Ain't hindsight something.
As for stabler, B is smoother since 1972, sort of, as are PG and JNJ. With a log scale (M*) it's less easy to detect smoothness and the opposite, of course.
SHW has had this remarkable rise the last six years, so there is that. Do you think in a greener world going forward that this will continue? Is that how you yourself are betting?

What charts are you looking at? It's not a close call or a fair fight with the issues you mentioned...I guess a case MIGHT be made for JNJ in terms of the ride, but its avg return for the past 15 years is 6.8%. SHW is 18%. I'm really not sure what you're looking at. You mention 1972, that's a long time ago. I assume you realize that SHW split 4 times since 1981; 1 share bought then for $35 now equals 32 shares at $281. You'll look a long time for something better than that coupled with a max draw down for the past 15 years of under 8%. As to the future, gun to head to pick one place to put my money for the next 15, SHW may be it. They're going to sell a lot of paint in China and the ROW. And I say all of this having nothing currently invested in the stock, regrettably. That will change at the next opportunity.

Ain't hindsight something.
As for stabler, B is smoother since 1972, sort of, as are PG and JNJ. With a log scale (M*) it's less easy to detect smoothness and the opposite, of course.
SHW has had this remarkable rise the last six years, so there is that. Do you think in a greener world going forward that this will continue? Is that how you yourself are betting?

@NumbersGal, hi!
Thanks for the question. By happenstance, Eric C dropped me a note shortly after we published (in reality, while I was in the produce section of my local Hy-Vee grocery, foraging). We profiled ARIVX shortly after launch and again a couple years later. My general take has been that Eric has more discipline and more steady resolve than just about anyone. We'll catch up in the next week or so.
Eric's performance has been remarkable given that he's now at 80% cash. That's been a brilliant positioning in the past year since it's given him great relative performance in the face of a small cap bear. My hesitation is that, even with a bear, the cash level keeps rising which seems counter-intuitive.
The comparison with ICMAX is close but, over the past five years (Eric's been gone five years and five months), it's not entirely one-sided. Intrepid comes out ahead on a bunch of risk measures (recovery period from maximum drawdown, downside deviation, Martin ratio, Sortino ratio, Ulcer Index) while River Road pulls ahead on others (maximum drawdown, standard deviation, Sharpe). Annual returns are within 0.1% of each other.
In any case, I wouldn't rule ARIVX out and we are going to find time to talk before my new term gets crazy.
As ever,
David

@Shostakovich, I had a good conversation with Steve Lipper, whose family launched Lipper Analytics then sold it to Thomson Reuters. I've never had any great affection for Royce for all the predictable reasons: a swarm of undistinguished and virtually undistinguishable funds, most apparently run by Mr. Royce. I do like the approach in RYFSX. It's not as strong as Hennessy Small Cap Financials (HSFNX) but I like the global focus.
As I listened to Mr. Lipper, there was a lot that he didn't say but that I think he would have liked to. I poked, for example, on the role of Mr. Flynn as "assistant portfolio manager" still after 10 years. In general, I got the sense that there's a very clear sense of the need to reform (almost literally: re-form) the company. And I had the sense that one reason Mr. Lipper was hired was to manage that process.
Will it work? I don't. But I am more hopeful after talking with him than I was before. My general advice would be to wait out 2016 and watch, since he suggested stuff was in the pipeline that would emerge this year.
This is, I know, pretty impressionistic but sometimes how things are said carries as much meaning as what is said, and it's really hard to give you that nuance.
On FPA, I'm trying to be as fair and detached as I can be. Lots of talented people there, it's just that they seem more and more aligned with an absolute value orientation. That's a fine approach but it does feel like they're narrowing.
For what that's worth,
David

Why would Mr. Snowball consider ICMAX instead of ARIVX (as a replacemnt for ARTVX)? Eric Cinnamond built ICMAX until he left in 2010 and started ARIVX. Yes, the team he has left behind has followed his approach, but in the last 5 years and last year, ARIVX has had less volatility, a lower beta, and a higher alpha.

