FYI: Investors are wrongly expecting the bull market to end and too risk averse, putting too little into stocks and too much into fixed income, according to BlackRock strategists.
The steady, modest expansion of the economy and the stock market's brisk increases have some years to go so stocks generally are not overpriced, they said in a new report.
Regards,
Ted
http://www.fa-mag.com/news/blackrock-to-investors--relax-the-expansion-has-legs-33666.html?print

I'm not very good at predicting market cycles so I decided to play it down the middle with index ETFs. I hope those who have held Yacktman funds over the years are rewarded for their patience.

FYI: The ease and frugality of investing in the stock market through index funds has made indexing so popular that no less an authority than John Bogle, the chairman of Vanguard and the instigator of the trend more than 40 years ago, felt compelled to issue a warning: Indexing conceivably could become so ubiquitous, albeit well into the future, that the stock market essentially ceases to function.
Regards,
Ted
http://www.marketwatch.com/story/vanguard-may-solve-an-indexing-problem-it-helped-create-2017-07-12/print

Since Don Yacktman retired, his son Stephan and co-manager, Jason Subotky having doing a good job running both the Yacktman and Yacktman focus funds. The Focus fund has higher allocation to foreign stocks (16% total and 14% is invested in Samsung Electronics) versus 9% in YACKX. Also both funds have 20% in cash - most defensive I have observed over the years.

@hank - "And finally, the pilot can always get on the radio and ask "where the hell am I?" ... "
I've been asking this question for years

http://www.cetusnews.com/business/Pimco’s-Daniel-Ivascyn-on-Staying-Ahead-of-the-Fed-.r1gITMEkrb.html
Since the Barrons article is behind a pay wall......
"Ivascyn’s fund (ticker: PIMIX) is Pimco’s largest actively managed bond fund, with $89 billion in assets and an enviable 99th-percentile ranking over the past five and 10 years. The fund is up 5% this year, versus 3.8% for the average multisector bond fund. Ivascyn has run the fund since its 2007 inception. He recently discussed with Barron’s his investment views and the outlook for the “new neutral,” a phrase that Pimco coined in reference to the current protracted period of unusually low interest rates."

Looking at my tracker, I notice HSGFX currently priced at $6.66. The number 666 is sometimes considered a bad omen - the sign of the beast - by superstitious people. However, if you like buying funds that have been beaten up (expecting a nice bounce) it could be a good omen in this case. :)
The fund is down 7.76% YTD and 15.8% for 1 year.
I believe a lot can be learned by watching various investment styles over time - both those that succeed and those that fail. That's why I track the fund along with a half-dozen or so other funds. Out of fairness, here's Dr. Hussman's latest weekly commentary from July 3: https://www.hussmanfunds.com/wmc/wmc170703.htm
In checking Hussman's more successful fund, HSTRX, I found it essentially flat both YTD and for 1 year. That one, as I recall, invests primarily in short-term T-Bills and seeks to enhance return with limited exposure to gold and utilities. The latter 2 often determine where the fund goes. Having a .79% ER, one can understand why it hasn't gained much in the current low interest rate environment.
Disclosure: I once owned both of the funds above, but haven't owned either for at least 10 years.
---
Related - Gold was hot for a couple months recently, rising to near $1280. It's tumbled over the past week and is now around $1215-$1225. Fed-Speak seems to have much to do with its fortunes from time to time.

