That's a neat back door to an advanced M* screener.
https://awrd.morningstar.com/SB/USAASB/USAAScreener.asp
There are actually 27,375 share classes. The 15,616 that you started with are the result of the default settings on the screener restricting results to funds that are both open and available via USAA. (Note also that many funds are counted multiple times, since they have multiple share classes.)
Curiously, M*'s premium screener has only 26425 share classes in all. I was trying to figure out how the screener defines "high" for Sharpe ratio and alpha. I'm still not sure.
A few suggestions on your screen:
- Try setting ER limit differently for different classes of funds. IMHO an ER of 0.9% is respectable for a broad domestic equity fund, a bit tight on foreign funds, and ridiculously high for a bond fund.
- brokers often have different mins than the "official" min, so often I don't screen on mins, and then check around if I find a fund of interest. The USAA-customized screener might already adjust for funds through USAA, I haven't checked.
I'm willing to let more pass through a screener and then do some legwork than be too aggressive in screening out potential candidates.
Given that the past five years the market has only gone up, screening for low beta and top quartile performance may be too aggressive. Almost by definition in a market going straight up, the best performers will be the ones with higher beta (since they'll tend to do x times as well as the market, where x is the beta).
In this kind of market, lots of good funds will be eliminated because they're not both consistent top performers and low beta. More than likely the funds that pass these two screens will have a moderately low R^2, meaning that the beta is relatively useless.
NASDAQ funds have high betas, so I'm not sure how you coaxed them through the screener. USNQX has a beta of 1.19 (vs. S&P 500), and NASDX has a beta of 1.18.

For my eyes/thoughts..........the most vital statement in the article:
"Internationally, Vail suggests avoiding G-10 foreign sovereign debt. Why? "Mainly because they're still firmly in easing mode, but yet rates are not going down," she said. "Combine that with dollar strength, which will probably chew at the domestic U.S. investor and eclipse any potential price return you're going to get from the easing policy at the ECB and the BOJ in those countries" (Europe and Japan.)"
>>>Japan's central more or less placed its QE program with the U.S.; after the 2008 market melt, and kept it in place longer. The European central bank played austerity for about 2 years after the market melt and continues today with purchases of some private bond issues for more support. Japan, within the past year intervened directed into their own equity markets for support of those markets. China? Your guess is better than mine. Higher interest rates here will indeed likely continue to maintain a stronger dollar (higher commodity pricing for other countries having to purchase a more costly dollar). And if there is another "twitch" in global equity markets, interest rates will come down here again as protection money will move to U.S. Treasury issues for safety.
One big, funny money circle, eh?
Just a IMHO 2 cents worth.
Catch

$67,928 if you were earning 5% risk-free.
I used the calculator bee points us add and had it calculate $100 initial, $300/year addition (i.e., $25/month), compounded monthly for 50 years. The "compounded monthly" part just means we assume that your April portfolio would have undergone some modest appreciation so your May portfolio will be more than just April + $25.
It's a very imprecise calculation since it does assume all of the additions occur once a year through capital growth occurs, uninterrupted, monthly. The better answer would come from a Monte Carlo simulation. If you're familiar with Excel (Chip and Charles will happily testify to the fact that I am not), one of the faculty at Wabash College has posted a free Monte Carlo add-on for it. The technique also underlies the retirement calculators at T. Rowe Price and Vanguard.
Thanks, by the way, for helping your granddaughter. I've had this same conversation with one of my brothers about why (17 years ago) he should really be putting away $25 or $50 a month for his son's education. I even set up the account and put in some hundreds of dollars to start it. Mostly I got uncertain nods and a long-unfunded account in return. There's some research that suggests we need to visualize our future selves (in some cases researchers use "aging" software to accomplish the task) in order to make this work. Something like, "let's say you've worked like a dog for 40 years and now you find yourself living alone in a house that's too big with a quarter-century of 'vacation' in front of you. What do you imagine you'd want to be able to do or feel?"
For what that's worth,
David

