As I have expressed before, IMO; one may continue to name the ongoing markets since the big melt as still feeling the effects of policy(s) and that "this time is still different" and thus the "mean regression chart line" is progressive/dynamic, not static and has the baseline in "float" mode. The 2008/2009 market melt was/is an overwhelming shift in the financial marketplace that is still impacting and discovering its future path.
In other words, jolts to the market come along that can take years to work their way through. There may or may not be an ultra long term static "mean regression chart line", but at least for these multi-year periods, it's dynamic.
Even assuming an ultimately constant mean, because of these jolts it seems one needs an extremely long time frame to compute that average - say 100 years or more, in order to include the jolt of the Great Depression, or maybe 150 years back to the panics of the late 1800s, or ... At some point you're essentially averaging the entire "modern" history of the stock market.
More info from the 1928-present NYU/Stern data set I've cited (this table was in the spreadsheet, they're not date ranges I selected):

Period     S&P 500   3 mo Treas   10 Yr Treas
1928-2016  11.42%     3.46%        5.18%
1967-2016  11.45%     4.88%        7.08%
2007-2016   8.64%     0.74%        5.03%

. The S&P 500 is up "only" about 15% YTD. If it ends 2017 up 20%, that would raise arithmetic mean of 2007-2017 just to 9.68%. If you're a believer in a constant long term mean, that suggests that recovery from the 2008 jolt still has years to go.

Hi @msf
Thank you for your presentation.
I started this reply to the thread relative to the bond portion of this discussion. I've obviously blipped more just below.
What I'll name, The Exquisite Investor; being without much meaningful flaw as to getting the timing right 75% of the time and being patient enough to wait until the next trading (buy/sell) shows its face via technical numbers in particular, but with an understanding of real world events that can/do/may factor into why the technical numbers arrive and depart creating a more possible profitable investment.
I suppose this process could place this as to one being a "value" investor; being careful enough to try to understand that some "value" within investment sectors is cheap for a good reason and may remain cheap for a long time; a perverted "mean".
As I have expressed before, IMO; one may continue to name the ongoing markets since the big melt as still feeling the effects of policy(s) and that "this time is still different" and thus the "mean regression chart line" is progressive/dynamic, not static and has the baseline in "float" mode. The 2008/2009 market melt was/is an overwhelming shift in the financial marketplace that is still impacting and discovering its future path.
I may be completely wrong about any or all of this....tis my view at this time. @Tony may respond as to the technical side.
The below chart compare for about 10 years for EDV and SDY may surprise a few folks for total returns over the time frame. I recall @bee using EDV for reference points against other sectors for cross over points, etc. I fully expect most folks would not consider a holding as EDV or similar versus a more likely holding of a total bond fund or a 10 year Treasury fund for a bond area investment. One is able to view the movement of EDV and cross overs points relative to my pick of SDY for reference, especially during the ongoing turmoil of the markets for several years after the melt. Europe, in particular; was still attempting to find a path forward for several years, which includes events as "Greece" being in the news headlines as well as the ongoing, questionable stability of many European banks during the "recovery" period.
Yes, the 10 year Treasury will remain a reference point and this is valid for on overview of risk on or off conditions, but remains a choice of various bond types, eh?
http://stockcharts.com/freecharts/perf.php?EDV,SDY&n=2467&O=011000
Okay, time for another coffee, yes?
Regards,
Catch

@Crash
RBC appears to be more than fairly priced at this point in time. If interest rates really move upward over the next few years; one may have a chance to have some profit from current pricing levels.
http://stockcharts.com/h-sc/ui?s=RY&p=W&yr=5&mn=0&dy=0&id=p16334527354

Hi Guys,
Change happens; it is a certainty.
"Richard Russell, the famous Dow Theorist, once noted that over a shorter time frame almost anything can happen in the financial markets, but over much longer, meaningful periods of time (referring to years), the surest rule in the stock market is the rule called "regression to the mean.""
This quote was extracted from this regression advocating article:
https://seekingalpha.com/article/2315705-regression-to-the-mean-and-why-investors-should-not-ignore-its-importance
I am in complete agreement with the main theme of this article. There is a compelling and irresistible market pull towards a regression-to-the-mean. In any single year, almost any extreme is possible; anything can and does happen even if probabilities are low. But as the timeframe expands, the marketplace adjusts to deliver more predictable average returns. Over time, sanity rules.
I have zero confidence that I can predict tomorrow's market returns, but I am very comfortable about staying in the market for the loooong run.
Best Wishes

@msf, I understand that 10 years treasury is often used for illustration purpose. Would a total bond index make more sense even though it may not have the long history as treasury?

