Ha! Ha! I took some off the table Tuesday and Wednesday. Since I am apparently part of the herd we probably will regret it. Junk bonds are still hovering just a few percent off historical highs on a total return basis. It's the bank loans that baffle me. They seem immune to everything. My largest holding is EVFAX and like many there have had but two or so down days since February. And EABLX below has had zero down days since February. Talk about trend persistent! Just wonder when the inevitable pullback comes in that category if it will be short and sweet or drawn out.
http://stockcharts.com/h-sc/ui?s=eablx

I think perhaps you have some recency bias on bank loans. Down past two years, and the run up has been the past few months. Same with HY, timed a buy on HYB just right and seems like I did great, and I did, but way off it's 52 wk high and many are flat or even still down over the past year in that space. All depends on when you bought.

Thanks for the perspective TSP.
While there's no way (that I know of) to predict what any market will do in the next year or two, over the past decade or so most of those invested in equities should have made money. (John Hussman's an exception.) NASDAQ, of course, is still recovering from a huge bubble where it quadrupled from around 1,000 to 5,000 between '95 and 2000 when it burst. Those who bought the Kool-Aid late in the bubble probably deserved what they got. I don't think the DJI and S&P experienced anything near that kind of bubble. But, who knows? Anything could happen. That's why you get paid to take extra risk in the markets.
Quality of life? We take so much for granted. When I was a kid we had 3 black & white TV stations to choose from. We had to run over to the TV about every 10 minutes to adjust the vertical or horizontal hold so picture would stop rolling or blurring. Few cars had power brakes or power steering. Air bags were unheard of. Flat tires along the road were common. You'd better know how to use a car jack. So ... we have such a higher quality of life today. OK - I'm getting old. But, even over 10 years, the quality of life for most (not all) Americans has increased immensely.
The one painful issue is that we've experienced a market crash and strong deflationary undercurrents within the past decade. This has depressed some prices (like energy). But, perhaps more noticeably, it has led to wage stagnation in many sectors, so the average worker is suffering from stagnated income. Hopefully that will improve as the effects of the '08 crisis wane. FWIW

Same theme not quite the alarm .
Macro View
Complacency in Uncharted Waters The next challenge for central bankers is changing monetary policy when the economy has come to depend on it.
May 03, 2016 Global CIO Commentary by Scott Minerd
...Another market area that is clearly not behaving according to the central banks’ script is foreign exchange. Japan’s current laundry list of woes is topped by the strengthening yen, which is a major headwind for its moribund economy. The Bank of Japan is due to convene later this month, and may decide that the best course of action is to intervene directly to drive down the value of its currency. Such direct intervention basically will entail selling yen and buying U.S. dollars, and typically those dollars go to buy U.S. Treasurys. Europe is probably not far behind: It has tepid growth, a strengthening currency, and more potential downside to their policy rates. This means there is a high likelihood of a fairly good bid on Treasurys in the coming weeks that could be sufficient to push the 10-year U.S. Treasury note lower.
My message to central bankers is the following: Although the waters at the present time might seem calm, they are still uncharted and there are risks beneath the surface. QE and negative interest rates, once thought to be extraordinary measures, have become the new monetary policy orthodoxy in the largest developed economies. The data on the long-run effects are limited, but real-time experience with these policies offers a few lessons.
...we learned from Japan that ever larger doses of unconventional monetary policy may be required in the absence of growth-enhancing structural reforms. Moreover, it is incredibly difficult to reverse these policies from an economy that has come to depend on them. Second, in Europe we are learning that such policies offer limited benefits unless paired with a coordinated fiscal plan. Finally, we have learned here at home that trying to “normalize” policy, even in a gradual manner, can strain financial markets.
https://guggenheimpartners.com/perspectives/macroview/complacency-in-uncharted-waters
Also
Markets and life since 2006.
10 Stats About the Last 10 Years
May 02, 2016 By Nicholas Colas who is is Chief Market Strategist for Convergex.
Summary: The headline today that Goldman Sachs’ stock has gone nowhere for a decade got us thinking about general market performance over the last 10 years. The key contours are straightforward: subpar price returns (a 4.9% compounded annual growth rate for the S&P 500) with increased volatility (a VIX that is 25% more volatile than average). From there, things get funky.
Think back over the last 10 years - how different was your life in April 2006? While you may think your daily existence is largely the same (maybe the kids are older or you’re married now, but that about it…), consider what was actually different about your life in the spring of 2006:
No iPhone. Steve Jobs unveiled the first iPhone in January 2007, and it didn’t ship until June of that year.
No Facebook (unless you were in college at the time). Facebook only opened to the general population in September 2006.
No Twitter. The full version of the product launched in July 2006.
No Instagram. The picture sharing site only launched in 2010.
No Kim Kardashian. “Keeping up With The Kardashians” debuted in October 2007.
No Uber. The company received its seed funding in 2009.
No iPad. Apple started taking pre-orders on the first-gen product in March 2010.
It feels like April 2006 demarcates the last days of some Dark Age, or at least a simpler time without the manifold distractions of today. And while you might opt for a world without the Kardashians, imagine it without your smartphone, Facebook/social media, and an iPad to entertain the kids (or yourself). It’s ok – don’t panic. You have them now.
The journey from April 2006 to April 2016 in financial markets has, of course, been a wild ride. But just as it is hard to remember what daily life was like a decade ago, it is also easy to forget some of the important waypoints that capital markets took from there to here.
Here are 10 data points about the last 10 years we hope you will find useful:
http://www.convergex.com/the-share/10-stats-about-the-last-10-years

