FYI: (Click On Article Title At Top Of Google Search)
Actively managed mutual funds are poised to make a comeback after years of being trounced by ETFs. Seven great ones to buy.
Regards,
Ted
http://www.barrons.com/articles/stockpickers-delight-1483767162

FYI: In an exclusive interview, Ed Hyman, Wall Street’s # 1 ranked economist for a record 36 years describes how much the financial world has changed in the last year. He and top investor, Matthew McLennan describe what it means for the U.S. economy and markets.
Regards,
Ted
http://wealthtrack.com/u-s-growth-acceleratingu-s-recession-years-away-exclusive-outlook-from-wall-streets-1-economist-ed-hyman/

I have some dough in PTTRX, as it is my ONLY core-bond option in my 401k. So, like a lot of 401k investors, I am a bit of a captive-customer of it.
When Bill Gross left, I was hopeful/encouraged. His behavior & commentaries struck me as somewhat 'off' in the couple years leading up to his departure. From a p-r perspective, I thought it was smart to replace the 'bond-king' with not one, but THREE experienced managers Kiesel/Mather/Worah. And naming Ivascyn as PIMCO's CIO -- I viewed that as wise too. Then too, as PTTRX has been bleeding assets. -- M* always maintained it had too many AUM --- so presumably now, with its AUM considerably shrunken, it should be much more manageable, right?
Maybe my expectations for the new team were too high. -- In 2016, M* indicates PTTRX returned 2.60% vs the bond-index returning 2.65%. And PTTRX lags the index on a trlg 3-year bassis too. I know there is always a cost-drag, but then (successful) active-management is supposed to overcome that drag and then some.
Its doing 'OK', but given the more manageable size, 3 top-tier managers, and Ivascyn's leadership of the firm, I guess I expected a lot more of PTTRX since Gross departed. I admit to some degree of disappointment. Especially as PIMIX (which I hold in large positions in my taxable and IRAs) continues to regularly deliver multiples of the returns of PTTRX. I don't expect PTTRX to achieve returns comparable to PIMIX, but I am disappointed that given all the brainpower running PTTRX it cannot must meaningful, consistent outperformance vs a "dumb" bond index.
Would love to hear thoughts of other PTTRX holders, plus or minus. Am I being too stern of a critic?

FYI: Robert “Chip” Rewey was hired to turn around the Third Avenue Value Fund in 2014 after years of underperformance that was tied, in part, to a bad bet on Hong Kong real estate. The mutual fund rebounded last year after posting a loss in 2015.
Regards,
Ted
http://www.marketwatch.com/story/this-is-how-an-investor-turned-around-a-once-venerable-mutual-fund-2017-01-05/print

FYI: I will link episode as soon as it becomes available for free, early Saturday morning.
Regards,
Ted
January 5th, 2017
Dear WEALTHTRACK Subscriber,
Ed Hyman is cautiously predicting that the U.S. economy will grow a little bit faster this year and bring inflation and interest rates up along with it. As for the likelihood of recession, he believes it is several years away. This week, in what has become an annual WEALTHTRACK tradition, Hyman joins us for an exclusive two-part interview on the outlook for the global economy.
The founder and Chairman of Evercore ISI is a financial super star, having been voted Wall Street’s number one economist for 36 out of the past 37 years. His research is a daily must read for institutional investors all over the country if not the world.
Every year on WEALTHTRACK we also ask a top investment pro to join Ed, to put his macroeconomic outlook into investment perspective. This year another WEALTHTRACK regular, First Eagle Management’s Matthew McLennan is joining us.
McLennan is Head of the Global Value Team at First Eagle Investment Management, where he is also a portfolio manager for several funds, including the flagship First Eagle Global Value fund, which he took over from legendary value investor, Jean Marie Eveillard in 2008.
Rated Five Star by Morningstar, the Global fund is in the top decile or higher in its World Allocation category for the past one, three, five and ten year periods and is known for its above average risk adjusted returns.
This week our primary focus will be the outlook for the U.S. economy and markets. Next week we will concentrate more on international conditions, although we recognize they are all interrelated.
Hyman’s team expects the U.S. economy to pick up steam this year, forecasting real GDP- that’s excluding inflation- of 2.5% in 2017 versus an estimated 2% in 2016. They expect inflation to pick up as well, with the Fed’s favored GDP deflator measure rising from 1.5% last year to 2.5%. As for the Fed Funds Rate, they are looking for a sizable increase from around 0.60% to 1.35% by year-end.
The yield on the benchmark ten-year Treasury should rise half a percentage point from 2.5% in December to 3% by December of this year. And finally they expect profits to improve, estimating that the combined earnings per share of the S&P 500 companies will rise about 10% year over year.
Hyman is the first to admit that a lot can change between now and year-end, but eight years into an economic recovery he lists the mounting evidence of improvement, including his expanding list of American cities where business in booming.
If you miss the show on air this week, you can always catch it on our website. You can also view it on our YouTube channel.
As always, we welcome your feedback on Facebook, Twitter or via the Contact Us link on our website. We read all of your comments!
Have a great weekend and make the week ahead a profitable and productive one!
Best Regards,
Consuelo
Ed Hyman Video Clip:

