owned, is up 107% in five years). I just checked Morningstar which credits POLRX with having a formula that focuses on stellar high growth companies with little or no debt. Morningstar says this approach is intended to limit risk. We will see. On the caution side you should note that it has a portfolio of only 20 stocks (not a lot of diversification if they choose the wrong stocks). And note that the list of their stocks includes the same big name growth stocks that almost every other fund seems to own (Microsoft, Facebook, Alphabet, etc.). In summary, this is a high flyer that may flop big time if we hit a brutal decline in the market.

In my large/mid cap sleeve, found in the growth area of my portfolio, I own SPECX, AGTHX & AMCPX in the large cap growth space. All three of these funds are long term holdings, for me, with sizeable capital gains exposure should I choose to sell. However, I'm liking ESEAX which Ted posted an article on this morning as it appears to have the type of upside (and downside) capture ratios I favor plus it has low turnover. Atlanta Capital has a great small/mid cap growth fund (EAASX), closed to new investors, that has performed well over the years.

Thanks @David_Snowball for letting us know.
As I recall, Slick joined not long following the death of her husband, more accustomed to making the big financial decisions than she. She was a quick enthusiastic learner. Always most gracious in thanking each and every one who helped in the early going. And, as the years went on, she contributed greatly to the informed civil discussion that characterizes this board. Will be sorely missed.

Exactly. PAUIX's 20% short SPX position in a raging 'bull' market back then definitely dragged hard on it. I held it for a while during/after the GFC but dumped it once I realized they had no plans to reduce/exit that short position as the world around them changed..

Hi, Catch.
Two versions of the fund: All Asset and All Asset All Authority. Both have a contrarian bent (i.e., more value than momentum hence less US and more foreign than their peers). The difference is the All Asset All Authority is permitted both leverage and shorting, which I warned folks about many years ago.
The vanilla version has substantially and consistently outperformed the souped-up on. Peer comparisons are hard because M* has changed All Asset's peer group three times in 10 years but, in generally, it has been a very solid performer (a little below average to substantially above) except for one period of about 30 months (in 2013-15). All Asset All Authority has kept the same peer group, has never excelled and has frequently stumbled. I'm guessing, though without detailed examination, that that's the cost of leverage and shorting.
For me, that is brief.
David

Hi, Catch.
Two versions of the fund: All Asset and All Asset All Authority. Both have a contrarian bent (i.e., more value than momentum hence less US and more foreign than their peers). The difference is the All Asset All Authority is permitted both leverage and shorting, which I warned folks about many years ago.
The vanilla version has substantially and consistently outperformed the souped-up on. Peer comparisons are hard because M* has changed All Asset's peer group three times in 10 years but, in generally, it has been a very solid performer (a little below average to substantially above) except for one period of about 30 months (in 2013-15). All Asset All Authority has kept the same peer group, has never excelled and has frequently stumbled. I'm guessing, though without detailed examination, that that's the cost of leverage and shorting.
For me, that is brief.
David

I don't keep up with the various offerings from all of the fund families (especially funds like these, being more of a DIY person myself), so I hadn't looked into TRLAX.
Apparently T. Rowe Price rebooted the fund two years ago, changing it from a target date fund into a managed payout fund. So the short answer is that this fund isn't much different from other managed payout funds now, but it used to be.
https://retirementincomejournal.com/article/t-rowe-price-reopens-the-market-for-payout-funds/
Viewing 4% as a "safe" withdrawal rate, that's what Vanguard targets. It adjusts the amounts periodically based on performance (as do virtually all managed payout funds). As @hank noted, T. Rowe Price fund targets 5%, while pointing out that it is designed to pay out more early in retirement and less later on (possibly not keeping up with inflation). That's not necessarily a bad idea; generally retirees are expected to spend more in early retirement while they are still more active.
You're not giving up flexibility with managed payout funds. As T. Rowe Price notes on the overview page, you have the "Freedom to withdraw additional funds", and to "Increase (or reduce) your monthly payouts ... by adding or removing investment assets."
The expense ratio does seem high, and is due to "other expenses", not management fees. I don't know why Price isn't operating more efficiently. In theory, you could mimic the fund yourself (it's a fund of funds), except that (a) you'd pay more than the 0.47% it pays for the aqcuired funds because you can't buy institutional class shares, and (b) some of the funds it uses are closed. Using retail class shares (if you could) would bring your expenses up to around 0.60%. (That's about the same as Fidelity charges for its 2020 RMD fund.)
Can one do better on one's own? Maybe. ISTM this question is not much different from asking: why invest in any allocation fund; can't one do better by investing one one's own in separate large cap, small cap, investment grade, junk bonds, international? Or would one do better by paying that same 0.71% and just buying PRWCX?