1. The objective is to get as much into the Roth as possible while paying taxes on $10K.
Using Bee's example, the current combined value of all five accounts is $61,830. If you recharacterize all but the one that did best (PRIDX), you wind up with $13,106 in the Roth and $48.724 recharacterized back to the traditional IRA. If you recharacterize all but, say, PRWCX, you wind up with "just" $11,206 in the Roth and $50,624 recharacterized back to the trad IRA.
Either way you pay taxes on $10K, but leaving PRIDX as the converted fund results in the largest percentage of your portfolio converted into the Roth for the same amount of tax.
That's not to say that you're stuck with these investments. You could choose to exchange PRIDX inside the Roth for PRWCX and/or exchange PRWCX inside the traditional to PRIDX, or anything else. Perhaps I should have said you pick the "subaccount" with the highest value to keep as a Roth, and recharacterize the others.
2. Bee mentioned that an objective is to keep income low enough to qualify for ACA subsidies. Getting $1500 out of a taxable account to pay for the Roth conversion could result in recognizing capital gains, and thus increase income. That extra income might disqualify Bee from any ACA subsidy. On the other hand, getting the $1500 out of a Roth account would not increase income, so the ACA subsidy would remain safe.
3. Say you have two funds each worth $1500, the amount of the tax. You expect the first to double in the next four years, the other one to grow by 50%. All else being equal, you'd rather keep the first investment and sell off the second, since you'd have more money ($3000 vs. $2250) at the end of four years. Of course there are other considerations, notably asset allocation and risk. In glossing over those considerations, I may have underestimated their importance.

DSENX has performed well during its nearly 4 years of existence.
I use the S&P 500 as a benchmark for this fund. Not an ideal benchmark, but for me, close enough. I've noticed that, over the past year or so, DSENX is barely outperforming the S&P 500.
I'm not going to make a sell decision based on the last year's performance, but I'm wondering how much longer DSENX's outperformance can last. Any ideas?

Amit Wadhwaney is mentioned in David's October commentary in connexion with preferring experience over inexperience. New funds run by older, experienced Managers. The link to his fund doesn't work. But I found this one: (retail shares.)
http://www.morningstar.com/funds/XNAS/MOWNX/quote.html
I'd hesitate more than a little, in this case. I fled TAVIX (Third Avenue International Value) in 2008 or 2009, after the fund--- managed by Wadhwaney--- started to tumble downwards. Yes, those were the bad years. But I distinctly recall that TAVIX was underperforming everything else I owned at that time. And I also distinctly recall being very patient, not rushing away from TAVIX just because of a few bad weeks or months.
The performance numbers for this Moerus fund are short-term, of course, since it is new. And those numbers look good right NOW. But why would I want to entrust money (again) with that particular fund manager, now? I'm aware that the Tweedy Browne shop has been in tumult, though perhaps they're back on track, more recently...