FYI: Pimco co-founder claims firm ousted him so he'd lose bonus
He now co-manages a $1.26 billion Janus global bond fund
Bill Gross said Pacific Investment Management Co. isn’t playing by the rules in its effort to kill the lawsuit he filed last year over his departure.
Gross told a California state judge Tuesday that the company he started more than 40 years ago improperly misconstrued his allegations in order to have them thrown out before he gets a chance to present his evidence.
Regards,
Ted
http://www.bloomberg.com/news/articles/2016-03-01/bill-gross-says-pimco-tries-to-lure-court-into-tossing-case

From hank: "If you need this money in 2-3 years, there aren't many really safe alternatives to cash, CDs, or short-term bonds. If, on the other hand, it's long term money but you are just hesitant to invest at this time, consider a conservative allocation fund with up to 60% fixed income as a conservative "sleep well" investment."
I'm there, and I would agree--- although I will mention PRSNX, which I own. Morningstar calls it a "World Bond" fund. I like the dividends. Just about .03 cents/share per month, these days. I ended up in there because I just wanted to keep it simple. I already own a big slug with TRP. It's not exactly a category that's on fire, to say the least. But the fund has been dependable.
Keep in mind, although you might get paid to hold such a bond fund with monthly or quarterly dividends, there is the share-price risk. 2-3 years doesn't give you much of a recovery-window, if your selected fund sags. Take the currency risk away by using a solid domestic core fund, instead, eh? My own is DLFNX. Uncle Jeffrey seems to know his way around the bond market. ;)

Global bond funds are highly dependent on the strength of the U.S. Dollar (tend to move in opposite direction). Most haven't been a good place to be over the past several years as the Dollar has strengthened. A lot has to do with Fed policy and our political leadership (fiscal policy) - and so that could change.
Most (but not all) of these funds hedge to some extent against currency risk and are a safer bet than unhedged or local currency funds if this is short term money. Since interest rates are low almost everywhere, a global bond fund would still be exposed to interest rate risk as are domestic income funds.
If you need this money in 2-3 years, there aren't many really safe alternatives to cash, CDs, or short-term bonds. If, on the other hand, it's long term money but you are just hesitant to invest at this time, consider a conservative allocation fund with up to 60% fixed income as a conservative "sleep well" investment.
I'll add that I don't share the predominantly bearish sentiment here and in the media. But guess I'm just an eternal optimist. :)

The demand for safe assets dominated asset flows in February. The main beneficiary of the risk-off trade last month: foreign government bonds in developed markets. Citigroup’s World Gov’t Bond Index ex-US surged 4.0% in February (unhedged US dollar total return). The gain also pushed this slice of the fixed-income market into first place for the trailing one-year period with a 1.7% increase.
Bonds generally were in high demand last month. The only corner of fixed income that didn’t deliver a gain in February: foreign junk.
As for equities, all the broad categories lost ground last month.

http://www.capitalspectator.com/major-asset-classes-february-2016-performance-review/
Also. Returns from M*
SPDR® Nuveen S&P High Yield Municipal Bond Etf HYMB
1 mo +0.62 Ytd +0.76 1 Yr +3.54 3 Yr +3.76
Alerian M L P Etf AMLP
1 mo +0.77 Ytd -13.03 1Yr -34.75 3 Yr - 9.60
U.S. Gasoline & Crude Oil Prices Move Higher
BY TOM MOELLER MARCH 1, 2016 @haver.com
Petroleum prices stabilized last week following steady declines since the June highs. Regular gasoline averaged $1.78 per gallon last week (-27.9% y/y)
Prices for natural gas continued to decline last week to $1.78 per mmbtu (-42.2% y/y), and were $1.62 yesterday.
More Weekly Energy Prices as of 02/29/16 @ below link

http://www.haver.com/comment/comment.html?c=160301A.html
Related.New markets for American Nat Gas