"Snowball’s “publisher’s letter” shares a hard truth: despite everything you’ve heard in the past year, things are getting better."
I found David's post a necessary tonic and I applaud that, but I think if we are talking big picture as he does, we also have to look at the even bigger picture of this globalization jigsaw puzzle. There is no question that the level of extreme poverty has decreased worldwide because of industrialization and globalization. But that has had consequences environmentally, economically and politically for more developed nations where people are accustomed to living on far more than $1.90 a day. One of the best pieces I've read on the recent election is this one: newyorker.com/magazine/2016/10/31/hillary-clinton-and-the-populist-revolt
In it the author states:
"Earlier this year, an economist named Branko Milanović published a book called “Global Inequality: A New Approach for the Age of Globalization.” It’s a progress report on the “system” that Friedman heralded. Milanović analyzes global economic data from the past quarter century and concludes that the world has become more equal—poor countries catching up with rich ones—but that Western democracies have become less equal. Globalization’s biggest winners are the new Asian middle and upper classes, and the one-per-centers of the West: these groups have almost doubled their real incomes since the late eighties. The biggest losers are the American and European working and middle classes—until very recently, their incomes hardly budged.
During these years, resistance to globalization has migrated from anarchists disrupting trade conferences to members of the vast middle classes of the West. Many of them have become Trump supporters, Brexit voters, constituents of Marine Le Pen and other European proto-fascists. After a generation of globalization, they’re trying to derail the train."
So there has been a trade-off that has occurred between the world's wealthiest nations and the world's poorest and that has caused political upheaval. I cannot view that political upheaval as things getting better. Nationalism--a particularly virulent strain of nationalism in my view--is on the rise in several countries as a result. That has led to a level of geopolitical uncertainty we haven't seen in a long time. And yes the world has always been uncertain--this is a fact of life--but the stakes are higher than they've ever been. That's what's different--the stakes. The world is far more interconnected economically than it's ever been and the weaponry far more powerful than it has been prior to the advent of the nuclear age. Having unstable political leaders like Trump and Putin with such weaponry at their fingertips is not things getting better in my view. I reject notions to normalize these leaders. There is ample evidence they are not.
Then there is a larger question David touched upon of climate change. That is also part of the jigsaw puzzle because the economic growth that has lifted so many out of extreme poverty as David rightly points out is a primary cause of carbon emissions and climate change. While the poor in emerging countries have every right to have dreams of living middle class American lives, there is a realistic question as to whether the climate can take more than one giant economy where people live like Americans do. In other words, the world's addiction to economic growth has environmental consequences. This seems to me to be the primary challenge of the generations to come so long as we don't end up in a terrible war before then.
So no, I can't see things as getting better in 2017, not with a climate science denying, nuclear missile embracing jingoist in charge. But then I'm a journalist--a glass half empty guy on such issues--as David rightly points out most of the media is. Perhaps somewhere between the pessimists and the rose colored glasses is the truth.

Thanks for the reply Ol'Skeet. Figured maybe I was missing something along the line. I've no "dog in the fight" regarding bonds. I guess most so-called "experts" think they're heading up for the long term. But who knows?
I still like my DODIX - which probably fits the description you just gave. They've held it pretty short in recent years out of caution, but suspect they're beginning to reach out a bit more on the yield curve now. However, I don't expect to make money every year on that fund. Just looking to do a bit better over time compared to what cash would yield.
Thanks again for the response.

