FYI: For the last 35 years, the classic 60/40 portfolio returned 10.5% a year. It’s hard to imagine that these results will be matched over the next 35 years, which has a lot of people looking to alternative ways of managing a portfolio. Today I’m going to examine one of these alternatives, the “Permanent Portfolio,” which was outlined in William Bernstein’s “Deep Risk” (and elsewhere). The Permanent Portfolio consists of 25% of each of the following:
U.S. Stocks (S&P 500)
Cash (One-month t-bills)
Long-Term Government Bonds
Gold
Regards,
Ted
http://theirrelevantinvestor.com/2016/12/02/the-permanent-portfolio/
M* Snapshot PRPFX:
http://www.morningstar.com/funds/XNAS/PRPFX/quote.html
Lipper Snapshot PRPFX:
http://www.marketwatch.com/investing/Fund/PRPFX
PRPFX Is Unranked In The (30/50 Equity) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/allocation-30-to-50-equity/permanent-portfolio/prpfx

Hello,
I enjoyed reading Charles Boccadoro's blurb he wrote about "A Low Cost Alternative to One USAA Managed Portfolio."
I decided I'd carry the analysis work a little fauther on the 50/25/25 portfolio consisting of FFNOX, FTBFX & BBALX and inputed the funds along with the necessary data into Morningstar's Portfolio Manager. The things that stood out in this analysis was that the portfolio as a whole had a yield of 2.54%, with an average bond duration of 5.26 years along with an average maturity of 7.4 years. The funds within the portfolio combined were trading back of their 52 week high by 2.1%. The portfolo's year-to-date return was reflected at 6.2%, 1 year return at 4.4%, 3 year return at 4.1%, 5 year return at 7.5% and the 10 year return was shown at 4.8%. Year-to-date the porfolio's performance was pretty much in line with my bogey, the Lipper Balanced Index.
All in all, this is not a bad three fund portfolio ... and, if I were a new investor starting out today it is one that I'd most likely find favor in. But, to reconfigure my own portfolio would necesitiate tax payments for the large amounts of capital gains I'd face if I began to liquidate funds within my own portfolio and move towards something similar. Plus, I'd be taking a pay cut. My trading activity alone within the growth area of my portfolio has generated capital gains amounting to about 10% of my gross income this year. And, if I am not careful I'll be getting dinged for higher medicare premiums. So for me, I plan to continue my sleeve investment system which has also offered good returns. From review of your suggested portfolio's performance compared to my more complex one justifies running my more complex portfolio.
Thanks Charles for writting about your low cost three fund portfolio. I enjoyed reading about it very much as it provided something, crafted by an expert, for me to compare my own against.
Old_Skeet

I owned HSGFX for a few years shortly after its inception. In theory, it's a great idea: capture most of the equity market's positive return - while hedging against steep market declines. (It's not my intent here to attempt to analyze its inner workings.) Should the fund be classified as market neutral? Perhaps. But within that camp there are numerous, sometimes sharply contrasting, approaches and styles. I think most would find HSGFX's approach and operation a bit unconventional within the market neutral arena.
I keep the fund on a short tracking list along with 8-10 other funds that I don't own. Provides a glimpse (albeit incomplete and cursory) into how funds like HSGFX, as well as precious metals, high yield, GNMAs, growth, value, etc. react to market developments over both shorter and longer term periods. A purely academic persuit some would find pointless - but from which I feel I gain a better understanding of investing.
What I've observed over the past decade or more watching this fund is that during poor markets it does normally inch ahead a bit. But for every 1-foot it advances during adverse periods, it appears to lose 2-feet when the markets resume an upward bias. Over longer periods that's a losing proposition.
-
It would be sacrilegious I suppose to suggest that Hussman attempts to time markets. So I won't. :) However, I'll submit that you or I as individual small investors are better equiped to time markets than a fund is. We are nimble. We are focused. We can react and literally alter our allocation on a dime. The big guys can't do this. They're anything but nimble - and since money tends to flood either in or out of funds near market inflection points, the onrush makes the manager's ability to alter his investment mix even harder.

This was of particular interest to me: Moerus. http://moerusfunds.com/fund-information/
Years ago, I'd held Amit Wadhwaney's Int'l Value fund at Third Avenue, but dumped it when results fell down a slope for too long to keep me happy. I guess it took a couple of years of bad performance to chase me out of TAVIX. ... Should I look forward to investing in MOWNX?
Concentrated portfolio, just 30 holdings, plus a short or two, and holding LOTS of cash, which I can understand, because it's so young. Does the fund manager deserve to be trusted---again? : http://portfolios.morningstar.com/portfo/details?t=XNAS:MOWNX&culture=en-US&region=usa
+6.9% in its first 6 months.