The Asia Vision LNG carrier ship sits docked at the Cheniere Energy Inc. terminal in this aerial photograph taken over Sabine Pass, Texas, U.S., on Wednesday, Feb. 24, 2016. Cheniere said in a statement last month. Cheniere Energy Inc. expects to ship the first cargo of liquefied natural gas on Wednesday to Brazil with another tanker to be loaded a few days later, marking the historic start of U.S. shale exports Photographer: Lindsey Janies/Bloomberg via Getty Images
The United States is shipping gas overseas for the first time in decades, but private companies sell to the highest bidder — and not just to the countries Washington might want for geopolitical reasons.
BY KEITH JOHNSONFEBRUARY 29, 2016
http://foreignpolicy.com/2016/02/29/americas-natural-gas-exports-wont-be-enough-to-blunt-putins-energy-weapon/
Oil News
ExxonMobil’s record bond sale. ExxonMobil (NYSE: XOM) made a big move with a $12 billion bond sale, its largest on record. The world’s largest publically-traded oil company could use the cash to buy up assets on the cheap. Exxon held its cards close to the vest, saying that the proceeds would be used for “funding for working capital, acquisitions, capital expenditures, refinancing a portion of our existing commercial paper borrowings and other business opportunities.” ExxonMobil still has a AAA credit rating, one of the few companies in existence to have the highest rating possible, but S&P issued a “negative” rating in early February.
Saudi cash reserves fall. Saudi foreign reserves continue to dwindle as the OPEC nation tries to shore up its finances and maintain its currency peg. In January, Saudi Arabia’s foreign exchange dipped below $600 billion for the first time in four years, according to the latest estimates. The government is burning through cash reserves at a rate of about $14.3 billion per month.
http://oilprice.com/newsletters/free/opintel01032016

Class B shares seem like one of the most misunderstood, maligned vehicles around. (I'm not defending load funds here, just looking at reputation vs. numbers.)

FYI: Class B Shares:: (Source Investopedia)
[...]
Cons
Long Time Horizon Required - If you withdraw funds within a certain period of time (typically five to eight years) you are a charged a back-end or deferred sales charge.
No Breakpoints - Class B shares do not provide breakpoints on the deferred sales charge, so regardless of how much you invest, there is no discount on these charges.
Higher Expense Ratios - Class B shares charge higher expense ratios than both Class A and C shares, until shares are eligible to be converted to Class A.

One of those cons is accurate, and IMHO the only objective negative to B shares (relative to A shares) - they don't give you a break in your commissions (loads) for larger portfolios.
There is one other downside but that has to do with psychology (marketing), not numbers. B shares are/were sold as "putting 100% of your money to work", implying that they were superior to A shares where you pay a load up front. Because of the higher 12b-1 fee (embedded load), B shares put some of that money to work for your broker, not for you. The structure made for an easier sale, but no clear advantage (or disadvantage) relative to A shares.
That gets us to the first dubious con: long time horizon required because of the deferred sales charge. A shares charge the full load up front. B shares amortize that load over several years, by charging an extra 0.75% (typical) in 12b-1 fees annually. Once the load has been amortized, they convert to A shares. If you sell early, then you have to pay that part of the load that hasn't yet been amortized - that's the deferred sales charge. The bottom line is that you wind up taking the same hit on return (due to the load) as with A shares whether you hold B shares for a long time (in which case you've paid the whole load over time), or whether you sell them quickly (in which case you've paid most of the load in a lump sum - just like A shares).
The other con listed - that B shares tend to have higher expenses than C shares - is just wrong. B and C shares typically have the same ERs, give or take a few basis points. That's because they both generally add a 1.00% 12b-1 fee and have the same management fees. The rest ("other expenses") is noise.
A good example is Fidelity Advisor Freedom® 2005 Fund. Here's M*'s purchase page, that shows the ERs for each share class. It is 1.00% for B shares and for C shares. This fund is great for showing the pure difference between share class expenses. As a Fidelity fund of funds it charges 0.00% for the fund; any extra fee is due strictly to the share class sales structure (i.e. load - front, back, level or combo).
The summary prospectus shows the ERs as 1.56%, because that includes the cost of the underlying funds (0.56%).
To reiterate, I am not defending load funds. I am saying that B shares are usually misrepresented (both on the positive side as I noted above, and on the negative side as by Investopedia).

