Thanks @davidmoran. I'm sure there are better books than the one I linked.
Funny example BTW. Reminds me ...
Off topic ... But I've been reading Dicken's Hard Times.
There's a hilarious scene where the ultra-conservative (English) schoolmaster asks a young girl to define "horse." While she's helped her father breed horses for years and is familiar with them in ways the schoolmaster is not, he humiliates her in front of the class when she can't offer up an appropriate text-book definition of "horse."
Apologies to @MJG for all the diversion. I will look over the comparison in the linked article and try to respond to the essence of it when I find time. (I'm actually at the gym right now) :)

Yeah - if you can get a "high number" R-class (ie, R-5 or R-6) w/the AFs you are in good shape. I've got R-6 shares (no load, no 12b1, VERY low ER) in my 403(b) and am quite pleased.

I'm investing in the Balanced fund (class R shares) in my 401k account with my current employer. The fee is pretty low for that share class. We only had American Fund choices and I chose this fund as being relatively reliable.
This is a job to tide me over until actual retirement in five years or so and I'm just putting in the 6% to get the match. It is all going into this fund and I've been happy with it so far.

I'm investing in the Balanced fund (class R shares) in my 401k account with my current employer. The fee is pretty low for that share class. We only had American Fund choices and I chose this fund as being relatively reliable.
This is a job to tide me over until actual retirement in five years or so and I'm just putting in the 6% to get the match. It is all going into this fund and I've been happy with it so far.

"With this, I'm thinking there is just no "free lunch" for the American Funds small retail investor. However, I do admire you for trying to find one."
Well, you are paying a 12b-1 fee (F-1 shares) that goes to brokers for NTF shelf space, so it's not exactly a free lunch. But that lunch doesn't cost more than dining on, say, DLTNX or any other NTF fund that's paying for shelf space.
Schwab and Fidelity offer 57 American Funds NTF (e.g. CIBFX at Schwab and at Fidelity). This is a new arrangement that was set up a couple of months ago.
Note that this is not the first time that American Funds has made class F shares available NTF. Around 2004, American Funds sold the shares NTF through some lesser known brokerages. It took me a fair amount of digging to find any info, but apparently this fact had been posted to misc.invest.mutual-funds in mid-2004 with a link to Firstrade's American Fund page.
That link no longer works, of course, and Firstrade is not one of the brokers American Funds is working with this time around. Also back then, the shares were called class F. It wasn't until a few years later, when American Funds added class F-2 (F shares without the 12b-1 fee) that the name was changed to F-1.
I know you can't believe everything you read on the internet, but if I see something that I had posted myself, well that's good enough for me. :-)

Hi Mark, Hi Hank,
Thanks for reading my post.
Please take a second look at the referenced article. It has both data for several,extended timespans up to 10 years, and does include a definition of the Bogle Model,which was invented by the author.
The 3 and 5 year data show that the simple Bogle portfolio that contains 3 Index funds outdistanced 75% of the top quartile of endowment funds and just marginally lost to the top decile of endowment operations. At the 10-year comparison period, the Bogle Model even outperformed that top decile endowment group. That's impressive. Simple beats complex!
A definition of the Bogle Model is provided at the bottom of the article. It is 40% of the US stock index fund, 40% total bond index fund, and 20% total international stock index fund. That's a respectable benchmark that is easily implimented by individual investors.
My portfolio is a little more complex with a mix of actively managed and passive products.
Thanks again for taking an interest in the post.
Best Wishes
EDIT: Sorry guys for my belated reply which was already covered by quicker. MFOers: That seems to be a constant with me: a dollar short and a day late. Thank you all for your help.
EDIT 2: Hank, the article did link Vanguard and the Bogle Model. To quote: " As I’ve done in the past, I broke down these numbers to see how things stacked up against a simple Vanguard 3-fund portfolio* which I have labeled the Bogle Model." That quote was just above the first table in the article.

Interesting. That 'alternative' stuff will get you every time.
Seriously though, I couldn't tell from the article but it seemed as though Mr. Carsons conclusions were based on the past years results. If so, what happens when you stretch that out 3, 5, 10 years and beyond? One commentator suggested that commodities might make up the bulk of those alternate investments and the current down cycle in same explains the poor comparison showing of endowments vs Bogle. Year by year that could have an affect if one is caught leaning the wrong way but it might balance out over the long run.....