Of all the variables you listed the most powerful is the compounding of interest (5%) over time (50 years). This teenager should try to save as much as possible early in life and then let time and compounded interest work their magic.
Q's to pose to this teenager:
Could your teenager scrape together $100/month or $1200/year?
Could this be saved in a Roth IRA (teenager must have earned income)?
If a 16 year old could save $1200/yr for 16 years (until age 32) and then stop contributing, but remain "invested" at an average of 5% a year; at age 64 he/she would have a nice little nest egg for retirement, about $150K.
At an average of 6.5% it would be twice that amount or about $300K.
At 10% average return it would over $1M.
Not bad for a $19,200 investment (16 yr saving $1200/year).
This calculator seem to meet your input criteria:
moneychimp.com/calculator/compound_interest_calculator.htm

"... [and] paying more attention to the performance of said funds, their index construction, and—not the least of it—the tax consequences of selling one fund to buy a cheaper one."
There are differences between indexes. Some are better designed than others (e.g. in terms of buffer zones) to facilitate running index funds, but at the possible cost of slightly higher tracking error (vs. the part of the market the index is "measuring").
Many indexes are constructed mechanically, while some (notably S&P) are comprised of hand-selected securities. Some are constructed with transparent rules, others are built with proprietary, secret models. Whatever rules are used may vary from index to index (e.g. S&P indexes usually require companies to be profitable).
http://openmarkets.cmegroup.com/8808/inside-the-sp-500-an-active-committee
Some (notably R2K) are more subject to front running than other larger cap and/or less widely followed indexes.
http://www.morningstar.com/advisor/t/102491623/the-russell-2000-index-s-achilles-heel.htm
[Ted linked that article two years ago]
http://www.mutualfundobserver.com/discuss/discussion/19286/the-russell-2000-index-s-achilles-heel
Index funds likewise have their own characteristics. They have different policies on lending securities (and how much of the revenue from those loans is plowed back into the fund). They have different policies on how quickly they must alter their portfolios in response to index changes (DFA in particular tries to trade tactically). Funds that track via sampling may take different approaches (e.g. how far down the cap scale they go in sampling securities from smaller companies in their index). This is especially significant in bond funds, where bonds come and go (they mature), and funds take different approaches in matching maturities, quality, convexity, etc. of their portfolio to their index.
While the differences between index funds may not be as wide as the differences between actively managed funds, selecting an index fund is not a matter of throwing a dart or picking the lowest cost one.

Unfortunately I have forgotten the formula for determining the future value of an invest from my intermediate accounting classes. I would like to provide some incentive for my grand daughter by showing her what a $100.00 initial investment with $25.00 monthly additions would be worth in 50 years earning 5% per year. Anyone familiar with the formula for making this calculation and if so, could you please provide me the results? Thank you to all for your suggestions on reading material.

FYI: Riding just one growth stock to big gains is always a challenge. But Will Danoff does it so often that Fidelity Contrafund has become a $107 billion behemoth that's returned an average annual 12.94% during his more than 27 years at the helm.
Regards,
Ted
http://www.investors.com/etfs-and-funds/mutual-funds/fidelitys-will-danoff-talks-about-the-super-bowl-and-super-stocks/

Hi Catch22,
Extrapolating short term market data for a much longer timeframe is dangerously serious business. It can certainly promote an unrealistic outlook and a deeply flawed projection.
I know you were kidding in your post, but it did surface an interesting question. If equities deliver positive returns in both January and February, what are the likely odds and returns for the entire year?
I sure don't have an answer, but Sam Stovall has appently addressed this same question. I don't have a primary source reference, but here is what a secondary source reported:
"(The) S&P jumped 3.7 percent in February after rising 1.8 percent in January. In the 27 years since 1945 that the S&P rose in both January and February, the S&P recorded a positive full year return 27 out of 27 times, averaging a total return of 24 percent,"
I lifted this summary paragraph from the following article:
http://www.cnbc.com/2017/03/01/wall-streets-super-charged-bull-faces-its-own-march-madness.html
I haven't checked its accuracy. Apparently, so said Stovall. I was greatly surprised. So your fun projection might just be slightly overly optimistic.
I was also surprised that the S&P 500 generated positive January and February outcomes 27 times since 1945. Wow! That's 38 % of the time.
History is an important factor when making investment decisions. However, it is an imperfect measure; change happens. I know you recognize its shortcomings and are acting to protect your portfolio.
Best Wishes
EDIT: Here is a Limk to an article that presents the basic data in a chart format:
http://www.marketwatch.com/story/this-bullish-signal-has-never-been-wrong-and-its-about-to-flash-for-2017-2017-02-22
Sam Stovall does excellent historical market research. Enjoy and profit, but note that although all 27 years finished in positive territory, two of those years staggered at the end with only slightly positive outcomes.