Depends on your age. One of the best moves that an investor in the "young" demographic of the investment "lifecycle" ( age 20 - 50 ) can make for the long term, is to build a core position in small cap value universe. Academic and empirical evidence has shown that SCV has outperformed all other stock universes over 90 years https://docs.google.com/document/d/1kToqLWLISRk4n4YnSzv1hT5kBN54l5CvhwGgDwJKPJI/edit?usp=sharing. Prior to the 21st century, it was difiicult to invest in specific "stock universes" , but the evolution of exchange traded investment products/funds over the past 10 years has provided many options for investing in small cap value ( one being Vanguard small cap value ( VBR )).
The use of a low transaction, quantitative tactical allocation process has produced further risk mitigated alpha vs. buy and hold. https://docs.google.com/presentation/d/1pQuBfbPd18ca0G-KiZc5FIWNMx0pNa87INgsLjEwuzY/edit?usp=sharing
https://docs.google.com/presentation/d/1C37CJypoxHWHB09e3g25ewOGjP83wDZhj5j6tlrLJoA/edit?usp=sharing. Current model allocation would suggest to hold off on purchases for now.

... what are people's thoughts about a global bond fund to get a bit of income; or a structured alpha fund ?
My gut is that this market is crazy right now and will be crazy and/or flat for the next 2-5 years; but I'd rather not sit on cash if I don't have to.
Much obliged, all.
~ D.S.

FYI: Class B Shares:: (Source Investopedia)
These shares are classified by their back-end or contingent deferred sales charge. These shares are typically good for investors with little investment cash and a long investment horizon.
Pros
No Front-End Fees - Your entire initial investment contribution earns interest income.
Deferred Sales Charges - The longer you hold the shares, the lower your deferred sales charge.
Conversion to Class A - Class B shares automatically convert to Class A shares after a certain period of time. This is beneficial because Class A shares have a lower yearly expense ratio than Class B shares (see below).
Cons
Long Time Horizon Required - If you withdraw funds within a certain period of time (typically five to eight years) you are a charged a back-end or deferred sales charge.
No Breakpoints - Class B shares do not provide breakpoints on the deferred sales charge, so regardless of how much you invest, there is no discount on these charges.
Higher Expense Ratios - Class B shares charge higher expense ratios than both Class A and C shares, until shares are eligible to be converted to Class A.
Regards,
Ted
http://www.mfwire.com/common/artprint2007.asp?storyID=53556&wireid=2

FYI: S&P Dow Jones Indices actually maintains two indices of Dividend Aristocrats:
1. The S&P 500 Dividend Aristocrats Index SPDAUDP, -0.91% includes the 50 S&P 500 companies that have raised their regular dividend payouts for at least 25 consecutive years. That’s the only criterion. It makes no difference how high a company’s dividend yield is. An example of an ETF tracking this index is the ProShares S&P 500 Dividend Aristocrats ETF NOBL, -0.93%
2. The S&P High-Yield Dividend Aristocrats Index SPHYDA, -0.62% includes components of the S&P Composite 1500 that have raised their dividends for at least 20 consecutive years. This is made up of 107 stocks, including all of the S&P 500 Dividend Aristocrats. The SPDR S&P Dividend ETF SDY, -0.72% tracks the performance of this index.
Regards,
Ted
http://www.marketwatch.com/story/these-dividend-aristocrat-stocks-have-risen-up-to-24-a-year-for-a-decade-2016-03-01/print