Hi Catch - Geez, I really need to edit/fact-check these stats for awhile before I can confirm or deny your answer. (We strive for accuracy here.) So, your prize will be delayed for an indefinite period. :)
Thanks, however, for participating in the game.
You may now direct your (obvious) intelligence to the questions of (1) Why anyone would own this fund and (2) How the same manager could remain in place for 16 years. (Each correct answer increases your prize amount by 10%.)
---
Edit: Anyone have easy access to how some of the broader indexes performed since 2000?
(S&P / Mixed bonds / 60-40 Balanced?) That would be very interesting. I'd imagine even a good short-term bond fund like Price's (PRWBX) would have bested 1.49%.

Manager has lasted 16 years, on such performance??? Nepotism, I should think, is in play, here.
My two biggest holdings carry both stocks and bonds, but I don't ever remember either of them holding up to FORTY percent bonds. I recognize a 60/40 mix is the classic recipe for later-life and retirement stability. PRWCX and MAPOX. Totally fabulous in every way. Except that it's not possible to have sex with them. ...
...I just looked at PRWBX, but my Interm. Term bond funds have a leg-up in terms of performance--- even though bonds have been crucified since the election. I understand that a short-term bond fund is there in order to cover a DIFFERENT base than a standard Core bond fund. My bond funds: DLFNX, PRSNX, PREMX. Add the two balanced funds, and my stuff does indeed approach that 40% figure, at 39%. (39 bonds, 44 domestic equity, 8 foreign equity, 7 cash and 2 convertibles or shorts. I don't engage in shorts. It's the Fund Manager's own play.
Happy Saturday. Thanks to those on this message board and its creators and contributors!

In financial planning industry there is significantly more women these days. My parents still work with one at Vanguard and that was 30 years ago.

Hi Guys,
This is not a worrisome problem since it is slowly self-correcting as a function of time. What is true in the financial industry has been historically true in most other industries. I have first-hand experience in this arena.
Fifty-six years ago, I married the love of my life who was studying physics at that time. She was close to being the female Lone Ranger in that field at that time. Also, in my engineering class, only one female represented that sex in a cohort of about 70 engineering students. That situation is dramatically changing at the present time.
I have questioned my wife extensively about her motivations, her influences, and pressures that prompted her to swim against the prevailing tide in that period. She claims no unwanted pressures that moved her into the scientific field. For her, it was simply a matter of choice. It was what she wanted to do.
I asked if others attempted to dissuade her by treating her badly or unfairly. Again the answer was negative. Overall, other students (all male) and her instructors (all male) encouraged and helped her. It was a very positive experience with universally healthy interactions.
All this happened decades ago, and I believe the situation has improved immeasurably. It's always a mistake to automatically exclude 50% of the population from active participation. Predicting when or from where the next Warren Buffett will emerge is an impossible task. Men and women do emphasize different elements when making a decision. Each has a different decision pathway. That diversity of thinking will generate more varied approaches and better solutions when merged in a fair and respectful way.
I've learned that I'm a far more productive and more successful investor when I honestly discuss investment options with my wife. Getting more females to consider the financial industry as a life long career will improve that industry from just a sheer numbers perspective alone. But the likely improvement runs much deeper than the simple numbers game. The way in which decisions are formulated and made is greatly expanded which should benefit all of us.
When our family discusses financial matters with professionals, I am more comfortable when the professional team includes a few female members. That comfort extends well beyond trust; it includes a belief that options will be more fully explored.
Best Wishes.

Hi Catch - Geez, I really need to edit/fact-check these stats for awhile before I can confirm or deny your answer. (We strive for accuracy here.) So, your prize will be delayed for an indefinite period. :)
Thanks, however, for participating in the game.
You may now direct your (obvious) intelligence to the questions of (1) Why anyone would own this fund and (2) How the same manager could remain in place for 16 years. (Each correct answer increases your prize amount by 10%.)
---
Edit: Anyone have easy access to how some of the broader indexes performed since 2000?
(S&P / Mixed bonds / 60-40 Balanced?) That would be very interesting. I'd imagine even a good short-term bond fund like Price's (PRWBX) would have bested 1.49%.