IWIRX is surely doing a lot better than its stablemates, particularly Alternative Energy, Global Energy, and Asia Focus. G-A made its mark with the China-Hong Kong fund several years ago, but that one has faded also. I'm surprised the firm is able to retain talent given its overall weakness.

https://finance.yahoo.com/news/stan-druckenmiller-the-bull-market-has-exhausted-itself-210803739.html
Legendary hedge fund manager Stanley Druckenmiller, who runs Duquesne Capital, says that “the bull market has exhausted itself” after eight years of a “radical monetary experiment.”com/news/stan-druckenmiller-the-bull-market-has-exhausted-itself-210803739.html
I'm selling my home and buying a RV to live in instead of buying gold.

Hi, Ben.
Not sure about the 2-3 year holding pattern thing. They crushed the competition 3 years ago and crushed them 2 years ago then trailed for the first 3 quarters of 2015 then outperformed in the 4th quarter. They're trailing this year. Over the whole period from Jan. 2015 to now, they trail their peers by 5% cumulative.
Innovators, to them, do stuff like high levels of employee training and product refinement (think of it as "continual internal upgrades"). But they also look for businesses that won't flame-out which means many quarters of cash-flow growth. Tesla, cool as they are, posted losses of $0.54 share with a share price of $225. They also lose $30,000 on every high-end car they sell. That's not a profile these guys would get within a mile of.
David

If we're including multi-billion funds, one I like is American Century Mid Cap Value, ACMVX. (Before anyone writes that this is closed, look again. It is only closed when purchasing through a third party, e.g. Schwab.)
I ran a search for small funds in the small cap value space, and ran across LSV Small Cap Value (LVAQX). In some senses, similar to TDVFX (tiny AUM, tiny cap). Not quite deep value though. Even lower turnover (15%). And fine performance so far (three years old - see original share class LSVQX).
This seems like a quant fund with training wheels. It keeps its sectors within 5% of its benchmark - I'm guessing that this could explain the low turnover, since quant funds are often whipsawed.

IWIRX does have a stellar record but seems to be just holding serve over the last 2 to 3 years. The managers' explanation of what "innovation" means to them is a head-scratcher for me. A look at fund holdings reveals a collection of mostly solid large cap tech US companies who certainly spend something on R&D, but not firms I think of as terribly innovative. I'd expect to see the likes of Tesla and something in health and medicine (although GILD is included). I do like the choice of Wisdom Tree as a holding. I've owned G-A funds in the past and I have reduced Matthews in favor of Seafarer and Grandeur Peak.

Thanks for the background. It explains why Putnam is giving up on Voyager.
Years ago, it used to be a well respected, well known fund. For part of the 90s, it was the largest holding in my 401k plan (until my company dumped Putnam for Merrill Lynch).
Looking over the management history, it seems that Marsh & McLennan (former owners of Putnam) made hash of the fund after that, with rapid management turnover and of course with the 2003 timing scandals. The longevity of the immediately preceding manger (2008-2016) might be explained by Putnam having been bought in 2007. Just a guess.
FWIW, Putnam VT Voyager (the VA clone of Voyager) is similarly being merged into Putnam VT Growth Opportunities.

from our May commentary on the merger, for what interest it holds:
Putnam Voyager Fund (PVOYX) is merging into Putnam Growth Opportunities (POGAX) on July 15, 2016. Voyager’s performance was rightly described as “dismal” by Morningstar. Voyager’s manager was replaced in February by Growth Opportunities', after a string of bad bets: in the past six years, he mixed one brilliant year with two dismal ones and three pretty bad ones. He was appointed in late 2008 just before the market blasted off, rewarding all things risky. As soon as that phase passed, Voyager sank in the mud. To their credit, Voyager’s investors stayed with the fund and assets, still north of $3 billion, have only recently begun to slip. The new combined fund’s manager is no Peter Lynch, but he’s earning his keep.
David