Hi @MikeM,
I look to invest with bond fund managers that hold for maturity. In this way there is no loss to be had by holding a bond to maturity unless a premium was paid at time of purchase.
Old_Skeet

I can probably muddy the discussion further :)
If a manager experiences big outflows from his/her open-ended bond fund over a protracted period during which a large number of investors are selling fund shares (essentially a one-way street), how can he elect to "hold" his bonds to maturity? At some point he has to start selling to meet redemptions, even at a loss.
I suppose it wouldn't be much of an issue with closed end funds or ones that stick with very short term duration. But all the conventional wisdom I've read over the years tends to support Mike M's point that bond funds behave much differently than bonds - especially during periods of rapidly rising rates.
Perhaps I'm misreading the thread. If so, kindly so inform.

http://www.marketwatch.com/story/jack-bogles-secrets-to-becoming-a-winning-investor-2016-12-20?siteid=yhoof2&yptr=yahoo
"Talk to Jack Bogle long enough and you get the idea that he never gets the answer wrong — he simply tells the right answer to come back when it’s ready for him. It’s not that Bogle, the venerable 87-year-old founder of the Vanguard Group, the world’s largest mutual fund company, has always been right, but investors have always been able to count on him for straight talk and answers that, when relied upon as investment advice, feel right over time. As the man who started the index revolution more than 40 years ago, Bogle is a one-of-a-kind investor resource, and he’s still as fiery as ever when it comes to his views about Wall Street and the mutual fund business, investors, the index revolution"

QRSVX is a solid pick also. I have been in FMIMX for about ten years now

@ron,
Yes on the fixed income but no on the duration. One fund I am using, AMJVX, has a duration of just over 4 years. The other does not show a duration. Also my blend of equities and fixed income will vary as the managers adjust the portfolio.

Hi @ron,
Not JohnC,
As of 12/30/2016 my average duration within my overall portfolio is 3.4 years with an average maturity of 5.7 years according to Morningstar Portfolio Manager. Within my income sleeve I'm finding an average duration of 2.6 years with an average maturity of 4.6 years.
Since, I am not active on the fixed side of my portfolio like I am on the equity side I plan no changes on the fixed side in my funds; and, I will let my bond and hybrid fund managers determine how best to proceed concerning bonds.
However, if I were to do anything, I would add to my bank loan fund.
Old_Skeet

@Hank, you may need a little coffee this early in the morning. 2/15/12 to today (1/3/17) is a tad under five years, not four. What was that about calculators? :-)
Glad to see you mention that "true" (compounded) interest rate is a bit lower than the (arithmetic) average rate you computed.
For example, if a fund doubles in value, then doubles again, it's going from $10K to $40K in two years; a gain of $30K. That "averages" $15K/year, or 150% of the initial investment each year. But the compound rate is "just" 100% (we assumed an annual doubling).
Like yours, my eighth grade math teacher was also one of my best. I used to stay after school doing math puzzles with my teacher. No, not a crush, I really did like this stuff. Now my 10th grade teacher, that was one to have a crush on. But I'm still miffed at getting my lowest math grade, ever, from that teacher.

Good year, in 2016. I've been in it for a bit more than 4 years. Is it really up by about 15% in 4 years---or so? Double checking myself.

Lipper shows $10,000 invested in this fund at inception on 2/15/12 to be worth $12,368 today: http://funds.us.reuters.com/US/funds/overview.asp?symbol=SFGIX.O
Here's how I learned to do percentages:
1. Subtract initial value from current value = a difference of $2368 (represents gain).
2. Divide the gain ($2368) by the initial investment ($10,000) = 0.2368.
3. Shifting decimal 2 points to the right gives you the 23.68% increase in value since inception.
4. Dividing above by 5 (approximate years of existence) gives a very rough (slightly understated) return of about 4.74% per year.
You can further refine this by dividing that 23.68% increase in value by 58.5 (the approximate number of months the fund has existed) resulting in a monthly gain of aporoximately .405% and than multiplying that by 12 (number of months in a year) to arrive at an annual average gain over that period of: +4.86%. Geez - Considering the amount of risk assumed in investing in emerging markets, I'm not impressed.
Regarding Balvenie 12-year (from your later post), a check of the store shelf finds that selling for about $50 locally. The best I can afford, occassionally, is Tomatin 12 year, selling locally for $33. Doing the math I find your single malt priced about 51.5% higher than mine. I'm sure you find it better tasting.
I learned my best math from Miss Milton in Eigth Grade back in the late 50s. (She was actually the school librarian.) My high school math teacher, by contrast, was a dork. And, can't remember taking any math classes in college. I'll say, if you needed to do any math back in my younger days before the electronic calculator was mass marketed to the public it was quite an experience - and one you younger folks probably can't remember. :)
** There are several different ways growth can be expressed in percentages. For example, the figure I got is not the compounded rate of growth which I believe would be lower. But I still think my method useful for providing a rough comparison of performance with other funds during the same period. As for SFGIX: This fund is outside my normal risk perameters in retirement. While I might speculate in small amounts on this type of fund for short periods, it wouldn't do much for peace of mind or ability to sleep at night.