Goal: "... long-term capital appreciation, with added emphasis on the protection of capital during unfavorable market conditions."
Inception: July, 2000
No-load
Manager Tenure: 16 years
(From Lipper):
ER: 1.13%
AUM: $528.5M
Current Holdings: 52% Stock, 49% Cash
Annualized Performance (mostly negative)
YTD: -9.54%
4-Weeks: -5.24%
1-Year: -7.90%
3-Years: -9.13%
5-Years: -9.60%
10-Years: -4.94%
From Inception (16 years): +1.49%

For what it is worth ...
Although some might think of American Funds as a "crappy shop" ... not me. I have been one of their investors since my teenage years (now in my late 60's) and I have found their investment services, through the years, to be of good value which has enhanced my financial posture. I am sure there are other fine investment shops as well as not all my money is with American Funds.
And, I have enjoyed reading the recent postings, in this thread, about American Funds and their use of their sleeve management system. Something that I have adopted, of sorts, within my own portfolio.
Please keep those post coming ... As I keep learning more about their marketing and investment techniques with associated expenses. Seems, their success provides something for others to write about stating their views with some these being of good nature.
Will I keep investing in American Funds? You can bet your sweet xxx, I will! From my perspctive they are a good large cap value shop that also offer some good hybrid and asset allocation funds.
Old_Skeet

Over the past 4 weeks FAIRX is up nearly 29%! Morningstar rates FAIRX a one star for every time period (could be some kind of record for a fund that's been around more than 10 years).
Looks like FAAFX has made it YTD gains in the past 4 weeks also.

Dear friends,
The season of darkness and light is upon us, which is a pretty good signal that the December issue of the Mutual Fund Observer has launched. You can find it at http://www.mutualfundobserver.com/issue/december-2016/
If you prefer the long scrolling read, that's available at http://www.mutualfundobserver.com/2016/12/
Highlights of our December issue include:
Snowball’s reflections on how to react to the fact that five major U.S. equity indices reached all-time highs at the end of November (short version: the last such occurrence was 12/31/1999, which implies a degree of circumspection is in order) and to the fact that Donald Trump is president-elect (short version: don’t).
Leigh Walzer, president of Trapezoid LLC, starts with the premise that investment risks are now tilted strongly toward inflation but that traditional inflation hedges (e.g. TIPs) are unattractively value. As he models superior alternatives, he offers up the surprising possibility that modest doses of small cap funds might well make a major difference.
Ed Studzinski has far more extensive investment experience than the rest of us and often pursues matters into the thickets. This month he looks at not-quite criminal misstatements of qualifications in a case surrounding a royalty trust to raise the prospect that we need to be a bit less credulous when our managers are introduced to us, then recommends James Cloonan’s new Investing at Level 3 for its cautions on conflicts faced by mutual fund directors. He ends by encouraging folks to learn from Yale’s David Swensen’s advice, don’t hire managers who seem bewildered by their own portfolios.
Many of us have portfolios that have sprouted funds like a garden sprouts weeds; Charles Boccadoro offers another tutorial on how to systematically assess and simplify a portfolio, using a friend’s USAA collection as a guide.
One of the great virtues of scholarly writing is that it’s valued for its care and precision, not for its ability to generate clicks or get the author invited onto some Fox Business show. That sometimes masks the fact that really important insights are available, if only you’ll look for them. This month Snowball highlight’s three of the most interesting bits of research from 2016: (1) the largest sample of funds ever assembled offers evidence that small funds consistently outperform large ones, (2) a study of over 3000 fund management teams finds that intellectual diversity on the team is a major predictor of performance and (3) an examination of the behavior of 7000 German individual investors shows that introducing ETFs into a portfolio drives performance down. We offer summaries of what each scholar did and found, and how it might affect you plus there’s a link directly back to the original.
Mark Wilson, the Cap Gains Valet, offers a short Thanksgiving reflection on the cap gains season: less pain, more time with family.
Snowball profiles the best small cap fund you’ve never heard of. Really. 20 year record. Same manager. Asymmetrical risk-return profile over the last 3 years. And the last 5. And 10. And 20. It’s never made it to the top of the hot, hot, hot list but continues offering what you need: reasonable gain, minimal pain. (And it’s from Nebraska.)
Like Leigh Walzer, T. Rowe Price is worried about instability in the world economy and in the fixed-income market, which led them to launch a new fund at the beginning of November. We offer a first look in our Launch Alert for T. Rowe Price Total Return.
One development that’s not important to you yet, but might soon be, is the decision of former Wasatch manager Laura Geritz to launch her own advisory firm in partnership with her former Wasatch colleagues who launched Grandeur Peak. We spoke with Eric Huefner of Grandeur Peak to give you a clue of where that partnership is going.
But wait, there’s more! We detail 36 fund liquidations that make sense, and three or four that don’t. Chip tracked down 50 manager changes, one of which might be portentous. We found only a few funds (and one really irksome ETF) in registration. And, well, stuff. There’s other stuff, too.
We hope you enjoy it all in the December Mutual Fund Observer at www.mutualfundobserver.com!

