Hi @johnN,
I enjoy reading Dr. Madell's monthly newsletter and this month was no exception.
This month I averaged all the model portfolio's recommened asset allocations for cash, bonds and stocks. With this, for his three models, stocks averaged 45%, bonds 40% and cash 15%. Not sure if this has any great meaning but it is something I have been doing for the past couple of years in an attempt to follow the true shift in his asset weightings between stocks, bonds and cash.
When I detect a shift in his averages I then check my allocation to see where I stand in relation to his averages. Currently, we are the same for stocks at 45%, he is heavier in bonds at 40% and I am at 25%; and, I am also heavier in cash than he is. But wait, his model allocations are for the buy and hold investor and my weighting allows for some near term movement by using an adpative allocation model and strategy. In general, when stocks are expensive I hold less of them and when they are cheap I hold more of them thus rebalancing my equity allocation downward as stocks, in general, become more and more expensive.
My allocation model and investment sleeve system also allows for a seasonal strategy and its positioning along with taking advantage of market pullbacks and the associated swing. However, since bonds are not currently providing much yield and might soon face a rising interest rate environment I have chossen to carry a heavier cash allocation than normal this year thus foregoing my usual shift into bond funds from equity funds throuh nav exchanges. Since, I parked the cash proceeds from the sale of equity funds in the respective fund family's money market fund I can buy their funds again at nav without paying another commission or transaction fee. In addition, I pay no wrap fee on my accounts. With this, what some state and consider to be a high cost due to the frontend sales load, on the first purchase, actually turns out to be a low cost way to invest for an active investor, like myself, that likes to reconfigure their portfolio from time-to-time due to market movement and seasonal trends.
And, so it goes.

I have used this strategy for a good number of years with good success and it is a strategy I learned from my late father many years ago. I guess all strategies have their critics by those that fail to scout the route and fully understand them. For me, I reduce my equity allocation during the summer months (usually around May) and then increase it come fall (usually during late October early November) and sometimes during the summer should there be a good pullback.
In fact, I have found, the summer months are a good time to put new portfolio money to work in bond funds for those investors like myself that have, at times, paid a commission on their purchases because fixed income funds can usually be purchased at a lesser commission rate than their equity counter part and they also usually have the better returns during the summer months over stock funds. Come fall, when stocks usually begin to rally, one can then do a net asset value exchange from the bond fund into an equity fund within the same fund family usually with no commission or fee associated with the exchange. In addition, I pay no wrap fee on these accounts.
I guess we now know why the writer of this article fell into the grease continers after climbing the fence in taking his short cut route to McDonalds. He simply failed to scout know and heed to the perils that were associated with his short cut route.

A Little History
...a moment in time at the end of the summer of 2011 during which the investor class had temporarily lost its collective mind.
Investors, you see, had pushed the assets under management in State Street’s GLD Etf to a higher level than the assets held in its S&P 500 Etf (SPY). In other words – investors had decided, in the aggregate, that securitized rocks were worth more than the entirety of American capitalism and free enterprise.
The combined productive fruits of American business and labor were, for a moment, worth less to investors than a paper precious metal proxy.
August 22nd 2011

http://thereformedbroker.com/2014/09/18/that-time-three-years-ago-when-investors-temporarily-lost-their-minds/
Today

SPY
As of 06/16/2016
Price $208.38
Shares Outstanding 876.68 M
Total Net Assets $182,685.64 M
GLD Last Sale
US $123.97
Gold spot price
Bid
US $1,298.45
Ask
US $1,298.85
Total gold in trust
Tonnes
907.88
Ounces
29,189,217.78
Value US$
37,667,845,243.64
I recently trimmed my precious metal holdings @ a ( long waited ) profit. Now < 5% of investable assets, mostly TGLDX and PSAU

