If I was focused only on domestic and even if I wasn't I'd at least think hard about POAGX. I don't like nothing but the US but if I had to bet which funds of the ones I currently own that I'd still own 15 years from now that would be my bet.
I like the idea of go anywhere, do anything flexibility but there's just not many, if any, that I'd really trust with that. Since we wouldn't be able to know anything about the ups and downs along the way I wouldn't have a big issue with sticking to stocks and I'd probably go for something like Grandeur Peak's Global Opportunities or Global Stalwarts, neither of which I own.

Terrible choices in that article if you ask me. If it was just one fund it would probably be best to choose a go-anywhere fund--world allocation--that has the flexibility to buy different kinds of asset classes, stocks and bonds. Who's to say that U.S. small caps or mid caps won't dramatically underperform in the next fifteen years?

It's not a bad choice but he dismissed a lot of possibilities without much consideration. It sounds like he started with the answer and needed to write a 300 word article (or whatever it is) to get there. If you've got 15 years then Schiller's CAPE ratio is pretty much the best predictor that's been found and that wouldn't really lead you to US stocks at this point.

The linked article, though written in 2015, makes a case for the next 10-15 years.
What would be the one mutual fund to hold for the next 10-15 years? He gives the nod to VIMSX.
the-one-best-mutual-fund-to-hold-forever-naesx-vimsx

As the result of a "de-mutualization" of my insurer (NE Financial merged with MET Life) I received 25 shares of MET Stock. These shares, originally held at BNY Mellon, recently were transferred to Computershare which provide shareholder services for the shares. Nothing that I initiated. In fact, I stumbles upon this revelation after doing a yearly checkup on the BNY Mellon account. I never received an email nor a mailing of this change. It was hell finding the correct department at Computershares and then proving to Computershares who I was since I was using BNY Mellon Accont information that I had screenshots of (the account nor longer was accessible to me online).
Anyway, this year MET spun off BHF (Bright House Financial...an annuity service of MET) which provided me with 2 shares of BHF. I realize I am not going to get rich here, but these are the kinds of transactions (that even the owner has a hard time following let alone an heir). It happen all the time and these financial assets get lost in the shuffle of life.
I mention this because my parent (a physician and original member of the formation of Mutual Hospital Insurance later known as Anthem) dead very young. My remaining parent, now 94, discovered (by another family member 40 years later) that she was the beneficiary of over $100K of WLP stock (which bought Anthem at one point in time and now WLP is traded as ANTM..don't try to keep score here).
Here a brief history if you are interested:
https://en.wikipedia.org/wiki/Anthem_Inc.
My point is... Fast forward 40 years from today my MET/BHF stock could one day be a small fortune. The power of compounding over time.
So, organize these financial "loose" ends for yourself as well as your heirs. It may seem time consuming, but it is worth every penny of the time that you spend on it.
Also, has a Mutual Fund ever de-mutualized?

FYI: (I will link episode as soon as it becomes available, early Saturday morning.)
Regards,
Ted
November 9, 2017
Dear WEALTHTRACK Subscriber,
Question: what have been two of the most distinctive features of the recovery from the financial crisis of ‘08-‘09? Answer: historically low levels of inflation and interest rates. Despite years of numerous predictions to the contrary inflation has stayed stubbornly subdued and, with some help from central banks around the globe, so have interest rates. But is this nearly decade long pattern finally being broken? This week’s guest says yes and there is evidence to back her claim.
As a recent headline in The Wall Street Journal reads: “Inflation the slumbering giant begins to stir.” To illustrate the point the Journal showed a chart of year over year changes in consumer prices in the U.K., U.S. and Eurozone. They bottomed in 2015 and have slowly risen, with fits and starts ever since… Japan has shown a similar pattern.
Meanwhile interest rates on benchmark 10-year government bonds are rising. U.S. rates ticked higher recently and yields in Germany and Japan are off their mid-2016 lows.
There have been other episodes of rising inflation and interest rates before this which didn’t last. This week’s guest is betting this one is for real.
She is Kathleen Gaffney, Director of Diversified Fixed Income at Eaton Vance where she is also the lead portfolio manager of the Eaton Vance Multisector Income Fund which she launched as the Eaton Vance Bond Fund when she joined the firm in early 2013.
The fund is known for its flexibility to seek higher total return opportunities anywhere globally and throughout the capital structure of the companies chosen. As a result it can buy common and preferred stocks, convertible securities and bonds. It also invests in currencies. That approach however has also meant “significantly more volatility” than its peers in Morningstar’s Multisector Bond category. Case in point: the fund declined 17% in 2015 and rocketed up 22% in 2016.
Gaffney is also lead portfolio manager of the somewhat more traditional Eaton Vance Core Plus Bond Fund. It carries a 5-Star rating and has ranked in the top performance percentiles in its category for the last 1, 3 and 5 year periods, both under her leadership and that of former managers.
If you miss the show on television you can always watch it on our website at your convenience. If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Gaffney about how she finds "think time" in the midst of information overload. It will be available exclusively on our website.
If you would like to take WEALTHTRACK with you on your commute or travels, you can now find the WEALTHTRACK podcast on TuneIn, Stitcher, and SoundCloud, as well as iTunes. Find out more on the WEALTHTRACK Podcast page.
Saturday, November 11th is Veteran’s Day. Please take a moment to remember all of those past and present, who have sacrificed so much to give us the freedoms we enjoy today. I personally salute my Dad, Husband and Son. I am so grateful for their service.
Have a great weekend and make the week ahead a profitable and a productive one.
Best Regards,
Consuelo
Video Clip:

M* Snapshot EBABX:
http://www.morningstar.com/funds/XNAS/EBABX/quote.htmlutm_term=0_bf662fd9c0-2b02004c36-71656893
Lipper Snapshot: EBABX:
https://www.marketwatch.com/investing/fund/ebabx
EBABX Is Unranked In The (IB) Fund Category By U.S. News & World Report

Yes, the 12% allocation = 3 years at 4% each year. Perhaps even one year higher dependent on comfort levels.
The main reason I brought up this issue of cost basis is I have a personal belief that market drawdowns will become more severe during recessions than historical norms going forward. Mostly due to algos/computer trading and ETF proliferation and other pin action things that those two affect that we are not aware of. This is a new phenomenon therefore an investor must be cautious when back testing. One could argue that my opinion is wrong, but the truth is no one really knows yet. Therefore, IMHO cost basis becomes a more important aspect of portfolio management for investors who have the luxury of time.

@msf
>> using asset allocation is mathematically equivalent to using buckets with rebalancing.
yeah, it is from him that I got my construct notions
>> I think one can do better with, say, an 88/12 (cash) bucket strategy without rebalancing.
and this is what I am moving to, though you do have to sell, to replenish cash, a kind of rebalancing, seems to me
>> After waiting it out one can replenish the cash bucket from equities. So I'm comfortable keeping a three year cushion.
I do less than that; maybe should reconsider. Three years in cash, huh.
>> Right now, though, I'd use cash for that cushion because bonds add risk and don't add much to returns.
I often wonder about my Pimco allotment. Why not bail into cash? (Greed.)
>> If a retiree (inferred from the "no income" hypothesis) has $1M and needs $40K/year, staying completely out of the market isn't unreasonable. A 65 year old male can get an annuity paying $40K/year, with 3% annual adjustments, for about $840K. He can have fun with the rest - invest, travel, build a legacy, save for unexpected expenses. Annuities are another way to mitigate risk, as Pfau discusses in his Forbes column cited previously.
My wife has posed, if we have enough to cover expenses (@4% withdrawal), actually just enough, why not go even more conservative than our 50-50 (including SS as bond)? I usually mutter about travel, emergencies, housing loans / help / gifts to kids, future education help to grandkids, health surprises (we do have LTC), and greed.

(Double-dipping here)
Along a similar vein to the card’s professed wisdom ... the simplistic slogan I credit with turning my financial life around more than 25 years ago is: “Pay yourself first.”
I first heard it voiced by an (ironically) unlikely mutual fund promoter of the time, Richard Strong. His Strong Capital Management used the slogan prominently in its advertising. Up to that point I’d thought of saving only as depriving oneself of something. The slogan turns that idea upside-down and makes saving sound much more like a reward. Sure helped me get turned around.

