I think we can all agree that the last 10 years have been abnormal... GFC, elongated recovery boosted by QE. I have no crystal ball to tell you when things will turn, but I do believe they will and we will all be on this forum posting about our low (maybe negative) absolute returns.

@Lewis: No question Greenlight Capital has an outstanding record with an annualized return of 16.1% since it's inception in 1996. However, its a question of what have you done for me over the last ten years, not much !
Regards,
Ted Greenlight Capital S&P 500
3-Year Cumulative -7 (-2.4%/year) 29 (8.9%/year)
5 Year Cumulative 19.1 (3.6%/year) 98.2 (14.7%/year)
10-Year Cumulative 55.6 (4.5%/year) 95.7 (6.9%/year)

https://www.gurufocus.com/profile/David+Einhorn
Einhorn’s Greenlight Capital was funded in 1996 and through August 2006 had stellar 29% annualized returns. Since then not so stellar ending 2016 which shows a NEGATIVE 2.4% annualized for three years, +3.6% annualized for five and +4.5% for ten.

Many of us fail to take a long-term perspective and view things over a full market cycle. I'm a firm believer that things will inevitably turn and a lot (not all) of these hedge funds that investors have rapidly fled from will prove they are actually effective investments. This will ultimately lead to investors piling in again, chasing returns and in 10-15 years we will go through the process again. "It's like a circle."
https://youtube.com/watch?v=qmzxR0zfIN0

https://www.thestreet.com/story/1305526/1/make-a-bundle-on-the-sps-rejects.html

The S&P 500 is often mischaracterized as a passively managed index of large stocks, but in 2000, its managers became seriously aggressive -- adding (and subtracting) four new stocks each month, on average. In the process, the index was systematically stripped of small and mid-sized value stocks from Jan. 28 to Dec. 11 in favor of large-cap growth stocks -- largely from the technology sector, and at exactly the wrong moment.
You didn't know that stocks are sometimes removed from the index for subjective reasons, just as they are at any ol' mutual fund?"

2000 was merely the culmination of five years of irrational exuberance on the part of the S&P committee: "Starting in 1995, it has evicted old stocks from the S&P 500 and stuffed in new ones at an unprecedented pace"
http://money.cnn.com/2001/06/13/zweig_on_funds/zweig_on_funds/a.htm (Jason Zweig)
----
"Good luck on picking a recent winning fund and having that fund repeat its superior performance."
Do I detect a bit of bias? Many of us look at length of management (irrelevant to recent performance), MPT statistics (generally not even available for recent periods under three years), etc.
M* analysts, for whatever else you may think about them, often award gold and silver metals to funds with abhorrent recent performance. YACKX (gold, 87th percentile YTD), BERIX (silver, 91st percentile YTD), DODBX (gold, 77th percentile YTD), FMIJX (gold, 97th percentile YTD), MAPOX (silver, 77th percentile YTD), OAKLX (gold, 89th percentile YTD).
Recent winning performance is not a necessary condition for selecting funds going forward, and I doubt many people here constrain their selections so narrowly.

Hi Guys,
I apologize if these S&P study results were previously posted on MFO. I miss plenty, but much more importantly, the S&P findings conclude that active mutual fund management misses even more. Here are two recent research Links from that firm.
The first essentially concludes that globally about 95% of actively managed funds underperform their Index over periods that exceed 3 years. The specific numbers change but the underperformance is dramatic, is persuasive, and is not too surprising. The second Link talks about fund performance persistence. Again, a very dismal set of statistics is presented. Persistent superior performance simply does not exist, with perhaps a very, very few exceptions.
https://us.spindices.com/documents/spiva/spiva-us-year-end-2016.pdf
https://us.spindices.com/documents/spiva/persistence-scorecard-december-2016.pdf
Enjoy, but much to much detail in these reports. However, the bottomline conclusions are significant and easy enough to understand, Owning a portfolio of actively managed mutual funds is likely ( high probability ) a losers game. Good luck on picking a recent winning fund and having that fund repeat its superior performance. The outlook is not encouraging given the probabilities and the potential excess plus or minus returns relative to a fair Index.
There's a simple solution here.
Best Regards