Hey American Funds - first timer ... (aka @VintageFreak),
Better take a closer look at those F shares ... I'm thinking most F shares are C share converts and the only way to come by them is to first buy C shares and over time (10 years) let them convert to F shares. Not sure if this is so; but, if you are sincerely interested you might pick up the phone and call American Funds to comfirm or dispel. Their listed phone number is 1-800-421-4225.
In addition, I believe, some F shares can be bought out right and are for advisor wrap account purchase programs. So, I'm thinking, although the F shares expense ratios might be low compared to A shares with sales loads some F shares will be subject to on-going advisor/broker wrap account fees and charges. Invest a million with them and I believe they will wave sales charges on their A share funds.
With this, I'm thinking there is just no "free lunch" for the American Funds small retail investor. However, I do admire you for trying to find one.
Skeet

Am Funds is primarily a large cap shop. That is their bread and butter. Some years they will do a bit better than their benchmark, some years they underperform some. As another poster said, when you own hundreds of stocks, it is darned hard to consistently beat the index. And if there is no downside outperformance, and since the fees are still higher than an index, for me it's almost a no-brainer. Go with the index fund.

Dear friends,
There's always a balance between broader issues and discussions of individual funds. This month tilted in the direction of funds.
AMG Chicago Equity Partners Balanced (MBEAX): a singularly low-profile, low-risk balanced fund. US equities, including a larger serving of small and mid-caps than most, plus high-grade bonds. For any comparison period that takes down cycles into account, it has gold performance. For comparison periods that look narrowly at periods marked by rising markets (the easy-to-find 1/3/5 year stuff), it's a notch down. Even in those markets, it's risk-adjusted returns are better than its peers or Vanguard STAR.
T. Rowe Price Global Multi-Sector Bond (PRSNX): formerly TRP Strategic Income, we profiled it in 2011 and I own it in my retirement portfolio. It's the first in a series of profiles labeled "left behind by Morningstar." As Morningstar focuses more resources on passive products and big funds, bunches of funds that it once recognized by meritorious get dropped from coverage. In 2011, their final word was "promising but it needs a longer track record before we upgrade it." Five years later and it's a consistently top 10 fund but still no notice.
GQG Partners Emerging Equities (GQGPX): An Elevator Talk with Rajiv Jain about his new fund.
Symons Concentrated Small Cap Value, Institutional: an interesting possibility. It'll be by far the most concentrated small cap fund out there and is based on a successful small SMA cluster. $1 million minimum, so it's mostly FYI.
Osterweis Emerging Growth (OSTGX): just wanted to share word of Jim Callinan's return with the rest of the world.
My essay mostly focused on the wisdom of keeping your head when all those about you are losing theirs. Ed addresses the ugly reality that a number of big name firms are likely in their last decade. And Bob C begins walking folks through the decisions to be made in the transition to retirement.
For what interest all that holds, and with thanks for your patience and good spirits,
David

Harvard is having problems attracting good in house talent to mange the money because the faculty and students go ballistic when they hear that someone who can deliver market beating returns will not work for less than 2 or 3 million a year. Add to that the fact that every faculty member thinks s/he can do a better job
Yale' David Swensen figured this out years ago. Run a low key inexpensive shop. The Investment manger scouts for talent and then hires the best to run the money independently. It is hard for all the lefties to complain when all they see is 8 to 12% returns year after year... They do not know that the outside manger is getting 2 and 20
Swensen however is a Prince. For years he worked for $1,000,000 ( which goes farther in New Haven than Boston .. I should know I live in New Haven) I think they finally gave him a raise

I have been in and out of AF over the years, but usually when I was using a broker who pushed them. I never found them to be very helpful or much better than an index fund.
It is hard to imagine how any fund manger running Billions can do any better than an index. If you want big funds like that I would stick with Vanguard