A sequence of return risk always exists so long as there are withdrawals. If there are no withdrawals, it doesn't matter whether the market starts off down and then goes up, or starts off well and then declines, so long as it winds up in the same place.
That leads to the (rhetorical) question: why use a 50/50 mix rather than simply a diversified equity portfolio? One reason is real though not especially rational - emotional discomfort in seeing numbers drop (for all the non-Vulcan investors out there :-)). Another reason is pragmatic. Withdrawals when the market is down eat away at a larger percentage of the portfolio; keeping a bond (or cash) allocation mitigates that risk.
To be clear. We're all talking about mitigating sequence risk. We just have different views on the best way to do that. There's an interesting column by Kitces, where he shows that using asset allocation is mathematically equivalent to using buckets with rebalancing. In other words, the 50/50 portfolio is the same mitigation strategy as drawing from bonds/cash in down markets so long as one rebalances periodically.
I think one can do better with, say, an 88/12 (cash) bucket strategy without rebalancing. Except for the dotcom bubble (that took 31 months from peak to trough), markets have generally bounced back in three years. At least most of the way. After waiting it out one can replenish the cash bucket from equities. So I'm comfortable keeping a three year cushion. Starting now, or starting anytime. Right now though, I'd use cash for that cushion because bonds add risk and don't add much to returns.
The reason why I continue to return to the threshold question about when declines matter, is that corrections are both frequent and erratic. Like the saying that indexes predicted nine out of the last five recessions (Samuelson), one may be out of the market most of the time if one is constantly concerned about the inevitable next correction/bear. (Look at how many years people have been saying that the bond market is about to decline - we're coming up on a decade now.)
If a retiree (inferred from the "no income" hypothesis) has $1M and needs $40K/year, staying completely out of the market isn't unreasonable. A 65 year old male can get an annuity paying $40K/year, with 3% annual adjustments, for about $840K. He can have fun with the rest - invest, travel, build a legacy, save for unexpected expenses. Annuities are another way to mitigate risk, as Pfau discusses in his Forbes column cited previously.
Unlike the 95% success rate you mentioned, the annuity provides a 100% success rate (assuming that the AA rated insurance company doesn't fold).
I agree with you in being concerned about a 5% chance of failure. It's not like you get 20 lifetimes and get to discard one of them. You've only got one shot at this, and you don't want to be the 1 in 20 who goes broke.
Perhaps I've misread posts, but a response I've read seemed to say to me, "well, these 5% outliers aren't real, but just artifacts of the way the simulators work." You're never going to see in real life, for example, three years in a row of 20% declines, even if they do show up in random simulations.
I take that not as reassurance, but reason for concern that the simulators have fundamental flaws in their design. So while I might agree that the 5% won't actually happen, I'm less sanguine about the accuracy of the other 95% of predictions.

Thanks for posting the Dan Fuss article. I own NEFZX which is a Loomis Sayles bond fund and they have dialed it way down also. It's duration is listed by Morningstar at 3.13 years with maturity being 4.6 years along with a yield of 3.49%.

"For an investor in retirement down 57% and continuing to withdraw for income he won't care whether its called a correction or bear market."
For an investor in retirement down 19.4% and continuing to withdraw for income he won't care whether it is called a correction (-19%) or a bear market (-20%).
Yet you ignored a drop of this magnitude even though names don't matter. Was it too small a drop? How large does a market decline have to be for you to care?
We've got at least one fan here of Monte Carlo simulation. I've given many reasons why I find existing tools (not the concept) inadequate. But they apply to probabilistic future projections. Backtesting shows what would have actually happened - no probabilities involved since real market data are used over real periods.
So just for fun I ran portfolioVisualizer from Oct 2007 to Oct 2017 with a representative 50/50 retirement portfolio (SPY/AGG), rebalanced annually. I started monthly withdrawals at 0.33% of the start amount (i.e. 4% annual rate) and increased the withdrawal amount just for inflation.
http://traderhq.com/illustrated-history-every-s-p-500-bear-market/
https://www.portfoliovisualizer.com/backtest-portfolio
Compound aggregate growth rate (CAGR) was positive - around 1.8%/year. It was even positive after adjusting for inflation (about 0.1%/year real return).
Ran the same simulation starting March 2000, except I had to pick another bond representative (AGG started Sept 2003). So I used VBMFX. Sure enough, with two crashes within a decade, that one didn't come out as well.
CAGR was still positive, at 0.23%/year, but after adjusting for inflation, the portfolio lost 1.9%/year in real value. About 18 years after starting, the retiree's portfolio in nominal dollars was up only 4.2% from where it started.
Still, not the dire straits it seems you were expecting.

For all the criticisms of LSBDX as being highly volatile, it's beaten or matched the standard benchmark (Barclays US Aggregate) and nearly done so with its benchmark index (Barclays Government/Credit), falling 0.14% short/year over three years (but better over 1, 5, 10, 15). That's despite an abysmal 2008.
After 59 years in the business, 26 years managing this fund, Fuss' record is more likely the real article than random chance success. So when he takes this free wheeling fund to its most conservative position ever, it's worth taking note. (Unlike some other bond fund managers who shall remain nameless, Fuss doesn't go out of his way seeking the spotlight.)

