That's an argument for putting it all into TIPS. Ladder them so that you can live off of the meager coupons and periodic principal (at staggered maturities). With nominal interest near zero, this is essentially your mattress, but with inflation protection.
All of which is an argument that 3.3% should be the floor for any 30 year strategy. Or 2.85% for your 35 years. (Draw 1/30th or 1/35th of principal with the rest getting 0% nominal plus inflation adjustments.)
The problem with this strategy is that there's no possibility of the portfolio lasting longer than 30 (or 35) years. Most investment strategies are designed to last at least N years, and usually longer. So you'd better depart on schedule or before.

Please give opinion on effect of I bonds when and if
interest rates rise. They are about 25% of my investments
at 82 year of age
Regards
circa33

Find an allocation that meets your risk tolerance and long-term goals, keep cash needed from the portfolio in the next 5 years in CDs, cash or short-term bonds, then turn off the financial channels & don't listen to talk radio (both of which are a waste of time that could be spent doing something positive). And remember that the vast majority of people have NO money to worry about.

This seems very strange, but I have a math question for everyone smarter than I in that area:
Once you are down to the 2% and lower SWR, is it not the case that you might as well put it all under the mattress and take out what you need till it's gone, given life expectancies? In other words, say you really can live on 20k, 2% of a million, plus some inflation, and are say 62 (trying to be worst-case or stupidest-case here). 20k a year, okay, inflated appropriately. How many years does 20k last divided into a million even if you allow for inflation? Is it less than 35? I suppose it must be. Okay, put it all into bonds.

90% equities?
My 'inner-robot' is screaming 'Danger Will Robinson'....
Someone help me out here --- I guess I just don't get the "robo-adviser" fad... Seems more like marketing the sizzle, rather than delivering the steak. These retail brokerages are demonstrating they are "doing something", so they can seem to show they are adding value. Is a robo-adviser for investors too lazy/stupid to rebalance their own portfolio? If so, is an investor who is too stupid to rebalance, someone who should be 90% exposed to the equity markets?
15-16 years ago, would Vanguard's fully human advisor have provided the exact same allocation recommendation to a 35-year-old? If so, how does adding a "robot" improve things. Frankly, I would be more concerned with any broker who suggested a 90% stock allocation in 1999 -- when it would have failed so miserably -- then invests (how much) in a robo-program which delivers the same result in the 6th year of a bull market..
By the way, are Vanguard robo-human advisers cyborgs/bionic? Are they better than the fully human advisers? Better, stronger faster?

I wonder how many fall into my category. Over the years I collected a large number of fund mostly good ones.While I would not now buy at least 10 of the funds I own I do not wish to sell for tax reasons though I would sell if they started doing badly but its more they have been mediocre(one example I will sell when the manager dies is Gabelli Asset) as I resent the management fees.A fund I certainly would not buy today is Acorn.They are fairly easy to manage since I mostly take action in Roth and 401k accounts where taxes are not a concern raising or lowering equities depending on my view of market prospects but I never take very big moves..For about two years I have been nervous about the market but the action I took in taxable accounts was to stop reinvesting dividends. I used the income to take trips, eat out more and buy i bonds when the rate was reasonable. I regret that money market funds pay little and have not purchased a CD in at least 5 years.

I find the attitude expressed in that article reminiscent of Alfred E Neuman's "What me worry?"
One of the most storied investors on Wall Street was the late Marty Zweig. Mr. Zweig was famous for admitting with great frequency, when queried about the stock market that he "was worried".
Admittedly, the stock market will do what it will, whether we worry or not. But worry is a very salutary phenomenon -- it's nature's way of focusing the mind. Consider an investment landscape without people "worrying":
1. Company management: Nothing to worry about if we miss our numbers, we don't hold costs down, or revenues decline.
2. Company auditors: Nothing to worry about if we don't catch fraudulent numbers.
3. Security analysts: Nothing to worry about if we miss the problems at a company.
4. Ratings agencies: Nothing to worry about if we wrongly characterize a firm's liquidity and solvency.
Ever more all-time highs in the stock market is not guaranteed -- at least in a timeframe relevant to individual investors. It took something like 25 years for the stock market to regain its 1929 levels. Japanese investors are still well below the highs they experienced in 1989. How do you say "no need to worry in Japanese?"
Not worrying is the enemy. Worrying is your friend.