Many of the top small cap value funds are closed to new investors, and this is an ongoing good news/bad news. Nuveen FSCCX and Wisdom Tree DES are both open and have among the best 3 and 5-year records. Mid cap value is also pretty bare, but Wells Fargo SMCDX has a good track record. ETFs offer more options in PEY, DVY, DON, all of which have out-performed the S&P 400. But, as David says, it depends on what is important to you. Diamond Hill has a great small cap fund, but it is closed.
We use Vanguard Index VIMAX as a core hold, with UMBMX as a concentrated add-on. It has out-performed both midcap blend and value over the last 10 years, mostly it has less downside loss.
For small cap we use SWSSX or VTMSX as a core, with IYSIX in our more aggressive accounts.

"But has acted like a story stock"?
Uhhh ... top 3% of all global funds for the past three, five and ten years. It trailed its peers in 2015 by 1.3% and YTD by 3.5%. Their argument is that they favor firms that generate lots of free cash flow, which they take to be a sign of a sustainable business that can finance its own growth without recourse to borrowing. The market lately has emphatically favored "get big quick" story stocks. The four FANG stocks accounted for all of the S&P 500's gains last year but if you look at Netflix (the "N"), they're trading for $110/share and reporting $0.04 earnings/share. Facebook ("F") reported $0.18/share last year against a share price of $115. They do own Alphabet/Google but not Amazon.
So if "story stocks" are bad and they refuse to own the story stocks, despite their current price momentum, wouldn't that be a good thing?
Puzzled, as is so often the case,
David

Hi, ep1.
A lot depends on what you're looking for, beyond "small and midcap." Some folks like deep value, some seek low-vol, absolute value or concentrated portfolio. I ran a quick screen through MFO Premium for SC/MC value sorted by highest Sharpe ratio over the full market cycle. Here's the shortlist:
Intrepid Endurance (formerly Intrepid Small Cap, ICMAX) - absolute value which means huge cash holdings until compelling valuations appear. Up 4% YTD despite 67% cash which implies that equity portion was up 12%. Lost 18% in the 2007-09 crash. In a similar vein but without full-cycle performance is Aston/River Road Independent Value (ARIVX) - the former manager of ICMAX is at 85% cash and has still gained 8.5% YTD which implies about a 60% gain in the equity portfolio. Most folks have been pretty caustic about the funds because the managers have been steadily harvesting gains and building cash since about 2011 which means they've missed the current party.
Victory Sycamore Established Value (VETAX) - $4 billion mid-cap fund with a value bias. Nominally has a load though those are often avoidable. Fully invested, consistently top decile performer. Lost 43% in the market crash, substantially less than the index.
Wells Fargo Special Mid Cap Value (WFPAX) - $3.5 billion mid-cap fund with a value bias, same story on the load. Launched in 1998 but the current team has been onboard about seven years, top 5% performer. Down 44% in the crash.
Hennessy Cornerstone Mid Cap 30 (HFMDX) - no-load with about a billion. Substantially more volatile than the two funds above, somewhat higher returns, very low turnover.
Queens Road SCV (QRSVX) - about $135 million, lots of insider ownership, tends toward small blend, top 20% over time. About 20% cash at the moment and up about 5% YTD. Dropped 42% in the crash versus 53% for a comparable index fund.
Intrepid Disciplined Value (ICMCX) - the all-cap value version of Intrepid Endurance. It's about half cash, half stocks now. 4.5% YTD. Lost 37% in the crash. It's a true all-cap value so it's hard to benchmark - most value indexes are mostly large cap and most mid-cap value indexes are mostly midcap. Eyeballing several, I'd say that a comparable passive product might have lost 50-55% compared to this fund's 37%.
One possibility with a bit more risk might be Adirondack Small Cap (ADKSX) which dropped an index-like 52% in the crash but rebounded so sharply that it's now leading its peers by 2.7% annually over the full cycle.
If you're a true believer in the research, you really need to look at Towle Deep Value (TDVFX) which has about the cheapest and smallest-cap portfolio around. Shorter record - just under five years - but very solid returns, vast insider ownership, no marketing, healthy internal culture. Microcap deep value is not, to be clear, a place for the faint of heart.
Just some teasers,
David