FYI: (Click On Article Title At Top Of Google Search)
Investors poured money into unconstrained bond funds a few years ago in a move to hedge against rising interest rates. But that early affection has faded as investors are still awaiting a sustained climb in U.S. yields.
Regards,
Ted
https://www.google.com/#q=Go-Anywhere+Bond+Funds+Struggle+to+Attract+Investors+WSJ
M* Nontrational Bond Fund Returns:
http://news.morningstar.com/fund-category-returns/nontraditional-bond/$FOCA$NT.aspx

FYI:
Regards,
Ted
June 16, 2016
Dear WEALTHTRACK Subscriber,
This week’s guest is telling clients to forget everything they’ve learned about investing, that the old rules are about to fail them and that we are in a new era.
Interested? I am! So I invited Francois Trahan to join us for an exclusive WEALTHTRACK interview.
Financial Thought leader Trahan is Co-Founder and Head of the Investment Strategy team at Cornerstone Macro, an independent macro research and strategy firm he and his partners launched in 2013. Trahan was ranked the #1 Portfolio Strategist by Institutional Investor magazine in 2015 for the fourth year in a row, as he has been for nine out of the last twelve years. As one institutional investor, who voted for Trahan told the magazine: “Francois is not afraid to make a bold call or to change his position when the data indicate that it is right to do so”.
Among his recent bold calls was turning bullish on the stock market late last year, predicting a “global recovery, weaker dollar and higher oil prices” would drive stock markets higher when the exact opposite was happening. Needless to say he turned out to be right as the S&P 500 hit new highs last week.
By far his boldest thesis is a macro one, which he characterizes as the most important in his career. According to Cornerstone Macro’s research, the economy has moved from the era known as the Great Moderation, also known as the “Goldilocks” period during the 1980s, 1990s and until the financial crisis, when inflation was tamed, interest rates declined and household debt increased, to the current era marked by deflation concerns, still declining interest rates and falling household debt.
The Great Moderation also resulted in declining crisis risk - by one measure to the lowest level in 100 years - which totally reversed during the financial crisis, to the current era of elevated crisis risk.
I asked Trahan what these changes mean for the markets and why they require a new investment approach.
In my EXTRA interview with Trahan, available exclusively on our website, he will explain why he is watching for signs of inflation when everyone else is focusing on the risk of deflation. If you’d like to watch the show before the weekend it’s available to our PREMIUM viewers right now. You can also find the One Investment picks of our guests and my Action Points there.
Thank you so much for watching. Have a happy Father’s Day this weekend! Make the week ahead a profitable and a productive one.
Best Regards,
Consuelo

USAA paid well also from January 26, 2016 article:
http://www.mysanantonio.com/business/article/San-Antonio-based-USAA-announces-annual-6785116.php
Excerpt:
"...Workers will receive a bonus equal to 17 percent of their annual base pay for 2015, snapping a string of six straight years that the award has been 18.4 percent or higher. The bonus was 18.7 percent in 2014."
Must be all of those commercials during televised sporting events.

This has largely already been explicated going back two years, by DS and others, if not going back to Weitz, IIRC.

Not really - ex-SEALS somehow do the conference keynote thing despite having zero background in the conference theme. I was shocked that a SEAL was invited to keynote a major computer security conference I was involved with a few years ago ... he had no computer security background or relevance, and his talk was all about leadership, initiative, and other management-centric motivating type of things. But he was a SEAL, and that was prominently hyped in the event marketing. *facepalm*
It's well known that several ex-SEALs (and some current ones) love the media and public spotlight that "being a SEAL" brings to them, much to the chagrin of their teammates and the rest of the special ops community who are generally considered the quiet professionals.

While LEXCX is a very good fund, and it shows that excellent investing can be done with low expenses and very low turnover with plenty of patience, I think the picture is not quite as rosy as the blurb above hints at. While it has beaten its benchmark (which is more than most active fund managers can say) over the last 15 years, it has not done it every year. It slightly underperformed in 2012, 2013, 2014, and significantly underperformed in 2009 and 2015. The period can be summarized as "mostly outperform". But the 12 years prior (as far back as my data goes) is a "mostly underperform" period. LEXCX is better than most funds I track.