I've had successful fund managers retire on me, but never has one died while actively managing the fund. The difference in each case has been that there was succession planning, and the retiree had some influence on choosing and training the successor.

http://www.harborfunds.com/14198.htm (HAINX manager died)
A difference between MERDX and HAINX is that Mr. Aster's death was an accident. Regardless, your point about planned succession is important - all companies, not just investment management companies, should have succession plans in place just in case someone gets run over by a bus.

A team of investment professionals with a combined total of over 22 years of working closely with Richard Aster at Aster Investment Management Company have assumed management responsibilities for the Funds. The current investment management team will continue to manage the Meridian Fund portfolios using the same investment philosophies, processes, discipline and standards that Aster Investment Management Company has consistently and faithfully maintained over many years

http://www.prnewswire.com/news-releases/richard-f-aster-jr-passes-away-139575418.html

I was pleased to see a fund I own, Meridian Growth Legacy (MERDX), listed as one of the 20-year Great Owl Funds. It’s a great fund, and I have a lot of confidence in it.
But the original owner/manager of the fund died a few years ago. Meridian was bought by Arrowpoint Partners. The new managers, Brian Schaub and Chad Meade, were formerly with Janus. They have an investment methodology that is very different from that employed by the former owner. The fund also has a new expense structure (higher fees).
I realize the approach for selecting the Great Owl Funds doesn’t make adjustments when there is a change of managers (and I hate to be critical of the fine work on this site). Nonetheless, I think there should at least be a
n asterisk after Meridian’s name to inform readers that today’s Meridian Growth Legacy has nothing in common with the fund of 20-years ago, except for the name (and even that was changed). The original fund is certifiably dead.

I hadn't thought about WTIFX in a long time either, Slick; had it on watch for a while but never bought in. A few years ago it was predominately in industrials; now, from a quick look, it's 3/4 or so in industrials, tech, and consumer discretionary, and has been getting killed - close to dead last in the category for 2014 and 2015. No wonder they reopened it.

I came to the same decision point several years back and picked TROW - better long term growth potential.

District: VWINX is slated to be a long-term holding for me -- targeted to be 20% of my portfolio as I near/go into retirement. So I am biased. With that caveat, here is a thought...
Our current bull-market is long in the tooth. There is a high likelihood the stock market will encounter a "bear" within the next 3 years (for all we know, we may already be in one). If this sounds reasonable, I would suggest that purchasing the lower-beta of the 2 funds (VWINX) would make sense. If (when) the bear commences in earnest, and the stock market is significantly off its highs, you could then swap VWINX for VTMFX -- you may be "lucky enough" to realize a modest loss for tax-purposes at that time. -- And taking a position in the higher-beta fund only after investor sentiment (and prices) are less exuberant. ---
The "worst" that could happen if you did the above, is that we would experience no bear market for a prolonged period. -- In which case, you would still be holding a superb fund (VWINX)....

This ties in with my question in another thread regarding the calculation of long-term profit or loss.
I "spent" a certain amount of money investing in RPHYX. Over the years there have been lots of distributions, and unhappily, movement downward in the NAV. So how has that investment done? Do I now have more or less than what I put in, and by what percentage? (And is that more or less than keeping up with inflation?) While I do keep track of all of this on a spreadsheet, there's no way that I'm going to take the time to account for each and every distribution of each and every fund as an additional amount invested. I don't really care about that. All I need to know is do I now have more or less than I put in.
I'm grateful for the responses that I received regarding this question.

Hi @davidmoran,
A couple of the funds I have own since I started investing back when I was a teenager. These two are FKINX & AMECX, let's see I am sixty seven now. Then there are others that I have owned for more than ten years. As yes, I do fire some fund managers from time-to-time should their funds falter. One of the more recent funds that had been faltering, for a good while, and one that I let go was PASAX. Should have done it a year ago.
Thank goodness that the other funds within the sleeve have been performing well and offered production that continued to propel the sleeve. This is one of the benefits of the sleeve system. Should a fund falter then there are the others that can provide support and continue to propel the sleeve. In this case that is exactly what took place.
And, so it goes.
Peace.
Old_Skeet

And if you have no capital gains at all, you also get full credit against your ordinary income.

