Thanks Ted. If one uses that to look at rolling ten year periods (there are 81), in 65 of them stocks (S&P 500) outperform 10 year Treasuries and 3 month Treasuries, in 9 of them the 10 years outperform, and in 7 of them cash (3 month T-bill) is king.

Part of the "process" in taxable accounts:
Try to:
- Hold tax efficient funds such as index funds
- Hold funds and etfs that have low turnover ratio
- Avoid holding (bond & stock) funds, etfs, and stocks that throw off a lot of short term gains (these are not tax efficient)
- Hold individual stocks for the long term...Long term capital gains and inheriting stock at their stepped up basis...both positives for taxable accounts
- Treat your temporary losers as an opportunity to tax loss harvest their losses...this will offset gains for many years if losses are large enough to "carry over".
I'm sure there are many more...

Hi @newgirl,
I probably not the best on the board to walk you through how to start a due diligence process. I think most retail investors need the guidance of a financial advisor and you might do well to seek one out.
There are a lot of things that are unknown about you and with that suggestions are hard to make concerning your investments. That is why I responded in a way as to what I favored about the Sun America Dividend Strategy Fund ... not is so much that it might be right for you.
Some things you might wish to do if not already done is to perform an investment risk tolerance analysis to help determine what type of investments and asset allocation might be of a fit for you. Another thing that I have found beneficial is to do a Morningstar Instant Xray on each of my funds. This is a quick and easy way to see how they are positioned and allocated. Then do an Xray on your portfolio as a whole. In this way you can see how it is positioned and allocated and how the investments owned combine into a portfolio. Then you can change holdings and amounts to see how this bubbles before making rebalance changes. Knowing your risk tolerance level is important because it will help you with finding the right asset allocation and investments. Before tweaking know what you have first and how it fits together into a portfolio and Instant Xray can help determine this.
Once you have done this then you can get down to a review of your funds and comparing them to others that you might find of investment interest. Before, I kick a fund to the curb I've got to have found a better one with strategies that I am comfortable with. Strategies that I favor might not be right for you as I am in the distribution phase in investing while you might be in the accumulation phase.
As you know many made some good and sage comments. Remember, just because a fund has performed well does not mean it will continue to do so and that is why I consider looking at its strategy to see if it is a right fit for me in the first place and that I understand it. A dividend strategy fund simply might not be right for you while it is for me. And, only you can determine that.
Even today after more than fifty years of investment experience and being considered a seasoned retail investor my advisor will ask me to justify why I am making changes within my portfolio. Sometimes they will ask me to revisit and to rethink this including tax considerations as well. Most times, they follow my first thinking.
Wishing you the very best as you continue your due diligence process.
Old_Skeet
Additional comment. Linked below is a post I made back in 2016 about my portfolio and how I have things organized. Although, somethings have changed within the portfolio itself the process has not.
https://www.mutualfundobserver.com/discuss/discussion/24926/old-skeet-s-new-portfolio-asset-allocations-2016#latest

@newgirl,
I own the A shares of AIG Focused Dividend Strategy (FDSAX) while you have another share class of the same fund with symbol FDSWX. Of late this fund has started to come on pretty strong with it's rolling one week return being listed by Morningstar at 1.21%, one month at 1.88% and 3 month at 9.12%. In addition, Moringstar list its five year rolling total return at 9.43%. AIG Focused Dividend Strategy is a value fund and value has been out of favor for the past couple of years while growth has been the place to be. My position was built over the past ten years, or so, thus it is a long term position for me, held in a taxable account, and has sizeable capital gains exposure (much like you) which would be taxable if I sold. One of the things that I like about the fund is that it usually kicks off a good bit of income annually (dividends and capital gains). Another one is about a third of its equity is positioned in the Dogs of the Dow strategy.
In comparing FDSAX to some other dividend type funds (INUTX, IDIVX, LCEAX & PQIAX) I decided, for me, it was still a keeper.
Wishing you the very best as you perform your own due diligence.

I am having pulling the trigger myself. I just took back an account previously managed by and advisor.
I am having trouble pulling the trigger to sell out of positions, especially those with a capital gain. By the MFO premium analysis FDSWX - looks to be underperforming last 5 years, especially this year. Ditto BPIRX which is a long short - (might this do better in the brewing storm ?). Both are in taxable accounts with gains . Advice on how to proceed is welcome.