Hi @DavidV,
Thank you for your question.
I do care about portfolio allocation in each account that makes up the master portfolio that I have detailed above. Naturally, the asset allocation does varry from account-to-account along with the holdings. For example, in my health savings account about one third is currently invested in only one fund (American Balanced Fund) and the other two thirds is currently held in cash which is much more than I need from an annual health care perspective. It is one of the accounts that I throttle form time-to-time by adjusting it's allocation as how I am reading the markets. Currently, with high equity valuations and anticipated interest rate increases I have rolled back my exposure to both stocks & bonds not only in this account but in all of my accounts. All the accounts get throttled from time-to-time but not all get throttled at the same time as I make changes (rebalance) over time. For example, I have been raising my cash allocation and lowering my allocation to both stocks and bonds for the past couple of years due to higher than normal price to earnings ratios for stocks and anticipated rising interest rates which will effect most bond valuations.
Generally, when I make a buy, I buy with the intent to hold the asset for at least a year. When selling something, in my taxable account, I generally take profits form long term positions while letting the shorter term positions ride until their profits (or losses) will be taxed as long term capital gains (or losses). For me, investing centers more around time in the markets over timing the markets. Trading centers around timing the markets. Generally, I hold more equities (towards the high range of my allowable allocation) when they have become oversold and their valuations are reasonable ... and, I'll hold less when their valuations have increase with higher than normal price to earnings ratios thus becoming overbought.
Most of these accounts have been in place for a good number of years as I am now retired and began investing when I was a teenager in FKINX (which was my first mutual fund purchased and still remains my largest single position at about six percent of my portfolio). Interestingly, form my late fifties, up to my full retirement at age 67, I made more from my investing endeavors than I made from working.
Thanks again for the question. I hope the above provides you with some insight as how I govern my portfolio and answers your question.

I have OAKBX along with AMRMX and others in my 401. OAKBX compared to AMRMX has worse numbers than the LV fund over the last year. In a downturn I would think the allocation fund would do better than a stock fund. I am considering culling OAKBX and splitting between stocks and bond fund choices myself. It seems as if the bond portion has added to the loses, not acted as a buffer of late. MAPOX and JABAX have both had recent manager changes while GLRBX has better performance numbers in the short term it is not considered a moderate allocation fund. Maybe the managers of FPACX and OAKBX have seen their best years.

@Old_Skeet: made the mistake of buying, but not selling. I got 3 good years out of CGMFX. Lifetime yield on that investment has been -7%. Was actually up about 4% before the bear reared its head, convincing myself that Heebner's massive short on T's would act as an inflation hedge.
CGM is miserable in a sideways market. And Ken's ego got the better of him after that one massive year.

I owned CGMFX at one time and sold it many years ago. It seems, form review of Morningstar's Performance Report the few making good money, over an extended period of time, were Natixis and Heebner. I bought this fund as a spiff and made money.