While the intent of that business insider chart is clear, the data are less so.
What stock market (US or global, S&P 500 or Wilshire 5000 or ...), and what bond market (ten year T-bonds, corporates, or ...)? If one uses returns of the S&P 500 and 10 year treasuries, the numbers don't match. They're not far off, but they show that at least this reader doesn't know quite what data were used.
What sort of rebalancing if any was done over the rolling 1, 5, 10, and 20 year periods? Nothing is said about this either.
Here's the data I used. It goes all the way back to 1928.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
Those older figures are important, because while returns since 1950 (a few years after WWII ended) have been "okay", earlier periods showed that the market can be even worse. Not that losing 2% each year for five years (cumulative loss of 9.6%) is that great.
It used to be we were told that "the stock market" (whatever that meant) never had a loss (ignoring inflation) over any ten year period since WWII (maybe that's what you were thinking of). But then 1999 - 2008 came along. And right after that, another rolling ten year nominal loss, 2000 - 2009.
There's a problem with putting too much faith in historical data. Things change. One can either ignore that, or adjust expectations accordingly.
We've had a 35-40 year bull market in bonds (with 10 year treasury yields now bouncing around 2%), that followed a 35-40 year bear market in bonds (that started in 1941 with yields around 2%). That's a looong cycle that should be incorporated into projections. There's no way that bonds can boost a portfolio's returns - they yield virtually nothing, and if the yield goes up, the total return could turn negative.
From the end of 1940 to the end of 1956 there were only two years where the total return of 10 year treasuries broke 4% (none 5% or more). Which gets us back to the question of whether these figures include rebalancing, and more generally, why even bother with bonds now? Cash isn't yielding that much less, and if interest rates rise, cash should track bonds. (In the 1940-1956 time frame, 3 mo treasuries returned 1.6% annualized, not much worse than bonds at 2.6%, and with virtually no volatility.)
The only cherry picking I'm doing here is with the end date of 1956. Bond yields bottomed out around 1941 at 2%, just as they seem to have done now (more or less). The graph below is ten year treasury yields over time.

@slick: Fantastic post!! I've always appreciated @Old_Skeet's discussion of his portfolio and sleeve system and this is right up there.
I have 22 funds and 16 stocks plus the cash in funds and that I hold in my IRA. I won't comment on the stocks except to say I should stick to funds and I'm glad I'm headed in that direction. Like you and others, I check performance but I tend to focus on slightly different things. I view the returns as a reflection of my asset allocation decisions and prefer category rankings when reviewing funds because the results can differ. For instance, 12 of my 22 funds have greater than 20% returns with 3 of those over 30%. Another 7 had returns greater than 10% and only 3 were between 0-10%. However, only 7 of my 22 funds are top decile in their category, 2 more are top quartile, 7 more are top half and 6 are doing pretty lousy with 5 of the 6 in the bottom decile of their category.
My 3 largest positions are 7-10% positions in my portfolio and their rankings are GPIIX at 40, POAGX at 24 and GPEIX at 90 (ugh!). If I screen out large cap emerging markets funds GP isn't doing much better but I'm a believer and the longer term record is still good so I'm not even close to thinking about giving up.
I'm overweight healthcare at 16.6% of my portfolio and that's been working really well especially with my 3 healthcare funds (HQL, SBIO and PRHSX) ranked top 1%, 8% and 32%, respectively. Half of my healthcare exposure is within other funds or a couple of the stocks but being overweight has helped a lot this year.
I'm also overweight emerging markets at 15.7% of my portfolio but while that should make me a big winner this year, all 3 specific EM funds I own (GPEIX, SFGIX, MEASX) are having tough years. Like with healthcare I'm getting exposure from other funds as well, some of which are having great years, but I feel like EM has been a disappointment.
I've had no bonds for years, often to my hindsight's regret, but I count cash in my IRA as an investment decision. Together with the cash in funds I own it's 15% of my portfolio and has been since the beginning of the year in rough terms. Overall, my returns on the 85% invested are very close to the S&P but considering my overweights to healthcare and EM should both be helping as well as getting a currency benefit from a 50/50 split between domestic and international investments, I would have hoped to be having a better year. Which brings me back to stocks...