Hi @Starchild, for what its worth .
I have owned NPSAX, off & on, through the years. Currently, I do not own this fund as its total return (nav expansion) can not cover its distributions this results in a negative total return year-to-date. I'm thinking this is due to a rising interest rate environment where a good number of income securities are having a difficult time maintaining their value while meeting their income distributions.
In reviewing NPSAX's Moringstar report I am finding that through August 7th it has had a negative ytd total return of -1.63%. So, even though it has a nice yield its loosing principal value and is not covering its yield resulting in a nav contraction. On the other hand my money market mutual fund GBAXX has a positive ytd total return of 0.94%. With this, I've been reducing my fixed income positions if they can not keep pace (or out perform) my money market mutual fund.
With this, I'm building cash over buying fixed income securities. The exception, for me, is in a bank loan fund that I own along with some hybrid income funds where their nav's are be maintained (or even growing) while meeting their income distributions.

Appreciate the comment @old_skeet. Sort of a curiosity for me at this point. I'm 43 and more in accumulation mode as opposed to adding more fixed, but doesn't hurt to investigate future plans. Looks like most fixed income is down this year, but I'm in it for the long haul. My only fixed is PONAX and I'm sticking with it. :-)

Hi @Starchild, for what its worth ...
I have owned NPSAX, off & on, through the years. Currently, I do not own this fund as its total return (nav expansion) can not cover its distributions this results in a negative total return year-to-date. I'm thinking this is due to a rising interest rate environment where a good number of income securities are having a difficult time maintaining their value while meeting their income distributions.
In reviewing NPSAX's Moringstar report I am finding that through August 7th it has had a negative ytd total return of -1.63%. So, even though it has a nice yield its loosing principal value and is not covering its yield resulting in a nav contraction. On the other hand my money market mutual fund GBAXX has a positive ytd total return of 0.94%. With this, I've been reducing my fixed income positions if they can not keep pace (or out perform) my money market mutual fund.
With this, I'm building cash over buying fixed income securities. The exception, for me, is in a bank loan fund that I own along with some hybrid income funds where their nav's are be maintained (or even growing) while meeting their income distributions.

Phony accounts:

Wells Fargo isn't the only bank where heavy sales pressure led employees to open fake accounts.
A federal review triggered by the Wells Fargo scandal found that "weaknesses" at other banks led employees to open accounts without proof of customer consent — just like Wells Fargo did — according to the Office of the Comptroller of the Currency.
... Citigroup (C), US Bank and Bank of America declined to comment.

https://money.cnn.com/2018/06/06/news/companies/wells-fargo-fake-accounts-banks-occ/index.html
Emission tests fraud:

Collusion Between Germany's Biggest Carmakers
The diesel scandal is not a failure on the part of individual companies, but rather the result of collusion among German automakers that lasted for years. Audi, BMW, Daimler, Volkswagen and Porsche coordinated their activities in more than a thousand meetings.

http://www.spiegel.de/international/germany/the-cartel-collusion-between-germany-s-biggest-carmakers-a-1159471.html

The motor industry was embroiled in a new diesel emissions scandal last night [June 11, 2018] after 774,000 Mercedes-Benz vehicles were found to contain cheating software.

https://www.thetimes.co.uk/article/mercedes-faces-mass-recall-for-cheating-diesel-software-l0378ctf3

The raids on Tuesday, in which about 100 investigators targeted BMW offices in Munich and an engine factory in Austria, suggested that all of Germany’s top domestic automakers may have evaded emissions rules, although perhaps not to the same degree as Volkswagen.

https://www.nytimes.com/2018/03/20/business/energy-environment/bmw-diesel-emissions.html

Ford became the latest company to become embroiled in the issue, with drivers in a U.S. lawsuit claiming some 500,000 Super Duty pickup trucks were rigged to beat emissions tests.

https://www.washingtonpost.com/business/why-carmaker-cheating-probes-stay-in-high-gear-quicktake-qanda/2018/01/10/318b6d5a-f632-11e7-9af7-a50bc3300042_story.html?utm_term=.da98430847ad
It's not so easy to pick and choose less bad from bad.
With respect to the 400 or so WF foreclosures - these were the result of an "automated miscalculation of attorneys’ fees that were included for purposes of determining whether a customer qualified for a mortgage loan modification." (From WF filing.) That's ineptitude, not malice. Not that the government didn't facilitate this:

No Republican sign-off was necessary for Obama’s Home Affordable Modification Program (HAMP). The Treasury Department alone decided to run it through mortgage companies that had financial incentives to foreclose rather than modify loans. Treasury never saw the program as a relief vehicle, but a way to “foam the runway” for the banks, allowing them to absorb inevitable foreclosures more slowly.