LIBOR At 1% For First Time In 7 Years - A Significant Level For Leveraged Loans
Copyright © 2016 S&P Dow Jones Indices LLC
During periods of rising interest rates, the base rate will also increase, creating a coupon rate that keeps pace with current interest rates. Hence, the appeal of floating-rate loans in rising-rate environments.
Leveraged loans (also called bank loans or senior loans) are a particular type of floating-rate instrument. These are loans that are typically taken on by firms with higher existing levels of debt (hence the use of "leveraged" in the name). However, the loans are senior in the capital structure and are often secured by assets of the borrowing company.
Due to the floating-rate characteristics discussed previously, leveraged loans tend to perform well in environments of rising rates (or expected rising rates). http://seekingalpha.com/article/4033644-libor-1-percent-first-time-7-years-significant-level-leveraged-For the year, US junk bonds topped the list. Markit’s iBoxx Liquid High Yield Index surged 15.3% in 2016, beating the 12.8% increase for the number-two performer (US stocks via the Russell 3000) by a comfortable margin. The only loser among the major asset classes last year: cash (3-month T-bills), which inched down 0.1%.

src="https://staticseekingalpha.a.ssl.fastly.net/uploads/2017/1/2/saupload_gmi.02jan2017.png" />loanshttp://www.capitalspectator.com/major-asset-classes-december-2016-performance-review/

Good year, in 2016. I've been in it for a bit more than 4 years. Is it really up by about 15% in 4 years---or so? Double checking myself.

Are you really trying to buy in and out of active funds on an annual basis? IMO, that is a losing formula...

"While any time of the year can prove to be a worthwhile time to consider changes to your investments, the start of a new year typically seems to arouse the most interest for this kind of activity. It is at this time that it has become clear which investments excelled in the prior year and which didn't, perhaps suggesting the new year will follow suit."
Thanks for the read Ol'Skeet. I think most would agree that this is a good time to think over our allocation to various assets. You've linked a very in-depth article for those who care to read it.
I'd agree that valuations look cheaper abroad - but come not without risk. Recently opened a small position in PIEQX - an international equity index fund. It's gone nowhere for several years now and impresses me as perhaps a "sleeper" in the realm of fund opportunities. To some extent I'm betting the Dollar won't continue to strengthen against these other currencies much longer. Since the amount is small, won't lose any sleep over this one. If it drops 10-20%, might buy a bit more.
Regards

Good year, in 2016. I've been in it for a bit more than 4 years. Is it really up by about 15% in 4 years---or so? Double checking myself.

I guess in the age of near-ZIRP 3-4% is considered a 'massive' dividend. Speaking for myself, that's always been my floor when evaluating dividend stocks for the long term, plus their growth prospects/trends. (Several of these stocks I've owned for years, btw.)
NHY to all MFO'ers!

erudite

It fascinates me that people obsess about round numbers on indices.

It is fascinating isn't it? Not just stock indexes. Toss in 50th anniversaries, turning 70 or 100, or becoming a millionaire - to name a few. The goverrnment, however, seems not to have such fixation. Witness the 70.5 years of age RMD requirement or tax brackets like 28 and 33%.
Is Dow 20,000 meaningful? Hardly. But if it's like Dow 10,000 the gang at CNBC will celebrate. Unlike your 50th anniversary, they'll probably get to celebrate Dow 20,000 more than once.
There could be a psychological aspect to all this that will motivate those investors who are less erudite than we to throw caution to the wind and start pouring money into an already hot market, driving indexes even higher for some period of time. Or, I suppose, the opposite may also accur - with the daunting figure stoking fear in the hearts of many and causing stocks to sell off.