The Loomis Sayles Bond Fund has reduced its risk exposure to the lowest since its inception in 1991

Here's a much more extensive article on his macro views (Oct 19, 2017):
https://www.advisorperspectives.com/articles/2017/10/19/dan-fuss-warns-of-geopolitical-risks-and-higher-rates-1

Thanks @Ted,
If you ever have an opportunity to read or listen to a Dan Fuss Interview, do so. Like Bogle, Fuss is a grandfather like figure that is both engagingly dry and full of financial wisdom.
From @Ted's article on owning bonds in today's market:

“I do know from my 59 years of experience, when the ice was very thin, it’s always good to be very cautious,” he said. “You can skate around the edges but you can’t go out to the middle.”

and,

“I‘m not trying to be an ‘end of the world person’ here, but it is a possibility,” he said. “It used to be one percent, now it’s a 15 or 20 percent possibility. Would you get on an airplane if there was a 15 percent risk? And that’s a good way to ask a person about risk,” he said.

Maybe investor confirmation bias, but I sold my "middle of the pond" position in AGDYX about a month ago. His concerns about a lack of buyer of bonds and a higher risk of inflation paired with do nothing politicians is what you pay a bond manager to worry about. Bond index funds provide none of this risk management.
Wish the article dug a little deeper into Dan Fuss and his bond choices over the next part of the market cycle.

I've had TGINX for several years now, and it doesn't seem overly affected with recent actions. Not sure why, however.

Good column (and not pay-walled). The bright spots, such as they are, in his projections are that although he doesn't expect the market to beat inflation in the next several years, he's also not expecting a crash near term. Also, over the longer term (two decades) he expects stocks to beat inflation by 2.8%.
I agree with Lewis (and Grantham) that workers are being treated worse than in "days of yore". However, I think Grantham's view of pension funds in the past is a bit on the rosy side. Pensions were used to lock in employees (30 year requirement to benefit), used as an excuse for paying lower wages, used to lavish benefits on management, perennially underfunded, and often bankrupt (think Studebaker). ERISA protections didn't come along until 1974, and by 1980 you had 401(k)s appearing.
NYTimes Magazine article 2005: The End of Pensions.

There are parts I agree with, and parts where I see things differently.
I agree that the intent was likely, at least in part, to prevent gaming the system. I make multiple/excess conversions in a year. Then after I see how each investment has done and how much I need to roll back to stay within a tax bracket, I select which investments and how much of each to undo. I'm sure there are others here who do something similar.
All perfectly legal, and all gaming the system. Heads I win, tails the IRS loses.
A simplified version of this is: if the market goes up, keep the conversion. If the market goes down, back it all out. Ed Slott doesn't see this as gaming. I disagree. Still, heads I win, tails the IRS loses.
Ed Slott thinks that if this provision passes, you won't be able to undo your 2017 conversions after December 31, 2017. I read the proposal differently. He's certainly being more conservative, and that's probably good, especially for an advisor.
What the proposed legislation says is: "EFFECTIVE DATE.—The amendments made by
this section [removing the ability to recharacterize] shall apply to taxable years beginning after December 31, 2017."
I take that as meaning that you will not be able to recharacterize anything for tax year 2018. Recharacterizing your 2017 conversions, whenever it is done, applies to tax year 2017.
As supporting evidence, I point to the wording in the current code (which would be deleted):

if, on or before the due date for any taxable year, a taxpayer transfers in a trustee-to-trustee transfer any contribution to an individual retirement plan made during such taxable year from such plan to any other individual retirement plan, such contribution shall be treated as having been made to the transferee plan

A bit of a mouthful, but basically saying that if you undo your tax year 2017 Roth conversion by Oct 15, 2018, it's treated as if you'd just moved the money from your traditional IRA back into a traditional IRA in tax year 2017.
Of course this isn't advice, Ed could be right, or the law might not be changed at all.

FRIFX looks like a great fund. I remember that I had in on my watch list years back, can't remember why I didn't pull the trigger.

Q: Where are you finding stocks these days that meet your criteria? How does today’s environment rank on the scarce-to-plentiful/easy-to-hard scale and how does it compare to other times?
A: Japanese small caps are the single biggest pocket of great opportunities.
Also, this comment seemed worth considering Canada now:

Five years ago, the Canadian dollar was near parity with the U.S. dollar, but today it is worth about US$0.78, reducing the value of Canadian stock holdings proportionately.

FYI: For Joel Tillinghast, investing is as much about avoiding mistakes as picking winners.
In 28 years of running the $38 billion Fidelity Low-Priced Stock Fund FLPSX, +0.02% he has done plenty of both.FYI:
Regards,
Ted
https://www.marketwatch.com/story/fidelity-fund-manager-investing-successfully-is-about-minimizing-regrets-2017-11-06/print
M* Snapshot FLPSX:
http://www.morningstar.com/funds/XNAS/FLPSX/quote.html
Lipper Snapshot FLPSX:
https://www.marketwatch.com/investing/fund/flpsx
FLPSX Is Ranked #6 In The (MCV) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/mid-cap-value/fidelity-low-priced-stock-fund/flpsx