@Alban
The only time I have used American Funds in the last 30 years is with a broker, but I understood then that they were expensive. I NEVER did any better than I would have done in an index fund.
To combat the "passive revolution" they are making a huge push to convince the public that splitting the funds into sleeves will enable them to be nimble and risk conscious.
You have to ask yourself, "why wouldn't I be better off in an Index Fund?" It is almost impossible for any manger running billions ( AWSHX has 84 Billion to move) to beat an index, over a significant period of time. How can you move even 5 billion dollars around in a couple of weeks? So why try?
I have a broker friend who desperately wants me to give him my money to put into American funds.. in the next breath he crows about how much money he has with them and all the bennies that he gets because of this. Where does this money for his free trips etc come from? you and me!
Look at AWSHX over ten years... VFNIX beats it by 5% . VFNIX lost 4% more in 2008 but you are still ahead because of the fees. M* lists AWSHX is a great choice for "risk adverse" investors. Why? Because it lost 33% vs 37% in 2008?
If you want to watch good mangers at work, do some digging into some small funds here at MFO and put some money with someone whose previous results and focus fits with yours... or even better, choose a fund that is totally opposite what you would do because those funds will diversify your investments.
even 0.58% adds up over the years

Oppenheimer does this all the time. Don't know if this clause exists in all their Prospectuses, but it's certainly in many. The following excerpt is from the Prospectus for their Flexible Strategies fund. The same setup (Cayman Islands Subsiderary) was used with my Commodities Total Return fund (QRAAX) before it crashed and burned last spring. Hmm ... I haven't seen anything like this from my other fund houses. I supposed in the past that with Oppenheimer it was either (1) a tax-dodge or (2) some way of their limiting liability from disappointed investors (of which they've had many). Just a guess.
(Excerpt) "ABOUT THE FUND’S WHOLLY-OWNED SUBSIDIARY. The Subsidiary is an exempted company incorporated with limited liability under the laws of the Cayman Islands and is overseen by its own board of directors. The Fund is the sole shareholder of the Subsidiary and it is currently expected that shares of the Subsidiary will not be sold or offered to other investors. If, at any time in the future, the Subsidiary proposes to offer or sell its shares to any investor other than the Fund, shareholders will receive 60 days’ prior notice of such offer or sale and this prospectus will be revised accordingly."
https://www.transamericaannuities.com/media/PDF/MerrillLynch/Prospectus/IRA_Annuity/Oppenheimer-Flexible-Strategies-Fund.pdf
PS: Oppenheimer's operations in many respects offer a stark contrast with those of T. Rowe Price. I've owned a few class A shares there for near 20 years. I'm planning on dumping them in a few more years. I converted to a Roth in early '15 and prefer to leave that money with them until the 5-year holding period is met (just my intent - not a requirement).

I'm staying with my small position for past 4 years.

Confirming your statement about AF that they're marketing experts. Didn't matter whether the F shares did anything new, they were sold as "new and improved".
I took a quick look at EuroPacific Growth. The first prospectus in which class F shares appear (3/15/2001) shows expenses of 0.46% (management) + 0.25% (12b-1) + 0.21% (other) for a total of 0.92%.
The prospectus from ten years ago (6/1/2006) shows expenses of 0.43% + 0.25% + 0.16% for a total of 0.84%.
The current prospectus (6/1/2016) has class F-1 figures of 0.42% + 0.25% + 0.19% for a total of 0.86%.
It is true that the F (now called F-1) shares tend to run a few basis points higher than class A shares. The difference is entirely in "other expenses", and I've always guessed that's because the share classes hit slightly different target audiences and the servicing costs are slightly different, though not enough to complain about. Maybe expenses have gone up in the past ten years for some other AF funds. Maybe even most of them. But not for my limited sample of 1.

Reduced considerably my multiyear holding in TGBAX (pretty much a scratch trade, made a tiny profit as I recall) and I'm down to a 6K toehold. Holding mainly to keep access to that class of the product for when global/EM bonds return to favour.

Have you guys bailed on Hasenstab? Flat over the past 3 years....
FNMIX has done better. DIBRX has not performed great either.

Ok, guys. Nice to know you're out there. @JohnChisum: PREMX has paid me over $1,300.00 in 2016, in monthly divs. If there is a very small cap gain---as in years past, all well and good. But they've been paying, right along. I'm gonna just call them. gotta run, right now. Thanks.

Have you guys bailed on Hasenstab? Flat over the past 3 years....
FNMIX has done better. DIBRX has not performed great either.

I believe I came across the same situation , as I was looking at last years taxes. I'll take a look & see which fund this happen to & report back.
Derf
P.S. Probably happens more than one would guess.

Thank you, @Derf. The thing is, the footnote I quoted (original post, above) states something. With no rhyme or reason. (Hello, shareholder. Just GUESS why this footnote was necessary, and what caused us to have to include it!)