This is going to be a hit or miss post, since I've been out and about traveling and won't be caught up for some time. Some offhand thoughts:
"If Bengen 'concluded that a 4% drawdown rate resulted in certain survival', he was wrong" and "The article is dominated by references to Wade Pfau observations. He too is a very strong advocate of Monte Carlo simulations to help arriving at retirement decisions. "
The NYTimes article has a graphic with three other spending models by Pfau. All three show 100% survival over thirty years (worst case shows money remaining for all models). That includes a model with a constant (inflation adjusted) drawdown amount.
Yet the simple Monte Carlo tools advocated (based on mean and standard deviation inputs) intrinsically contradict this - they are built on the premise that failure is always possible (since they say that a portfolio can lose value year after year after year after ...). Does that mean that Pfau, like Bengen, was also wrong in concluding certain survival?
A problem is that by design, these simple tools are unable to conclude that survival is certain. Regardless of inputs. If you build a conclusion (failure is always possible) into a tool, you've rigged the results. You can't use these tools to "prove" that 100% success is impossible. They're unable to say anything but.
It's fine to use random number generators (aka Monte Carlo) to "run" models many times and see what outcomes might result. The problem is not in how models are used (trial and error - random numbers), but with the models themselves. Unfortunately these tools conflate the creation of the models with the Monte Carlo running of the models to generate a range of possible outcomes. Don't confuse a criticism of these tools with a criticism of Monte Carlo simulations.
These tools create simplistic models that usually assume each year's market's performance is independent and that returns are normally distributed (bell curve).
But data suggest that stock market performance is a leading indicator of business cycles. Thus stock market performance is itself cyclic (not independent from year to year) albeit with an upward bias.
"stocks as a whole move in advance of the economy" = AAII Journal, Aug 2003
As to the bond market, the trivial Monte Carlo models assume that nominal returns are independent of inflation. The Fischer hypothesis suggests the opposite.
"The Fisher hypothesis is that, in the long run, inflation and nominal interest rates move together." http://moneyterms.co.uk/fisher-effect/
The first paragraph by Pfau in his Forbes column says that the models need to include correlations - something that's antithetic to simplistic free Monte Carlo tools that assume independence of inputs in building their models.
His penultimate paragraph states simply that: "the results of Monte Carlo simulations are only as good as the input assumptions, ... Monte Carlo simulations can be easily adjusted to account for changing realities for financial markets."
It's certainly easy from a mechanical perspective to adjust the models (e.g. by changing the mean return for bonds). What's not easy at all is figuring out what adjustments to make. That gets right back to the results being "only as good as the input assumptions", or as I wrote before, GIGO.
Again quoting Pfau: "Many financial planning assumptions are based on historical returns; however, these historical returns may not be relevant in the future."
https://www.onefpa.org/journal/Pages/MAR17-Planning-for-a-More-Expensive-Retirement.aspx
At best, even if a model is good and analysis sound, all you're going to get is a sense of whether you're saving enough (i.e. what MikeM wrote). It's of less help during retirement because, as hank noted, extraordinary events happen.
I'm wondering who the unnamed "professionals in this field" are. Or even what "this field" is. But for the record - I've never taken a statistics course in my life. I'm just an individual investor like most people here, albeit one who did once ace a course in writing and research.

That article starts out as a wonderful (too short) interview with Bob Rodriguez... all of which sets the reader up for a sucker-punch "plug piece" for index funds...
"All of this means that most investors should, in fact, own index funds"
Too bad the article writer had to stick in his index fundamentalism.
===
Skeet, I endorse your comments.
Anecdote: I distinctly recall at the turn of the century, investment advisors who administered my, and my spouse's employers' 401k plans, offered regular hosted lunches to 'educate' we simple employees on the plans. Invariably, the subject of asset allocation would arise. Just as invariably, they would recommend extraordinarily high (for my comfort level) equity allocations. And they kept doing so -- all the while the dot-com stocks ballooned, and when it burst.
Fast-forward.. My current employer 401k administrator (Voya) continues to recommend very high equity allocations. (Even though, their website knows I am a short 3 years away from an early retirement.)
These high-equity recommendations are the industry standard. And what amazes me, is that the equity allocation recommendations seem to deliberately ignore how cheap/expensive equities are. Valuations are not part of their allocation modeling. Bizarre! -- What other industry can you think of, where the price you pay is not factored into the purchasing decision?