Agree with Charles. After 5 years if you are still down on original investment (I'm boing to ignore whether you doubled your money in S&P 500 in that same time), AND you still want to hold on to the fund, you have lost your marbles. You have as much probability of moving assets to another fund and do as good for next 5 years. ASSUMING original fund regardless of whether it starts performing does not shut its doors because investors are not forthcoming and may not return.
Let no one take your tax loss away from you in the original fund.
And there are no such things as journalists any more. That word should be stricken from the english languages. I wouldn't even call them reporters, who as the word suggests simply report what they say, and don't try to ANALyse things. There may be maybe 2 / 1000 who are journalists.

"Now consider the New America High Income fund (HYB), which has consistently outperformed the T. Rowe Price open-end fund even though both share the same managers and much the same portfolio. The key difference between the two is the former is a closed-end fund, which means it has a fixed number of shares."
Leverage is not a key difference? HYB, 30.44% structural leverage.
https://www.cefconnect.com/fund/HYB
Over the past ten calendar years, HYB outperformed in up years ( 8 ), and underperformed (more negative) in down years (2). I'd call those amplified (leveraged) returns, not consistently superior returns.
Here's a lengthy discussion of CEF leverage I just posted:
https://mutualfundobserver.com/discuss/discussion/comment/114894/#Comment_114894

Here's a clear, more in-depth explanation of leverage, especially as used by CEFs.
https://www.fidelity.com/learning-center/investment-products/closed-end-funds/leverage
A couple of numbers in the original article caught my eye, as they were presented without explanation:
"According to the Investment Company Institute, the average leverage ratio for bond funds stood at 28% last year; for equity funds the leverage ratio was 22%."
What's an "average leverage ratio"? Is the numerator (what's being averaged) all leverage or just "stuctural", aka "1940 Act" leverage? Is the denominator (which funds are being counted) all funds or just the funds that actually use leverage?
I didn't find the ICI 2018 figures, but I did find the 2015 figures, which are similar. The ICI explains what exactly these averages represent. For 2015, "Among closed-end funds employing structural leverage, the average leverage ratio for bond funds was somewhat higher (27.3 percent) than that of equity funds (22.0 percent)."
https://www.ici.org/pdf/per22-02.pdf
However, as Fidelity notes "Leverage is leverage. Regardless of the source of the leverage, it has the same effects on a portfolio ... This is why transparency of a fund's true leverage is so important. ... Fund families have wide discretion in how they choose to actively report non-'40 Act leverage. Their websites may say a fund is unleveraged, when it actually has a lot of non-'40 Act leverage."
The original article gives a second figure: "Closed-end funds’ use of leverage can be relatively safe 'if the underlying assets are of high quality and have volatility of around 3% to 4%, commensurate with stable assets such as high-quality bonds,'"
What's volatility, and how does that relate to the safety of leverage? I'm guessing that the figure presented is standard deviation of a portfolio. The Bloomberg Barclays US Aggregate Bond Total Return Index is around 3 for various lengths of time (3 years to 15 years), per M*.
Is standard deviation a good way to measure safety of leverage? Here's an excerpt from a Schwab page from which one might infer that the low volatility of bonds is not necessarily comforting. (Consider my selection to represent confirmation bias, as it discusses what I regard as a significant risk of leverage - a flattening of the yield curve.)