Obama Failed to Mitigate America's Foreclosure Crisis
https://www.theatlantic.com/politics/archive/2016/12/obamas-failure-to-mitigate-americas-foreclosure-crisis/510485/
As to how long to hold the companies responsible (I agree with sending the execs to prison), how about at least as long as the effects of their acts endure? Which can be a mighty long time. We still don't know the extent of long term effects of all the fraudulent foreclosures.
Food for thought when considering duration: How Redlining’s Racist Effects Lasted for Decades
https://www.nytimes.com/2017/08/24/upshot/how-redlinings-racist-effects-lasted-for-decades.html

I think this discussion should, at some point, get to the essential nature of capitalism.. yes, I know it is reportedly better than any other system and no,, we are not talking about the evils of godless socialism. The truth is that when the bottom line is the bottom line and corporations live and die each quarter these things are common. You know the old saw,if you don't cheat you aren't trying hard enough. Disclosure,,,, PRBLX was my core holding for years and I have tons of brokered WF CD's in my portfolio.

Seems like Invesco may have overpaid for his firm because of Ross's persistent grifting:
https://forbes.com/sites/danalexander/2018/08/06/new-details-about-wilbur-rosss-businesses-point-to-pattern-of-grifting/
This is our Secretary of Commerce:

From Ross’ vantage point, Trump offered the perfect exit. The future cabinet secretary’s private equity funds were underperforming—one on track to lose 26% of its initial value and another two dribbling out mediocre returns—and the accusations were starting to pile up. Roughly two months before the 2016 presidential election, the SEC announced WL Ross was paying a fine and refunding $11.9 million it allegedly skimmed from its investors, including interest. The scheme was complex. Like other private equity firms—including several that coughed up money to the SEC around the same time—WL Ross derived much of its revenue from management fees charged to its investors. With funds as large as $4.1 billion, management fees of 1.5% could alone bring in more than $60 million a year for Ross’ firm—serious money.
But WL Ross promised that it would give its investors something like a rebate. For example, when Ross and his colleagues got certain fees for working on deals, they were supposed to give at least 50% of that money back to investors. But, according to SEC investigators, the firm gave back less than it suggested it would and pocketed the difference, leading the feds to conclude Ross’ firm broke laws that prohibit defrauding and misleading clients. WL Ross paid the big settlement but never admitted guilt.
According to the feds, WL Ross charged some of those inappropriate fees in the years before the commerce secretary sold his firm to Invesco for $100 million up front and the possibility of another $275 million down the road. That meant that when Ross cashed out, he presumably did so at bigger valuation than he deserved. In a statement, Ross suggested that Invesco never clawed any of that money back. “The terms of the sale of my business in 2006 remain unchanged,” he said. Invesco declined to comment.
There is more to the story. According to five former WL Ross employees and investors, the firm was also charging its investors on money that it had lost. Here’s how it worked: If WL Ross made an investment of, say, $100 million that declined dramatically, in the final years of the fund the firm was supposed to charge management fees on the actual value of the investment, not the $100 million starting point. However, WL Ross allegedly continued collecting fees on the amount invested, taking more than it deserved. WL Ross was allegedly even charging fees on one investment that was essentially worthless. When approached about the discrepancy, Wilbur Ross initially insisted his firm was calculating the fees correctly, according to someone familiar with those discussions. “There are all sorts of fee issues,” says an investor, “but it was just the most egregious that I’ve seen.”

https://bizjournals.com/atlanta/news/2018/08/07/invesco-lumped-into-forbes-wilbur-ross-grifting.html

Invesco has seen its stock plunge since Jan. 26, 2018 — from $38.4 per share to $25.68 as of Tuesday morning.