Hi @Tony,
Thanks for the tip. It's much appreciated.
I'm not a trader but I still have the $2.00 bill that Ed Seykota sent me years back when I joined the tribe. "If I miss a set-up I await the next." Perhaps, it is time for me to revisit my spiff investing theme and 5,1 it.
Please keep posting.
Old_Skeet

Here's the full Natixis 2017 global survey report:
http://durableportfolios.com/global/understanding-investors/2017-global-survey-of-individual-investors-retirement-report
and the full Natixis press release on the US slice of that survey:
https://ngam.natixis.com/us/resources/2017-global-individual-investor-survey-press-release
(note that the table at the bottom of that US press release is global data, not data limited to US participants)
Just looking at the figures in the excerpt Ted quoted, my reaction was: what are these people smoking?
The historical real return of the US large cap market over the last century has been 7%. Depending on your source, bonds (10 year Treasuries) have returned between 2% and 6% less than stocks.
[See the stock link above: risk premium of stocks over bonds of 6%, historical nominal bond return of 5% with inflation average of 2%-3%, or simply the difference in nominal returns of stocks and bonds, which has been 2% or greater over the past 90 years.]
So even if the markets produce average real returns going forward (not expected over the next decade), you'd need a very aggressive (nearly all stock) portfolio to get to the 5.9% real return that advisors are supposedly predicting. (The 5.9%/advisors and 8.9%/investors figures are not in the Natixis releases, so they must come from the full survey.)
The FA Mag article says that there's a disconnect (51% difference) between investors and advisors, based on these two figures. If there is this disconnect, what does that say about the job that advisors are doing in educating and guiding their clients?
But there is another possibility. Investors may not understand what real return means, and are simply reporting nominal return expectations. That 3% difference would fall within a reasonable range of inflation possibilities. The Natixis report seems to support this interpretation of the data, as it observes that only 1/6 of Millennials (17%) "have factored inflation into their retirement savings planning." (The next sentence of the release hypothesizes a 3% inflation rate.)
Finally, note that the survey may not be representative of American households - just ones with money. It surveyed only investors with over $100K in investable assets. (About 30% Gen X, 30% Gen Y, 30% Boomers, 10% Retirees.) Most households don't have nearly that much in net worth let alone investable assets, though that's a whole 'nuther story.

So, an 8.9% return over inflation, eh? No mention of taxes on distributions or other withdrawals relative to the required annual real return %.
Wondering which Natixis choices will meet the requirements of the "investors" as noted in the article.
https://ngam.natixis.com/us/funds-by-asset-class
Presuming the respondents are all Natixis account holders in this survey and use Natixis advisors, too; and yet the respondents express, IMO; very conflicted opinions of what they think they understand about investing, trusting an advisor, and risk and reward to obtain the return.
Would be interesting to actually chat with these folks about where they obtain or rationalized "their" return goals.
Anyone here know of investment vehicles/choices mix over the many years, with nominal risk/reward that would provide an annualized return of 11.9% (3% average inflation over the longer term backwards looking) and without knowing about taxes on returns?
Back testing with cherry picking investment does not count; as the article is about forward returns, yes?
Well, anyway; another coffee here and to the great outdoors.
Regards,
Catch

Finally found a copy of the iMoneyNet taxonomy of enhanced cash vehicles:

• Cash plus funds - mark to market, seek $1 NAV, up to 180 day maturities
  
• Enhanced cash funds - floating NAV (like RPHYX), durations up to a year
  
• Ultrashort bond funds - floating NAV, durations 1-3 years

I'm still reading through the 10 page presentation. The list above came from graphic on p. 3.
http://www.imoneynet.net/mkt/pdf/2016-cpiwg.pdf

This article reminds me of a few of the misplaced,
misunderstood aphorisms that Wall Street has appropriated
from popular culture… since they have so few original ideas.
“Cash is King”
We all know that when the famous Bible thumping music critic
Chester Hunkelbum made that comment, he was referring
to Johnny Cash. How could he ever know that Wall Street
would steal and make it their own?
“It will not be broke by prophet”
Okay, Hunkelbum had bad grammar. But he was referring to
Abraham the prophet when he tripped and almost broke the
10-commandment stone tablet that Moses had placed in his backpack
for safekeeping. Along came some financial adviser who bastardized this
into something about not going broke if you take a profit.
“Every ship at the bottom of the ocean has a chartroom”
It’s easy to see how Hunkelbum became depressed years later when
struggling to maintain his credibility. The computer age was, as he said,
“uncharted territory”. As readers began logging off his web site,
he lamented, “We’re bottoming. Another ship has left the chat room.”
Leave it to Wall Street to snatch this comment and twist it to their liking.
We shall miss Chester Hunkelbum