I usually rebalance the major areas (cash, bonds, stocks & other assets) of my portfolio when one of them gets to be plus or minus five percent form it's target with the exception being cash.
Example. My current target allocation to equities is 50%. With this, should equities rise to above 52.5% (105% of it's target) during a normal market cycle then I'll trim equities. However, if we are in a seasonal trend then I'll, at times, delay the rebalance towards the end of the seasonal cycle usually following some technicals looking for a breakdown in the trend. With this, I can either rebalance by the calendar or anytime by a break down in the trend. Should equities reach their upper limit within their asset allocation (currently set at 55%) then this requires a rebalance back to at least the 52.5% level and when the seasonal strategy concludes I'll generally rebalance back to the traget allocation of 50% unless equities are selling at a low price to earnings multiple and I'll position towards their mid to high allocation range for me.
Generally, if stocks are selling at a high price to earnings ratio valuation then I'll position towards the low end of my allocation range (45%) and if they are selling at a low price to earnings ratio valuation then I'll position towards my high allocation range (55%).
I am thinking there are many triggers that can warrant a rebalance incuding a need for cash. The above are just a couple of the things that can trigger a rebalance for me with most of them being driven by both stock and bond market valuations. In addition, I'll generally buy major downdrafts in the stock market and sell some equities off as the market recovers keeping within my allowable asset allocation range.
I call this working within one's asset allocation and somewhat follows Biblical beliefs in there is a time to plant and a time to harvest. Through the years this strategy has worked well for me.
Below is a description of my sleeve management system along with my portfolio's configuration. Note, there has been some recent fund movement within the sleeves.
Old_Skeet's Sleeve Management System (02/26/2016)
Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts along with my current positioning. The accounts consist of a taxable account, a self directed ira account, a 401k account, a profit sharing account and a health savings account plus two bank accounts. With this I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves. … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty & theme sleeve along with a ballast & spiff investment sleeve. Each sleeve consists of three to six funds (in most cases) with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held. By using the sleeve system one can get a better picture of their overall investment picture and weightings by sleeve and area. In addition, I have found it beneficial to xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets and wish to weight accordingly. All funds pay their distributions to the cash area of the portfolio with the exception being those in my 401k, profit sharing, and health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount with the residual being left for new investment opportunity. In addition, most all buy/sell trades settle from or to the cash area with some nav exchanges between funds taking place.
Here is how I have my asset allocation broken out in percent ranges, by area. My current target allocations are cash 20%, income 30%, growth & income 35%, and growth 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Currently, I am about 20% in the cash area, 30% in the income area, 35% in the growth & income area and 15% in the growth area. When a rebalance is warranted I'll trim first from the ballast & spiff sleeve.
Cash Area (Weighting Range 15% to 25% with target being 20%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 25% to 35% with target being 30%)
Fixed Income Sleeve: GIFAX, LALDX, THIFX, LBNDX, NEFZX & TSIAX
Hybrid Income Sleeve: CAPAX, CTFAX, FKINX, ISFAX, JNBAX & PGBAX
Growth & Income Area (Weighting Range 30% to 40% with target being 35%)
Global Equity Sleeve: CWGIX, DEQAX & EADIX
Global Hybrid Sleeve: BAICX, CAIBX & TIBAX
Domestic Equity Sleeve: ANCFX, FDSAX, INUTX, NBHAX, SPQAX & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 20% with target being 15%)
Global Sleeve: ANWPX, PGROX & THOAX
Large/Mid Cap Sleeve: AGTHX, IACLX & SPECX
Small/Mid Cap Sleeve: AJVAX, PCVAX & PMDAX
Specialty & Theme Sleeve: LPEFX, PGUAX, TOLLX, NEWFX & THDAX
Ballast & Spiff Sleeve: FISCX, VADAX & VNVAX
Total Number of Mutual Fund Positions = 47

Hi Professor David,
I was ready to whip out my checkbook to purchase a few shares of a GMO fund when I realized I was a tad short of the membership entry fee this month. Too, too bad. I suppose a few other MFOers also find themselves in that situation.
I was not unfamiliar with the stiff entry requirements that GMO directly imposes on potential customers.
Given the likely paucity of a large general clientele base, I’m somewhat puzzled by Jeremy Grantham’s frequent talks at public events like the MoneyShow. I benefited from his global insights on several occasions at such presentations. He is an impressive, controlled speaker who inspires trust and confidence. Wallets open when Grantham speaks.
After one such presentation, I did seek an alternate source of his funds working through Wells Fargo. That was a few years ago. The initial purchasing requirements were very modest, but I rejected the opportunity because of a heavy initial purchase fee. I still blanch from such ruthless and completely unnecessary charges. I consistently stay away because of that fee structure.
Best Wishes.