Hi VF,
I feel, you are a pretty skilled investor to present such a question to the board. My comments are not ment to be investment advice ... etc.
I have owned American Funds for many years, since the late 50's early 60's; and, I currently own three of the funds you have listed (but A share class). I feel they are a fine large cap fund shop. In doing an Instant Xray on your subject hypothetical portfolio consisting of each fund you list in the amount $250.00 each I am seeing a good bit of duplication. With this, and if it were for my own portfolio, I'd add the Small Cap World Fund and drop the Global Balanced Fund to gain some exposure in the small/mid cap space.
I have linked the data entry page for Morning's Stars Instant Xray analysis. This might be something you'd benefit by spending a little time with. In addition, I'd do a risk tolerance and need analysis on yourself to see if what you have assembled fits with your investor profile determined by the analysis.
Old_Skeet

I've held various equity AF's for years in a taxable account (some you mention), my 403(b) is entirely in their cheapest WaMu fund class, and I have been quite pleased thus far with them all. I appreciate AF's investment style, philosophy, and approach -- and their ERs are quite reasonable for (now) no-load funds.
I don't own any of their balanced funds, so can't comment there, sorry.

Welcome to the club. My PayPal account got hacked by somebody in Russia about 5 years ago. They were "selling" products in my name and pocketing the $$ without shipping anything. Nice huh? We took appropriate measures once we learned about it.
Sorry to hear this David - And at a bad time with Chip temporarily down.

Thanks @Ted,
A good etf indeed. However, since I already owned FDSAX which incorporates the Dogs of the Dow into its holdings so I passed on this etf a few years back. SDOG is indeed a good strategy fund.
I have linked the Morningstar report on the fund that I do own that gives me some exposure to the Dogs of the Dow strategy.
http://www.morningstar.com/funds/xnas/fdsax/quote.html
Take care and it is nice to see you posting again as I missed all the good reading links you have provided for us through the years.
Skeet

@JoJo26, I am sorry but when some manager comes out of nowhere and wants to manage my money, he better be prepared to lose his shirt like me. It's one thing blindly investing into GP funds knowing well before that they had a stellar record of managing and stewardship at Wasatch.
I will never invest in a funds without manager ownership. When I made a mistake I have sold. When others have pointed out no manager investment I have sold. And I don't even ask any questions later. It's not a matter of returns, it is a matter of principle. It is irrelevant to me what research says about manager fund ownership. If research showed companies like Wells Fargo who screw customers become the best of companies in the aftermath, does not mean I'm going to open an account with them or even consider doing so. They are dead to me until they are the last bank on earth (since I'm not a hypocrite, but they freakin' better be the last bank on earth). There is a clear choice between who you chose to invest and do business with, and when you have that choice I think we take it. THAT is the only control we have.
And ownership debate has to be relative. It is one thing staying invested in FAIRX when manager has no investment and another when you know he has $46 MM + (last time I checked fews years back). It does make a difference. One reason I never invested with Bill Miller who said he had $1MM investment and was buying a $70MM yacht.
It would be good to know a manager who has $500K invested in his fund, what his net liquid worth is. If is net liquid worth is less than $2MM (say) and he has $500K (for instance) invested that's commendable. We don't know. If I see GP managers start buying yachts for $70 MM I will sell.

@hank - I like Barber and Odean (the authors of the summary you cited), but as something directed toward nonacademics, the summary glosses over too much for my liking. Here's a copy of the underlying paper: Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors.
For example, they present the odds of picking a big eight winner as 4.1% and the odds of holding only losers as 9.6%. What they don't tell you is how much you would win or lose in each case. If I were to tell you that those were the odds, but in the first case you'd win $1000 and in the second case you'd lose $20, I think you'd be happy to play that game. It's expectation values that matter, not raw odds. By citing the latter, they are appealing to incorrect intuitions.
That's why it's important to go to the paper, which I've only briefly skimmed. You'll find their definition of monthly turnover on p. 779 (pdf p. 7). It's similar but not identical to the way funds (or at least M*) define fund portfolio turnover. Doesn't matter too much - your intuition is likely pretty close here. Yes, Dick Strong certainly set a high bar - 700%+.
From my limited exposure to Taiwan investing (talking with people when I visit), it does feel like there's more trading going on there. Sort of like Silicon Valley, where people in startups keep tabs on their options and company price.
@MJG - Zero entry cost (no load) mutual funds have been around since 1928. On p. 22 of Kiplinger's Changing Times, June 1960, you'll find a list of eight large no load funds along with an offer to get a list of a dozen smaller no loads if you'll send a dime to them. The page does note that "the only way to find a no-load fund like this is to dig into the records yourself." Entry costs were never obnoxious in your lifetime, if one knew where to look. My father owned one of the funds on the Kiplinger page which he gifted to me (UGMA) many years later.
Dalbar keeps talking about the average investor when what it is actually talking about is the average investment dollar. Sharpe doesn't make this error when writing about how the average dollar will underperform the market by the overhead of investing, no more, no less. Which is why it isn't index vs. active that matters, but the cost of ownership. A cheap, actively managed Vanguard fund will do just fine.