Best: RPHYX/RPHIX - I annually funded it for 2 years worth of monthly withdrawals as our retirement 'paycheck'.
Mixed Bag: RSIVX/RSIIX - On the taxable side, I did a little tax loss harvesting and then reinvested once Mr Sherman got the train back on the track. On the IRA side, it's been an interesting ride, but in the long run, it has been an overall gainer. ( I tend to be a buy & hold traditionalist )
Worst: The RiverPark Focused Value Fund RFVIX/RFVFX
Speaking of which: Whatever happened to the occasional Conference Call invitations? I haven't seen any for awhile...

https://www.yardeni.com/Pub/peacockfeval.pdf
There is a lot there. If you can make anything of it.

Schiller's P/E is adjusted. Still interesting.

From the original post's link. Even based on the more common price-earnings ratio, the market looks rich. The S&P 500's P/E based on earnings of the last 12 months is 18.9, the highest in more than 12 years, according to FactSet.

Keep in mind that inflation is still very low, and that can support a higher P/E ratio. Just because equity markets are hitting a new high, doesn't mean that we are due for a crash. I'm not terribly concerned about a correction, which I would view as a buying opportunity.
Anyone have a link to projected earnings? That is part of the equation. I'd like to take a look. But those projections have to be tempered by the fact that they are typically short term, and analysts have a ton of conflicts of interest. Not to mention that they are highly overpaid and terribly underskilled.

For what interest it holds, the manager - who came onboard in 2005 - seems entirely sympathetic to your complaints about the funds though, given that his dad founded the firm he needs to be a bit circumspect.
His argument, I think, is that the funds were once 100% pedal to the metal: buy great, growing companies and hold them, volatility be damned. The results were great, until they weren't.
His addition to the discipline seems to be the macro overlay: start with the question of whether you should be seeking to embrace or withdraw from risk first, then look at the best options within that strategic vision.
If you look at 2000-02, before his time, the fund lost 88% - 5000 basis points more than its peers and took 14 years to record.
Compared that to 2007-09, when he was in charge. The fund lost 54%, 400 basis points more than its peers but had fully recovered by April 2010.
During the current upcycle, it's maximum drawdown was 20.8%, 100 basis points more than its peers and it bounced back far more quickly than they did.
To be clear: the fund is more aggressive than I am, so I'm not ever likely to add it to my personal holdings. That having been said, (1) it's not his father's Pin Oak and (2) it's an interesting answer to the "where can I get market-beating returns?" question. It feels like investors put managers in an incredible bind: they flee from active funds because they don't beat the ETFs and flee from active funds because they do, apparently in the belief that ETFs offer ...
Hmmmm.
In any case, I did approach Pin Oak with consider caution and skepticism. The combination of the numbers and the story convinced me that folks who dislike my normal conservatism (Intrepid Endurance at 70% cash, RiverPark Short-Term at 3% and FPA Crescent at 45% bonds and cash) would like the opportunity to consider the alternative.
As ever,
David

I don't have the wiz-bang sure-fire indicators you all have, but I read occassionally, and have come around near to where OJ sits in my market view. Just another in a long string of indicators ... But when the folks at TRP start throwing around terms like "pre-1929" (valuations ) I take note. Caveat: Even very good indicators can be years ahead (early), so smart people often end up looking foolish.