Leveraged closed-end funds tend to benefit from a steep yield curve—that is, a large spread between short- and longer-term interest rates. By borrowing at lower short-term rates and investing at higher longer-term rates, the fund typically can generate higher income. ... [T]he spread has narrowed over the past few years.
Rising short-term interest rates can have a big impact on closed-end fund prices. In general, rising short-term rates will increase the cost of leverage for closed-end funds. If the yield curve flattens as rates rise, it can be a double whammy: The fund has to pay more to borrow, while the bonds in the fund may drop in value. If the spread between the cost of borrowing and the yield earned on the underlying bond investments narrows, some funds may not be able to generate as much income as in the past, leading to a cut in the income distribution.
When that happens, a fund’s price may fall, as investors may look elsewhere for income. In addition, leverage can increase the fund’s effective duration—that is, the sensitivity of its price to changes in interest rates. Consequently, closed-end funds can experience far greater price volatility than unleveraged funds.

https://www.schwab.com/resource-center/insights/content/closed-end-bond-funds-how-they-work-and-what-you-should-know-as-rates-rise
On the subject of risk, the original column talks about steady payment streams, but doesn't say anything about how CEFs do this or what the risk is: "the ability to distribute returns more equally throughout the year makes income more predictable and can help clients manage their taxes more efficiently."
The fund smooths out these "managed distributions" by estimating annual total return, including cap gains (both realized and unrealized) and paying that out monthly or quarterly. By distributing all return, the CEF hopes to maintain a steady price. Here's a page from Nuveen explaining how this works:
https://www.nuveen.com/understanding-managed-distributions
Nuveen notes that even if the estimates are accurate, part of the distributions may represent a return of capital (coming from the unrealized gains). Worse, if the fund overestimates total return, "some or all of the distribution represents return of capital that includes part of the shareholders’ principal."
As Fidelity notes, consistent use of this latter "destructive return of capital is a huge red flag, especially if the return of capital comprises the bulk of a distribution."
https://www.fidelity.com/learning-center/investment-products/closed-end-funds/return-of-capital-part-one

@Edmond What I find ridiculous about arguments like the one you're making--basically that the elites are hypocrites about climate change--is that the earth's rapidly changing climate doesn't care one way or the other whether you're a liberal or conservative. So even if they're hypocrites, that still can mean it behooves everyone to try to reduce carbon emissions as best they can. Al Gore may fly around in a private jet and China may cheat on emission standards, and the climate still doesn't care one way or the other. It is an amoral force of nature that is getting worse for most life forms because of human behavior. Let's say someone told you cyanide was bad and then proceeded to take cyanide themselves. Somehow I don't think you would take the cyanide just because the person sounding the warning is a hypocrite. And the truth is everyone is a hypocrite to a certain degree. There's an old saying: Though my guru stumbles out of the tavern, still I will wash his feet. I assume many Catholics still believe abortion is wrong even though it was recently revealed priests were sexually abusing, impregnating and getting abortions for nuns:
https://nytimes.com/2019/02/05/world/europe/pope-nuns-sexual-abuse.html
Hypocrisy is everywhere in human endeavor. But science--the forces of nature--don't care. And what I find so hyprocritical or just plain lousy about the rightwing argument against reducing carbon emissions to reduce climate change is that they used to argue against the science itself. Almost no one who isn't a paid petrol industry shill does that anymore because the science is known to be rock solid and has existed in some fashion now for over a hundred years. Now that conservatives lost that battle against scientific facts, there is an attempt to behave like a child in the school yard saying "Well he started it or he does it too." Meanwhile coastal Florida will almost certainly disappear in our lifetime. Say goodbye to the Keys.

@MikeM. I bought some PRPFX after the rest of you guys fled. Converted it to a Roth in January 2016. In the 3.5 years since the conversion it’s up 27.35%%. Not great - but not bad either for a fund so despised here. Represents 11.5% of invested assets. For contrast, I carry about 15% in cash and short-term stuff yielding very little.
Re: Doc Hussman - Yes. We’re both solidly in the “recovering” state now, having participated in the folly in our early years. So, it’s hard (for me anyway) not to look back and take an occasional jab at the humble fellow.

I believe FundX has followed these strategy for years. It's done well this past year, but not so well of this market cycle. Momentum get a lot of attention with quants. c