Cash is trash? That’s a dumb statement.
I wouldn’t tell that to my 88-year old widow neighbor. And while something surely will outperform cash over the next decade, it’s a fool’s errand to pretend to know which asset. Bonds are overpriced. Equities probably so. That leaves real estate, industrial metals, agriculture/timber resources, precious metals and energy. My guess is it’s one of the last group - but only a guess. That’s a pretty short interview. Dalio didn’t say, but I’d have to think a hedge fund would use cash at times while waiting for better opportunities to come along. Another approach is to sell markets short - but it’s expensive and can be deadly if you get caught leaning the wrong way.
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Added 10/29 The comment by Dalio prompted me to look back in time. Had he said “Cash is trash today” he’d be nearer the mark. Those with short memories may not recall that we got into this situation because Dalio’s “superior“ asset classes mostly crashed and burned beginning in late ‘07 and continuing until March ‘09 when they began turning up. Today’s 1% cash rates are mostly the result of intense efforts by central banks around the world (and here at home) to reflate those assets.
Here’s a link to a longer term interest rate chart. Note that cash wasn’t always so trashy. For many years, especially in the ‘80s bank CDs of relatively short duration yielded in the vicinity of 7-12%. The chart doesn’t show money market fund yields. But my memory is that money market fund yields of 15% or higher were common for several of those same years. http://www.bankrate.com/banking/cds/historical-cd-interest-rates-1984-2016/
Is cash a good inflation hedge? No. Do yields on cash roughly track inflation? Yes. Looking to diversify further, a few months ago I added a limited term bond fund (OUSGX) to the small segment of my portfolio earmarked as an inflation hedge (areas expected to outperform during times of higher inflation). It joins a global bond fund, real estate, a real asset fund and an infrastructure fund in that category. Yield isn’t great right now (around 2%) but it would likely increase if severe inflation were to return.
As a daily reader of one European newspaper, I can tell you parts of the continent, notably the UK, have been dealing with meaningfully rising inflation. I’ve seen anecdotal signs it may be stirring in the U.S. In specific: lumber and construction supplies and fresh produce. The later may be linked to the reduced number of temporary immigrant farm workers coming into the U.S. for harvest and other ag functions.
Sorry so long winded.

I have, what I consider to be, a great fund SVAAX (Federated Strategic Value) that uses both dividend yield and dividend growth strategies plus it pays a monthly distribution with a current yield of about 3.2%. I have owned this fund for better than eight years and my cost basis per share is about $3.80 with a current price of $6.35. My brokerage account statement reflects my annual rate of return on the fund at about 13.0%.
With this, I'm thinking as @Mark wrote above ... "one can have both." But have ... "Patience" ... "Trust the Process" ... "Time to Execute" ... etc.
Indeed, from my perspective, the fund has served me well and makes up about a 50% position in my growth & income domestic equity sleeve. It's other two sleeve members, at about 25% each, are ANCFX (growth strategy) and FDSAX (yield strategy).

Dividend investing strategies have a strong appeal for retirees. As I approach retirement – I am uncertain how to design one that takes into account the ongoing interest rate increasing cycle. I would appreciate thoughts on how others are planning to navigate it in the next few years.

@Kaspa,
Lost medical receipts might be retrievable by finding past checking statements (my bank keeps these available online electronicly in pdfs going back multiple years). Once you identify a lost payment save as a pdf (download to a storage device or the cloud). Also, lost payment records by credit card can be retrieved similarly.
You might even be able to ask your dentist's/doctor's office or hospital billing department to retrieve patient payments.
Items and services that are reimbursable are linked here (Qualified medical expenses):
hsacenter.com/what-is-an-hsa/qualified-medical-expenses/
H.S.A can be very helpful after age 65:

Many out-of-pocket expenses qualify for tax-free H.S.A withdrawals even after you’re on Medicare. You can use the money to pay premiums for Medicare Part B, Part D prescription-drug coverage or all-in-one private Medicare Advantage plans (but not for medigap premiums). You can also use the money for co-payments and deductibles you pay for medical expenses, out-of-pocket costs for prescription drugs, vision and dental care, and even a portion of qualified long-term-care premiums ($3,500 in 2012 for people ages 61 to 70, for example and more if you’re older)

Article:
health-savings-accounts-after-medicare
IRS Link to Pub 502:
https://irs.gov/pub/irs-pdf/p502.pdf

The brokerage account offers SIPC protection. The regular account does not. Although this is probably no issue given it's Vanguard I'd rather have the protection than not. This advantage outweighed any disadvantages in my case so I made the switch years ago when first presented with the option.

Wow @Roy - you got an early start! Let me take a wild guess - did you invest in Fidelity Magellan?
I first started investing via mutual funds through Prudential-Bache. I believe the first mutual fund my account executive put me in was Templeton Growth. It was probably 10 years later I withdrew my account and invested directly via no-load funds, mainly Janus and Acorn at the time. Today, all of our investments are with T. Rowe Price, Pimco and Grandeur Peak via online broker TDA. What a head spinning evolution!