Hi @johnN,
John thanks for posting the article on utilities. Eventhough utilities account for about 3% of the S&P 500 Index they currently make up about 7% of Old_Skeet's holdings. I'm thinking of raising my utility sector weighting by about (1%) by adding a mutual fund (AWTAX) that's theme centers around water.
Think about it ... the two or three things we widely use in our homes are electricty, natural gas and water (at least they are in mine). Heck, I even have and maintain a standby power generation system should there be a power outage at my home. Then there is the phone and internet that kinda follows utilities.
It is a bum deal for the rate payers in South Carolina that (Summner) a nuclear power plant will most likely never be completed. I'm thinking that the power companies owe the rate payers a refund for this power plant folly of their making. Instead the power companies want the rate payers to pay more for a plant that looks like it will never be brought on line. I look for things to heat up in South Carolina over this in the coming months as hearings take place in Columbia. While in North Carolina Duke Energy wants it's rate payers to pay for coal ash pond clean up that the utility mishandled through the years and are going to be very costly to clean up. Hearings are underway in Raleigh as I write concerning this.
If the rates payers wind up having to pay for these failures and follies of the utility companies ... I'm increasing my allocation in the utility sector. In a sence, I'll collect what I have to pay out through an increase in utility rates with their payment of dividends back to me as I own homes in both states.
For me, it is a no brainer ... own some utilities as the rate payers most likely will have to pay up.

I am a long time RPHYX shareholder, but have been reducing my position and am reconsidering its value. Originally its stated goals were (as David Snowball put it) 300-400 bps over money market. But as Junkster points out in this earlier thread:

This fund is not going to give you 3.5%-4.5% a year. I mean 2.20% over the past 3 years and 2.76 over the past 5 years. This year it is on track for around 2.80. Some of the Fidelity money market funds are now yielding over 1% (of course you will need a million dollars) And lesser money market funds yields are rising and will continue to rise with the increase in the fed funds rate. So no way 300-400bps over money market. Otherwise a fine fund with negligible volatility and way above money market returns (for now) This we can agree on.

Morningstar currently has this fund at 2.41% over the past year, 2.19% over the past 3 years and 2.58% over the past 5 years. Of course this is in part due to 2015, where there some investment mistakes resulted in a disastrous year (relatively speaking). However, just looking at the more recent returns, it doesn't seem like "300-400 bps over money market" has been a feasible goal for some time now.
I took a look at some of the recent manager commentaries on the RiverPark website, but they didn't seem to give much insight as to target return and whether they expect recent trends to persist. What do other folks think -- Is a return of 2.5% a more realistic expectation for this fund? Is it still worth sticking to around this level?

FTI: Exposure to one of the most highly anticipated technological trends of recent years will soon be available to investors in one of the most popular investment wrappers on the market.
Evolve Funds, an investment fund based in Toronto, is launching an exchange-traded fund dedicated to innovation in automobiles. The fund will hold companies “that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network connected services for automobiles,” per its prospectus.
It will begin trading on Friday, according to a Reuters report. Evolve Funds didn’t immediately return a request for comment or confirmation.
The Evolve Automobile Innovation Index ETF will trade under the symbol “CARS” and charge an annual expense ratio of 0.4%.
Regards,
Ted
http://www.marketwatch.com/story/think-driverless-cars-are-the-future-a-new-etf-lets-you-invest-in-them-now-2017-09-28/print

finally. it should have been put out of its misery years ago.

Thanks for all the replies.
Let me state this surrender charge applied to friends mother. If I understood her they were very high !!
I held my late wife's 401-k for a number of years to receive some extra guidance & liability issues. At this time I'm rolling that one & mine to Vanguard .
With that said , I was wondering if I'll get a closing statement or just a notice that the money has been deposited to my account from Vanguard ?
Also let it be known I received 10 pages on how to handle the rollover from her 401-k & next to nothing from mine other than the papers to fill out
Thanks again, Derf