Assuming we are in a period of rising interest rates, I would urge caution on any aggressive, long-duration, HY investment. Most investors are not seeking long-term volatility, and that is exactly what they will likely get. Search for non-index funds with exceptional managers who have a long track record who manage the fund cautiously and who hate to lose money. There are a handful out there, but those who look for good RELATIVE returns could have disastrous years.

Possibly not. HYBs act more like stocks then bonds.
https://www.invesco.com/pdf/HYBRR-FLY-1.pdf
http://news.morningstar.com/classroom2/course.asp?docId=5401&page=4
http://blogs.barrons.com/incomeinvesting/2016/04/12/surprising-strategy-for-high-yield-go-down-in-quality-if-rates-rise/

Hi Guys,
Jack Bogle is a great man. He changed the investment business forever and in so doing he significantly reduced investment costs for all investors. I remember when the entry costs for buying a mutual fund were obnoxious. Yes, for the last 40 or so years, Bogle has sung the same song. But it is a song that has revolutionalized an industry to its very core and deserves repititions.
Index investing now owns roughly 30% of the mutual fund industry market share and is gaining every day. Even a giant agency like the state of California is firing some of their active investment management and replacing them with Index advocates. Returns are likely to improve with that decision as costs are reduced and bad decisions are eliminated.
Index investing will never totally replace active investing management. We need active investors for price discovery purposes. I have seen TV shows that estimated we only need about a 20% to 30% active market players to satisfy that purpose. Indexing still has a long growth potential.
There is reliable data on the average fund holding period for the individual investor. It's about 3 years. Equity fund investors hold their funds for a little over 3 years while bond fund holders are slightly less patient at just under a 3-year average period.
That trading frequency generates sad outcomes for the average fund holder since his return is only about 1/2 of what the fund he invests in earns. Women do better with their investment decisions than their male counterparts.
Here is a Link to the DALBAR site that has a ton of investor data:
https://www.qaib.com/public/qaibquarterly
I suspect most MFOers do not subscribe to the DALBAR service for access. So here is a Link to a brief summary of the DALBAR data designed to encourage a sale of their service:
http://www.dalbar.com/Portals/dalbar/cache/News/PressReleases/DALBAR Pinpoints Investor Pain 2015.pdf
This DALBAR summary tells the sad tale without comment. Here is another Link that interprets these same investor data sets:
https://blog.folioinvesting.com/2012/05/11/the-most-common-mistake-investors-make/
Enjoy. I hope many MFOers are among the more patient investors. Trading frequently is indeed hazardous to our wealth.
Best Wishes.
Additional Input: I referenced the DALBAR research without providing an accessible Link. I just discovered a Link that does yield an example of the DALBAR work. Here is that Link:
https://www.bellmontsecurities.com.au/wp-content/uploads/2015/04/2015-DALBAR-QAIB-study.pdf
I have not read their report in detail, but it appears to support the observation that individual investors suck on average. Of course, no MFOers are average!

Assuming we are in a period of rising interest rates, I would urge caution on any aggressive, long-duration, HY investment. Most investors are not seeking long-term volatility, and that is exactly what they will likely get. Search for non-index funds with exceptional managers who have a long track record who manage the fund cautiously and who hate to lose money. There are a handful out there, but those who look for good RELATIVE returns could have disastrous years.