True, but you don't have to look too far to find they've all had dirt on their hands at one point:
https://rollingstone.com/politics/politics-news/bank-of-america-too-crooked-to-fail-232177/
https://nytimes.com/2017/03/30/business/dealbook/new-firms-catching-up-to-banks-in-foreclosure-rankings.html
The question is which is the cleanest now and which is the dirtiest and which will be the cleanest tomorrow and five years from now and which will be the dirtiest? This will weigh on these banks not just from an ethical perspective, but on their future returns. The other question to ask is which ESG mutual fund will be the first to pick up on potential malfeasance? Since this is a MF site and you are obviously unhappy with PRBLX, which ESG fund do you think will do a better job at catching and reacting to this sort of thing? I guess what I'm thinking is that PRBLX is at least trying to do the right thing. The fact that it failed to do so in a timely fashion is a black eye, but I wonder which ESG funds get it right on financial stocks?

FYI: (I highly recommend preferred stocks or funds for stability and income. I held PFF for many years, selling to use proceeds to fry other fish.)
Preferred stocks – a high-yield asset that’s typically referred to as a stock-bond “hybrid” because it has characteristics of each – are treading water this year after a strong showing in 2017.
But that’s OK. Preferred stocks typically aren’t bought for upside potential – it’s about stability and income.
Regards,
Ted
Click On View All:
https://www.fidelity.com/insights/investing-ideas/preferred-stocks-funds-to-watch
WSJ Preferred Stock Tables:
http://www.wsj.com/mdc/public/page/2_3024-Preferreds.html?mod=mdc_uss_pglnk
Quantum Online.Com:
http://www.quantumonline.com/QuickStart.cfm

I bought into PROVX about 9 months ago. Was part of the FMI Fund family until October 2013 when it was reorganized some years ago (believe the fund was sub-advised back then by the current management team). Prefer it more so than FPACX as it has grown so much over the years in AUM with no real decline in the expense ratio (another problem with FPA Funds).

Hi @Ted,
I share your feelings on the social and political issue postings and I was close to leaving myself; but, I decided to stay since these type postings have diminished of late. Should you decide to leave know that I have appreciated your many postings through the years (back into fund alarm days) and I have found a good number of these post to be most beneficial to my investing endeavors.
Please know, you will be missed by me and I am sure some others should you decide to leave. I'm thinking the board will become a dull place without you; and, with that said others will also leave. Perhaps, myself as well.
Over the years and of recent one of the things that I found great favor in was that many of your postings gave credence to my own thinking. This post was one of them in more ways than one as well as the one I have linked below.
https://www.mutualfundobserver.com/discuss/discussion/42630/investors-move-to-cash-anticipating-democratic-gains-in-u-s-nov-elections#latest
Thanks again, Ted, much appreciated.
Old_Skeet

GOF is a fund of funds so your expense ratio is double. The two Pimcos are excellent, but too expensive to buy now. CEFs go on sale about twice a year, and on a panicked protracted many months long selloff every 2.5 - 3 years. So be patient. Oh, and DSL has nothing going for it, but the name of its manager. NAV return is average, and it hasnt earned its distribution in a while. Overpriced by about 5-7%. Watch and study them. Don't rush.

With all due respect that sounds more like common sense rebalancing rather than doubling or eliminating an investment. In my mind there is a large difference between the two.
Using your same example I have done the same when certain sectors have fallen in or out of favor. However, when I held a single equity in the energy sector my reaction was quite different. Using KMI (Kinder Morgan) as an example, it got slaughtered when management cut the dividend a few years back. While I understand the reasons why they did it the fact was they lied to investors about that decision. It would have been a great time to double down on one's investment if you felt like they would never do that again but I ran instead.

@MJG - Thanks,
Yep - My original post mentioned not being able to identify the author. Later I did learn his name and position with IAG and so corrected that. There were some redundancies I weeded out as well. Apologize for throwing you a knuckle ball. You handled it like an expert.
So Mr. Chisholm graduated from college in ‘99 with an economics degree ...
These young ones - still in college at the height of the 90s boom - really don’t have the same perspective as you, me and some others here who’ve been investing and following the trends for 50+ years since the ‘60s. The inflation of the 70s & 80s, seeing gold soar from $35-$500, the Volcker years, the tech bubble & wreck, and October 19, 1987 all influenced my perspective. Mr. Chisholm did live through the ‘08-‘09 collapse. But I fear the unusually strong and rapid recovery may well have taught him and many the wrong lesson.
A degree in economics is nice. I’d be more impressed with a CFP and a bit more experience out in the field. I probably should not have referenced your source as an advertisement. While it does have some promotional attributes (plugging for his firm) I think the content was well intended. I continue to be a bit agitated when anyone tosses out that corellation between trading frequency and poor performance. While that’s a part of the picture, it’s not the whole picture.
Great biking day here in northern Michigan.
Wishing you good investing.