Thanks for posting, Ted. This is a fascinating topic, and one that I've spent a lot of time pondering.
Faber & Gray are smart guys. But they only told half the story. Buffett recognized that paying dividends robs the investor of the magic of compounding (in addition to imposing current tax liability). Imagine how contrarian that concept was 50 years ago!
As a result of Buffett's rationale, for a long time I never focused on building a dividend stock selection strategy (even though I knew that Buffett did not confine himself to non-dividend paying stocks).
Awhile ago, however, I came across the ideas of Geraldine Weiss, particularly that a stock's dividend yield cycles between highs and lows like PE ratios, and that high relative dividend yields can be a proxy for value. This led to the creation of a very interesting dividend model that produced far more capital appreciation than income in our testing.
So when I read Faber and Gray pit value against yield, my initial thought was "why not both?"

PBKCM,
Welcome to MFO, appreciate your participation and unique perspective. I've been investing in mutual funds since probably 1982 (19 years old).
What all goes into determining position size of an investment in your mutual fund?
Thank you!

As a public service, here is the elusive Q-39, in it's entirety:
Q-39. When must a distribution from an HSA be taken to pay or reimburse, on a tax-free basis, qualified medical expenses incurred in the current year?
A-39. An account beneficiary may defer to later taxable years distributions from HSAs to pay or reimburse qualified medical expenses incurred in the current year as long as the expenses were incurred after the HSA was established. Similarly, a distribution from an HSA in the current year can be used to pay or reimburse expenses incurred in any prior year as long as the expenses were incurred after the HSA was established. Thus, there is no time limit on when the distribution must occur. However, to be excludable from the account beneficiary’s gross income, he or she must keep records sufficient to later show that the distributions were exclusively to pay or reimburse qualified medical expenses, that the qualified medical expenses have not been previously paid or reimbursed from another source and that the medical expenses have not been taken as an itemized deduction in any prior taxable year. See Notice 2004-2, Q&A 31 and also Notice 2004-25, for transition relief in calendar year 2004 for reimbursement of medical expenses incurred before opening an HSA.
Example. An eligible individual contributes $1,000 to an HSA in 2004. On December 1, 2004, the individual incurs a $1,500 qualified medical expense and has a balance in his HSA of $1,025. On January 3, 2005, the individual contributes another $1,000 to the HSA, bringing the balance in the HSA to $2,025. In June, 2005, the individual receives a distribution of $1,500 to reimburse him for the $1,500 medical expense incurred in 2004. The individual can show that the $1,500 HSA distribution in 2005 is a reimbursement for a qualified medical expense that has not been previously paid or otherwise reimbursed and has not been taken as an itemized deduction. The distribution is excludable from the account beneficiary’s gross income.

No time limit. The only requirement is that you must have opened the HSA (or its predecessor, if you moved accounts) prior to incurring the qualified expenses.
So if you opened your HSA in May 2010, then you can hold onto all those bills and proofs of payments from May 2010 on, and use them to justify HSA withdrawals that you make in 2025.
This seemed too good to be true, so years ago I bookmarked an IRS publication on the subject. Look for Q-39 in this 2004 IRS Bulletin:
https://www.irs.gov/irb/2004-33_IRB
"there is no time limit on when the distribution must occur"

FYI: Robo advisors are undoubtedly responsible for some of the most important changes in the financial industry over the last few years. More transparency, lower fees and at least part of the rise in passive investing can be traced to them.
But now there’s a bigger question. Are robos becoming the more expensive option?
Regards,
Ted
https://www.bloomberg.com/news/articles/2017-10-26/in-the-battle-for-low-fee-financial-advice-diy-beats-the-robos

FYI: In normal times a bullish sentiment reading of 40% wouldn’t be much of a big deal, but given the state of sentiment over the last several years, 40% is now considered an accomplishment. In this week’s sentiment survey from AAII, bullish sentiment increased 1.7 percentage points up to 39.6%. That represents a five-week high, but also a record 147 straight weeks where bulls have failed to be in the majority.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/bullish-sentiment-approaches-40/

FYI: The wait is finally over for the highly anticipated debut of USAA as an ETF issuer. After more than three years since they first requested permission to bring ETFs to market, USAA is listing today its first six ETFs on the NYSE Arca.
Regards,
Ted
http://www.etf.com/sections/daily-etf-watch/usaa-launches-first-etf-lineup?nopaging=1

I ignore Morningstar. But then, I ignore most “authority” figures.
Geez - What’s wrong with reading the Prospectus and the most recent Fund Report to see if you can live with the stated fees, have confidence in their investment approach, and desire to own the assets the fund holds?
Oh - Almost forgot: The Prospectus shows the fund’s returns for the past 10 years - which ought to prevent even the least circumspect of individuals from bumbling into something like HSGFX.