There have been "questionable" periods for equities over the markets' histories. Yet, over a long sample, the use of a bi annual switching strategy involving investing in: 1) a blend of Emerging small cap and U.S. Small cap value from Nov 1 to May 1 and 2) the utilities sector / cash * from May 1 to Nov 1, has produced a risk adjusted 380bp CAGR return premium vs. buy & hold Emerging small cap / small cap value blend. The addition of U.S, Large Cap to the blend has also produced returns premium.
CAGRs
1954 - 2016
Blend / Utilities, cash = 20.9% vs. Buy & hold 17.1%
1954 - 1983
18.7% vs. 17.9%
1984 - 2016
22.3% vs. 15.6%
2000 - 2016
17.8% vs. 11.6%
% of 5 year rolling CAGR periods > 100% ( 1954 - 2016 ) = 79%
% of 5 year rolling CAGR periods 50% - 100% = 14%
no losing 5 year rolling CAGR periods
* Application of a "Risk profile" variable determining forward year's equity market "risk". High Risk profile year = allocate to cash May 1 - Nov 1
High risk years falling in sample: 1956, 1962, 1969, 1974, 1978, 1981, 1982, 1990, 2001, 2002, 2008, 2015, 2016

FYI: If you want to convince your clients that doing nothing is sometimes the best thing to do, point them to Voya Corporate Leaders Trust (LEXCX).
Now in its 81st year, the fund has beaten the Standard and Poor's 500 stock index the past 15 years, according to Morningstar, the Chicago investment analyst. Voya Corporate Leaders is up an average 7.75% a year, vs. 5.58% for the S&P 500 index. Voya proudly proclaims on its website that the fund has beaten the S&P 500 and the Dow Jones Industrial Average "for over 40 years."
Regards,
Ted
http://www.investmentnews.com/article/20160610/FREE/160619995?template=printart
M* Snapshot LEXCX:
http://www.morningstar.com/funds/XNAS/LEXCX/quote.html
Lippper Snapshot LEXCX:
http://www.marketwatch.com/investing/Fund/LEXCX
LEXCX Is Ranked #60 In The (LCV) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/large-value/voya-corporate-leaders-trust-fund/lexcx
Oldest Mutual Funds:
http://www.investopedia.com/ask/answers/08/oldestmutualfunds.asp
A Brief History Of The Mutual Fund:
http://www.investopedia.com/articles/mutualfund/05/mfhistory.asp

Bought this in early Dec.Reinvesting monthly divs.Cut div by 5% in Feb.No history of Roc distributions.Watch for weakness if oil prices drop.Non marginable @Schwab
Babson Capital Global Short Duration High Yield Fund
(Ticker:BGH)
Strategy
Fund will invest at least 80 percent of its managed assets in corporate bonds, loans and other income-producing instruments that are rated below investment grade
Fund may invest up to 50 percent of its managed assets in bonds and loans issued by foreign companies
Seek to maintain a weighted average portfolio duration of three years or less
Weighted Averages
Market Price ($) $88.57
Duration (Yrs) 2.33 yrs
Leverage 23.60%
Global
36.57% non-US
Number of Holdings
130 issuers
as of 4/30/2016
Industry % of Assets
Oil And Gas 14.09%
Chemicals, Plastics And Rubber 9.32%
Healthcare, Education And Childcare 8.16%
Automobile 6.74%
Finance 6.56%
Cargo Transport 4.85%
Containers, Packaging And Glass 4.67%
Electronics 4.27%
Telecommunications 4.26%
Leisure, Amusement, Entertainment 4.23%
http://www.babsoncapital.com/assets/user/media/Babson_Capital_Global_Short_Duration_High_Yield_Fund_Factsheet.pdf
http://www.cefconnect.com/fund/BGH

One who is smarter than me years ago, here at MFO, alerted me that the SEC number is the more reliable and accurate. So I have trusted that. Even though my government and its agencies have been lying to me for my whole life. I've come to expect it. ;)

re. JPM Core Bond and @Ace concern:

Swanson’s announcement in September that he was taking a leave was the first public sign of tension in the Columbus operations. It followed the departure of three members of his team for outside opportunities or other areas within the bank. [...] Then, two months ago, senior money managers, Henry Song and Mark Jackson, quit. Chris Nauseda, who was part of the Core Bond fund and was with the firm for 35 years, plans to retire by July 1

http://www.bloomberg.com/news/articles/2016-06-03/jpmorgan-exits-mount-from-a-star-bond-team-said-to-feel-slighted
@BobC With due respect to our newest BD member, can you really say what you have with WOBDX/PGBOX anymore? Frankly, if Doug Swanson and top team managers were to walk on me, my money would leave the fund on the following day. I certainly wouldn't be putting money into it. Just as if Dan Fuss announced his retirement (effective immediately), and Elaine Stokes went on leave the month following ("to spend more time with her family"), and Matt Egan resigned (for a professional opportunity at another firm), leaving money in LSBDX would seem to be uninformed by history.

@ron: I recently added GIBIX (GIBLX is the retail version) as 1/2 of my muni bonds got called and wanted to find a suitable fund with similar income stream. I also like MWTRX, it is generally all higher quality, and I found GIBIX a bit more diversified as 60% are BBB and above, and there are some high yielders. I did also add a bit of DBLTX, but its almost all mortgage bonds, so I put more into the Guggenheim fund for diversity sake. I still have 2 muni bonds that will mature in 4 and 8 years, glad they did not get called, they yield 4% + since they were issued in mid 2000s :)

Comparing TGBAX to Barclays Agg makes no sense to me. We use the Citi World Govt Bond Index as a benchmark, and it stacks up well. Under-performs for 1 and 3 year (mostly because of last 12 months), beats 5 years and wallops 10 years.

Yup, that's the benchmark used by the fund in the prospectus.
The current (Jan 1, 2016) prospectus shows the benchmark comparisons through the end of 2014 (not 2015), confirming that all of the underperformance came since then:
(as of 12/31/2014) 1 year/5 year/10 year annualized:
TGBAX: 1.84% / 6.01% / 7.64%
Index: -0.48% / 1.67% / 3.08%

BobC, slight hijack -- any more thoughts on OSTFX? Seems to have struggled of late as well. Function of John's changing role, or holding cash and being out of sync with markets for a couple of years? Most of the Osterweis funds seem to have lagged of late, which one might expect happens from time-time with a true active manager.

I agree the Barclays Agg makes no sense as a 'benchmark.'
I've held TGBAX for ... something like 8, 9 years. Love the insanely-tiny duration of its holdings.
TGBAX has gone nowhere for 1 and 3 years, and 5 years returned 1.57% according to M*. It's 10-15 year returns are nice, but am *very* close to culling it down to a foothold in my portfolio based on that performance, its recent 30%-ish distribution cut, my expectations on its future performance, and because it's still sitting on nearly 50% cash ... which is nice for when opportunity arises, but still. (I think MH and SD are okay managers though.)
As someone said on the M* article, at times TGBAX looks more like a currency hedge fund than a global bond fund.

Not mentioned is Korea. Having heard for years that the only thing keeping it from being moved to "developed" from "emerging" is its border with North Korea, it will be interesting to see how it fares going forward. Think there is no politics in MSCI's decision making? Think again. Imagine the pressure they have been getting from different sides, and imagine the potential fallout should they move Korea to the EAFE index. Rickety countries remain in EAFE while several strong economies are kept in EM. Not a fall-off-the-log decision.

Comparing TGBAX to Barclays Agg makes no sense to me. We use the Citi World Govt Bond Index as a benchmark, and it stacks up well. Under-performs for 1 and 3 year (mostly because of last 12 months), beats 5 years and wallops 10 years. We have captured gains that have accumulated for the last 10 years in client accounts, but continue to hold the fund. We are not blind to its very recent stumbles, however, and are watching and staying in touch with our Templeton connection. Honestly we like smaller funds better, and there was a tone of hot money that came in since 2010. Some of that has left (moving on to the now-hot sector), which is fine by us.