Hello all,
I want to thank all that made comment in this thread. Again, if you came to it lookin for a scientific answer ... well, you are probally still looking.
I'm going to share a recent happening within my own portfolio that took place over the past couple of years. I am sure most remember when engery stocks tanked and the sector pulled back. For me, this was a no brainer in essence I doubbled down since I felt the sector was oversold and increased my allocation in engery. Over the past couple of years, thus far, this has been very rewarding. This action came more from art and my right side brain thinking than from science. Wisdom gained through investing forumlates on the right side of the brain to recgonize patterns. And, through the years I have at times bought the laggard sectors when I felt they were oversold figuring they would rebound. Would I completely cut and run form a sector "never." But, I sure would reduce a sectors weighting within my own portfolio should if feel it was overbought under the axiom "Buy low ... Sell high." Currently, I am underweight technology and discretionary because I'm thinking they are overbought. Again, right side brain thinking.
So, yes ... I have to a certain extent done both ... "Double Down" and Cut and Run."
Thanks again to those that made comment (the wizzards) and also to those that just stopped by to read. I hope you were able to gain some knowledge from the boards wizzards. We don't all think alike but that is what makes investing so great for those that can master it.
Want to become a master investor (wizzard) click on the below link. Enjoy the reading.
http://mastersinvest.com/tutorialnavigation

“Individuals make decisions every day with their emotions assisting their judgment. It is part of who we are as human beings. Unfortunately making emotional decisions can be a detriment in the investing world. Individual investors who let their emotions guide them have a much harder time investing than people who have found ways to master their emotional decision making. Some investors try to master their emotional involvement by using a rules-based system, others use computers to make the decisions for them, and still others invest in indexes through ETFs or mutual funds. There are many ways to remove the emotional component from investing, but most investors don’t realize that their emotions are the problem. You can read my post about fear and greed investing or investing is not gambling to learn more.”
The link MJG posted is an advertisement for Investment Advisory Group. The writer’s name is Kirk Chisholm. He’s employed by Investment Advisory Group. I’ve noted the qualifications he provided at bottom. No accredited instructions or degrees are listed. No reference to specialized training in either finance or psychology is indicated.
(1) Correlative statistics: The writer cites statistics showing a correlation between poor investment outcomes and frequency of trading (higher trading being associated with poorer performance). I dont think many would doubt that correlation. It’s pretty widely accepted.
(2) Assumptions The writer makes numerous assumptions about the psychology of different investors which (presumably) led to some engaging in higher than average trading. What are the writer’s qualifications re human psychology? It’s a big leap to go from the correlation between trading frequency and performance to the particular psychology which led to that. At that point you’re likely delving into problems like compulsive personalities, low educational attainment, delusional thinking - and quite possibly substance abuse, gambling addiction and dysfunctional families. I don’t know what leads some investors to trade so frequently. I don’t think the author knows either. I’d suggest the he and his firm stick to dispensing investment advice.
(3) Causal relationship - I don’t think he’s demonstrated that convincingly. It is equally possible that those who trade frequently are poor money managers to begin with and would still have found a way to lose money in the markets. Their heightened trading activity might be more a consequence of more serious underlying issues (including financial) rather than the cause of their predicament. So, was the frequent trading the cause of their problem or was it the result of other problems?
Author: Kirk Chisholm is a Wealth Manager and Principal at Innovative Advisory Group (IAG). His roles at IAG are co-chair of the Investment Committee and Head of the Traditional Investment Risk Management Group. His background and areas of focus are portfolio management and investment analysis in both the traditional and non-traditional investment markets.
-
I liked this thread in general. To me it does not appear to be about frequent trading. I suspect Old Skeet was more interested in that 2, 3 or 5% of an investor’s decisions based on strong conviction for / against a particular opportunity. “Doubling down” is a treacherous path to making money which nearly everyone has previously noted. “Cut and run” references selling a bad investment or fund. If you’ve invested for more than 50 years without ever making a bad investment (one you needed to sell) you are indeed fortunate.

Keep in mind that about 20 years ago, when Apple was hitting bottom, GE was the largest company in the US if not the world. Now GE is in shambles with no end in sight. My, how the tables turn.