There is a big difference between the various kinds of "dividend" funds, and you need to do your homework (including actually reading the prospectuses) before you invest. I am always shocked when investors are surprised by something that happens to one of their investments, only to find out they could have known this might/would/could have happened and that it was part of the prospectus.
That being said, we have used a number of "dividend" funds over the years, a few of which we think have merit. Some, like PFF, are more fixed-income than equity, and have much more downside risk than one might think when prices on the underlying securities are at rather high premiums. Timing could be important here. We bought PFF in March of 2009 and rode it for quite a while. Salient Select Income KIFYX is also worth a look, I think. For REITS, it is hard to beat Cohen & Steers CSRSX and ICF.
Some mutual funds, like TIBIX and IVFIX, have dividend yield as an integral part of their investment philosophy. There are ETFs that combine income with targeted low volatility, such as SPHD. Others target only yield, like VYM, SDY, CVY, and PFM.
The current attraction of dividend-paying equities is that most companies' bonds are over-priced (meaning tiny yields), with lots of downside. The stocks not only have some long-term growth potential, but have a much higher yield than the bonds. But there is no free lunch in the dividend-investing arena. As in all investing, buyer beware.

PFF is awesome the last couple of years. Go back farther than that, alas, and it falls well behind other div-oriented funds or etfs. If considering, be sure to check out its headsnapping (>60%) plunge from summer 08 on.

Not an expert, but looking back over the last 2 years (S&P 500) I would say it has been range bound between 2100 on the upside and 1850 on the downside.

Looks about right

Not the same SEQUX from past years? It might recover but too many other good choices.

Not an expert, but looking back over the last 2 years (S&P 500) I would say it has been range bound between 2100 on the upside and 1850 on the downside.

I believe Target (allocation) funds can be used quite effectively to not only get you to "work retirement", but also as a tool to get you through until your "earthly retirement" aka death. Something I have shared before and I am still refining are these investment thoughts:
bee's Target Date Strategy:
I've often thought there are really two target dates, one targeting retirement from "work" and one targeting retirement from "earth".
Fully funding a retirement dated (glide path allocation) fund makes perfect sense. As a retirement dated fund glides towards its maturity date it attempts to provide a smooth landing for your investment at that date.
Effectively, at "work" retirement, an investor would have most of their assets in low risk investments. This might be helpful if the markets happens to severely correct in the first 5 years of retirement, but this portfolio must also be re-allocated the prepare for longevity risk (your money needs to last as long as you do). So, during the first few years of retirement a portion of this retirement portfolio needs to reallocated into investments that attempt to achieve portfolio longevity in retirement.
In a sense, a retiree could reallocate a percentage of their retirement portfolio into target date funds that target the incremental need to reach "earthly" retirement. Much like laddering CDs, a retiree could ladder target date funds in 5 year increments that will be used for spending if the retiree is lucky enough to reach that target date.
I could envision a retiree owning 6 separate retirement dated funds, each maturing 5 years further into the future (funding years 65-95 or 70-100) and each needing differing amounts of initial funding based on financial needs during that 5 year period in the future. The last fund matures on your date of death and pays your funeral expenses.
Sorry if some of this sounds a bit morbid to the reader.

When you sell shares, you realize a capital gain or loss regardless of how you're paid (in cash or in stocks that Sequoia gave you instead). If you get stocks, their basis is what you "paid" for them, i.e. the value of the Sequoia shares you just traded in. So if you flip those stocks immediately, you have no additional gain or loss.
So where did the gain on the underlying stocks go? The general rule is when a company (such as a mutual fund) sells stocks it owns, it recognizes a gain or loss. It might sell stocks to raise cash for your redemption. Or it might "sell" you those stocks directly (redemption in-kind) to meet your redemption request.
But there's one special line in the tax code (IRC 852(b)(6)) that says this general rule doesn't apply to redemptions in kind for registered investment companies (mutual funds, ETFs). Poof! No cap gain - no gain passed through to you, no gain for the fund.
Your "on the other hand" description is right, but usually not as much of a problem as it might appear. If you've owned the shares awhile, your shares may have gone up 25% since you bought them, while the fund is planning a 20% gains distribution. If you were to redeem your shares, you would wind up recognizing a 25% gain, rather than get the 20% distribution. So you might grin and bear it - at least you're not recognizing more gain than you actually made with the investment. Expensive, but not really unfair.
Investors who held their shares for fewer years (say their share prices are up 15%) are the ones who would be inclined to sell. Otherwise, they would recognize gains greater than what they'd made in the fund. As you wrote, that means that more gains would be distributed to the remaining shareholders. So instead of a 20% distribution, the fund might wind up making a 23% distribution. Still not enough to induce you (with 25% share appreciation) to sell, but there could be a few other shareholders with 22% appreciation who would now decide to sell. Ultimately, an equilibrium point is reached.
All this assumes people are astute about their tax situations and act rationally. That's your laugh for the day.