Why would anyone listen to Timmer? He ran a fund for several years and got booted off due to poor performance.

MikeM : It worked looking back 3 years, but will the results look the same going to the future?
Derf

@PRESSmUP , that is a great mix of midcaps no doubt. My point, if you built a simpler portfolio and you had only one of those midcaps, which would it be? POAGX you said you love so I'm guessing that one. So if you had conviction in your best choice, you would have returned almost 11% more over the last year and almost 2% per year over the last 3 years by not over-loading with multiple midcap funds (%'s base on an equal distribution between the 3). So I guess you proved my point. But again, the comfort - sleep well factor is very important also even if return may be lower. I'm not questioning that.

http://www.investors.com/etfs-and-funds/mutual-funds/winning-mutual-fund-focuses
Virtus KAR Small-Cap Growth Fund (PXSGX) may not be a household name. But it's a top performer. As of Dec. 31, the fund had outperformed the S&P 500 in the previous 12 months, three years, five years and 10 years. Here's how this fund kicks butt with a concentrated portfolio. Right now, it doesn't even half any holdings in four sectors.

"The referenced article is indeed excellent. That's why I posted it."
Nothing like modesty MJG. (And a reason some of us take umbrage with some of your posts).
MikeM termed the NYT article "very good". I termed it "good" - adding a reservation regarding source. I don't have time to enjoy the additional sources you've linked. I'm sure others will.
My contribution was mainly to show how each of us has a unique circumstance and unique needs in retirement planning. I shared more than I generally do in the hopes it might help others address their own varied needs. My purpose wasn't to support or condemn Monte Carlo. In fact, in my own case, I've run no simulations (other than in the back of my head from time to time). Period.
I'll defer to @msf on the overall merit and accuracy of the calculations presented by you and/or your sources. I've found his math skills over the years both considerable and commendable. By contrast, I barely survived high school Algebra with a C, and have assiduously avoided all math classes since.
Regards

Thanks @ Mike & Ol Skeet for getting this back on track. Agree it's a good article. I view most anything financial in the NYT times with a healthy dose of skeptism. They're great at a lot of things - but financial analysis and reporting isn't their forte. To the crux of the issue: I think where you run into problems is (1) trying to formulate a simple one size fits all approach to retirement drawdowns and/or (2) assuming the next 25 years will be like the last 25 years (interest rates, inflation, equity valuations, etc.).
I can't relate to the central question of how to survive "X" number of years on "X" number of dollars invested. Reason: I enjoy both a defined benefit pension with a partial COL rider and also a decent SS income stream. And, supplementary health insurance through retirement plan as well. Conceivably, these would provide for basic living expenses - though it would be a very "spartan" lifestyle without travel or other things that make retirement enjoyable.
In my highly atypical instance, even after taking distributions, retirement savings have roughly doubled over the nearly 20 years since retirement (albeit in nominal dollar terms only). At the same time, more than half of that has now been placed under the Roth umbrella, whereas at the time of retirement none was. Much of the reason for the increase is that the money was left largely undisturbed during the first 10 years.
As far as the article's mention that withdrawals are not linear or equal every year - I couldn't agree more. There have been years when I needed to take a larger sum - say as a sizable down payment on a new car or for unexpected home repairs - and other years when I've needed very little.
I don't envy those without a pension or other solid income stream in retirement. Not everyone would be satisfied with a somewhat spartan lifestyle either. As I look at the markets over the past 10-20 years, I'd not be eager risking a large retirement nest egg with an aggressive approach in retirement. Lots of warning signs IMHO. But, no one really knows. As I said at the start, the problem with these mathematical models is that the next 25 years could be markedly different than the last 25 - as others, notably msf, have tried to explain.