Hi @Old_Joe and others,
I am seeing an unprecedented low reading on my market barometer if I remove the floor on all the feeds with the exception being earnings. The earnings feed is keeping the barometer reading propped up. The barometer reading with the floors in place is 130 and when the floor is remove letting the readings float then the barometer reading drops to 112. This is the impact the improvement in reported year-over-year earnings and forward estimates are having on stock market prices. It seems investors are currently willing to pay dearly now for earnings thus extending the markets to richly priced levels by some metrics. In addition, the carry trade is drawing foreign money to the States plus perhaps some retail investors are now selling bonds and buying stocks.
Currently, I am overweight equities by 10% over what my market barometer and equity weighting matrix are calling for. In most past years I have trimmed based upon my matrix.
Is it time to cut and run? Perhaps. But, at this time, I going to stay with the trend until I see the money flow and the relative strength indicators, which make up my technical score feed, start to give way.
I wish all ... "Good Investing."

On three or four occasions over the past fifteen years or so I've posted a similar warning to all MFO readers. I keep track of all of our investments on a spreadsheet, and very infrequently it becomes necessary to adjust the range of some of the charts.
Increasing the range on the downside has never resulted in the market going up. However, increasing any of the parameters to the upside has always been followed shortly thereafter by a significant market "correction", sometimes referred to as a "crash".
Be advised that I have just made such an adjustment. GOOD LUCK TO ALL OF US!
Further note: The caps above were unintentional- the investment gods must have made me accidentally hit the "caps" key. Surely a sign from above!

The muslim funds of Amara have a good record so het. you nevr know

True dat - see AMAGX and AMANX. The Islamic principles that differentiate 'em for the most part are restrictions on lending/borrowing, high debt loads, speculation (as they define it, including lots of turnover), and alcohol/tobacco/pork.
The main practical effect of those is that they're (almost always? always?) weighted zero in financials and pretty skimpy or zero in other sectors/subsectors, and end up with pretty much a very low turnover "quality" portfolio invested in a limited number of sectors.
I owned AMAGX some years ago, and may at some point again; it's attractive beyond its religious "base."

@davidmoran: I'm giving you up for Lent !!!
Regards,
ted
@Ted- speaking of lent, when are you going to pay back the $100 that I lent you ten years ago? :)

Merriman is soon to release a "motif like" all in one fund to replicate his 13 small slice portfolio which allocates among all sectors stocks and bonds domestic and international. His work is based on DFA research. According to him, this portfolio outperformed S&P500 substantially over the last 45 years.
Vanguard's position (which I respect) on Int'l allocation as follows:
https://www.bogleheads.org/wiki/Vanguard_four_fund_portfolio

While I too would like to the the OEF TFs reduced, Fidelity already makes it possible to increase positions in TF funds for $5, and to sell positions at no cost.
That likely makes it the least expensive brokerage for OEF round trips. (I am disregarding WellsTrade here, as (a) it is Wells Fargo, and (b) its no fee schedule is not available for new accounts.)
In addition, Fidelity did lower its fee by 1/3 about four years ago, a price drop that Schwab declined to match.
http://www.mutualfundobserver.com/discuss/discussion/8170/fidelity-lowers-its-transaction-fee-for-tf-funds

Faber himself likes to say "at some point in their life everyone will be right". His time hasn't come yet, but it will.
And no, people will not remember all the years he was wrong.
FWIW, I always take 20% profit on 20% of my position every year and if the fund keeps going up, I keep doing it. Of course I pay attention to distributions and if forthcoming i don't do it since I don't reinvest distributions. This simple tactic has really helped me stay calm and focused. I have never and will never match the index returns, but I think that's a good thing when index goes down.

It's not just an effective strategy for managing volatility, it can significantly beat the market in cases of significant downturns, although it would tend to trail in cases where an investor gets whipsawed. From late 2000 until the beginning of 2013 the S&P went nowhere (excluding dividends, which isn't unimportant, but both the 10 month and 12 month moving average systems made enough gains that someone could get whipsawed a lot and still be ahead. The real question is whether you fear a big downturn or fear being whipsawed more in the future. Considering the volatility benefits it would seem like a decent chance of significantly improving risk adjusted returns and possibly absolute returns, although the internet bubble and the credit crisis were a big help in the last 15+ years.