FWIW, getting back to the article, I thought it was very good. Basically, there are a whole lot of systems out there other than the strict, yet simple 4% rule. Some strategies give greater assurances then others for your money lasting through-out your retirement years. But no matter which you choose, there will always be risk of dying with only government assistance or being too frugal as to not enjoy retirement to it's fullest.
@CecilJK , thank you for contributing your system. I'd like to hear from others on their approach. Obviously there is no one way to do it. The ability or planned 'cushion' that would allow one to be flexible appears to be key.
As for Monte Carlo, I don't know a better, easier method that suggests if you are on tract with your savings versus retirement spending expectations. Is there one? There are no guarantees, but Monte Carlo at least supplies guidelines and gives at the very least, a ball park view.

No, Education IRA, those with $2k max limit. Fortunately, I started the accounts for both kids around 2009 (the lowest point of market) and contributed for 3 years, and that 6 thousand has become approximately $12k in both accounts.
Contribution to them is after-tax money, so as you mentioned, they are somewhat like Roth IRAs.

Hi @mrc70
You noted: " my daughter's Education IRA"
Do you mean a 529 "education" account or does your daughter have a Roth IRA that will be used for education?
Thank you.
Catch

"My goal was not to tout Mr. Bengen, but much more importantly, to encourage you Guys to try a powerful Monte Carlo simulation for planning purposes."
To that end, you cited one of the most well known papers on retirement planning as evidence of how well Monte Carlo works, even though it didn't use Monte Carlo. I pointed out that Bengen found zero real world return patterns where a 4% drawdown would fail (over 30 years); your response was to disparage the original work you cited approvingly.
It's enough to make one wonder whether you read the paper.
Instead of comparing and contrasting methodologies, you continue to effuse about Monte Carlo. Bergen took a different approach using using actual returns, that virtually everyone here can understand and use to draw their own conclusions.
In contrast, Monte Carlo spews out magic numbers (not unlike M* star ratings) that leave one to one's own devices to interpret. As guidance you proffer that you consider a 5% risk acceptable, but you didn't give any reasoning, rendering this fact useless. (I wonder why you used these 30 year projections at all; as I recall you've indicated an age which suggests that a 30 year horizon is, shall we say, rather optimistic.)
Even the probabilities posted are meaningless because unlike Bengen, you didn't state the assumptions you used, such as the input values for mean and standard deviations of stocks, bonds, and inflation. Nor did you even apply the same asset allocation that Bengen used.
Did you consider skew and kurtosis (the S&P 500 exhibits both)? Do you think that most people using these "push a button" tools even understand that question? (No disrespect of MFO readers is intended; many have stated that statistics is not their forte.)
The fact that a program can do thousands of computations in seconds is not so much a demonstration of the usefulness of a program as much as it is a testament to the operation of GIGO. A scalpel is a great tool in the right hands; in other hands it can be destructive.
When all one has is a hammer, everything looks like a nail.

For me ARTKX has been a core international fund for last several years. I tempted to split it across ARTKX and FMIJX in the 1-2 years, but controlled that urge. I bought VWIGX in my daughter's Education IRA a few years ago and it made good money in that account, and I added Vanguard International Dividend Growth index in my retirement account a few months ago.
SFGIX, ARTWX and GPEOX have been my EM funds. Though, sometimes I tempt to sell one of them and instead play with EM regions (Latin America, Asia and Emerging Euro) with TRow Price funds for a small part of my portfolio.

Why should the earnings yield on stocks be anywhere remotely close to interest rates on bonds when bond rates are contractually guaranteed by law for years in advance while stock earnings can fluctuate wildly from quarter to quarter? Should not the earnings yield on stocks be significantly higher than bond rates to justify the additional risk of owning stocks--the so-called equity risk premium? Moreover, there is no certainty that solid stock earnings now will ever be paid out to shareholders in the form of dividends or reinvested wisely to facilitate future growth. The Berkshire Hathaway example of it not paying dividends in the story is the exception that proves the rule. Few CEOs reinvest in their businesses as wisely as Warren Buffett has.