I understand your point, but this is not entirely correct. :-)
The ability to apply capital losses against ordinary income is capped at $3K. While you might not have any capital gains, you might have capital losses elsewhere bringing your total losses to over $3K. Or you might recognize losses in RPHYX itself above $3K.
That could happen if you let those losses pile up for several years before recognizing them.
Point taken, though.

For those that have a number of accounts along with a good number of mutual funds I formulated a sleeve management system that has helped me greatly. It might also provide you with some ideas that you can incorporate in something you might choose to develop for yourself.
The article speaks to a concern no doubt many have; but, it falls short and fails to offer direction as to how to solve the concern other than to go see a financial planner.
For those interested ... Here is what I did and I it found that it worked so well for me that I have chosen to stay with probally more funds than I absoutely need as I could probally reduce the number down to about thirty (three per sleeve) and still incorporate my system.
The system was derived from a betting system I used at the dog track many years ago. In this system I'd usually bet ten races and in these races I'd bet my three best picks in each race to win, place or show. Folks, I usually left the track with more money than I came with. So, for me, my system worked even better than I first thought it ever would. Even today, I still make an occasional trip to Daytona (visting friends) and bet the dogs using my system ... and, I still wear a smile as I usually come away with more money than went with.
Some ask me ... How you do you do this? If they were readers of the Observer then they would know. My wife knows, but our friends don't. So let's keep it to ourselves.
My Investment Sleeve Management System (09/02/2015)
Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts. 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 four sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve and a specialty 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 the 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 monthly; and, the portfolio as a whole at least quarterly although I do it monthly. 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 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 taking place.
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral targets are cash 15%, income 30%, growth & income 35%, and growth 20%. I do an Instant Xray analysis on the portfolio monthly and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc.
Cash Area (Weighting Range 5% to 25%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 20% to 40%)
Fixed Income Sleeve: GIFAX, LALDX, THIFX, LBNDX, NEFZX & TSIAX
Hybrid Income Sleeve: AZNAX, CAPAX, FKINX, ISFAX, JNBAX & PGBAX
Growth & Income Area (Weighting Range 25% to 45%)
Global Equity Sleeve: CWGIX, DEQAX, EADIX & PGUAX
Global Hybrid Sleeve: CAIBX, IGPAX & 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 30%)
Global Sleeve: AJVAX, ANWPX, NEWFX, PGROX, THOAX & THDAX
Large/Mid Cap Sleeve: AGTHX, BWLAX, HWAAX, IACLX, SPECX & VADAX
Small/Mid Cap Sleeve: IIVAX, PCVAX, PMDAX & VNVAX
Specialty Sleeve: CCMAX, LPEFX & TOLLX
Over the past 90 days, or so, the four most recent additions are AJVAX, GIFAX, JNBAX & VNVAX. The four most recent discards are CFLGX, DEMAX, PASAX & SGGDX. Total number of funds currently held equal fifty.
I wish all ... "Good Investing."
Old_Skeet

This fund has an ER of 2.4. That's a pretty high hurdle to overcome if you agree it's going to be low return scenario for years to come.

Hi Guys,
Like Edmond, I don’t have a horse directly in this race. I select the mutual funds that I own without a Socially Responsible Investing (SRI) criterion. My uniformed overarching belief is that any additional constraints imposed in the selection process reduces the candidate fund list, and could potentially harm performance.
Thanks to the excellent reference that MFOer LewisBraham provided, the accumulated research indicates that my fears were imaginary. In that report, the authors conclude that 9 academic studies find neutral or mixed performance results, and even one instance of outperformance. The models suggest that outperformance is a doable goal from a theoretical perspective, but that optimistic assessment is not executed practically by fund managers. See page 61 for these conclusions.
So, adding a SRI criteria in the selection process does not necessarily hurt returns, although, as in all investment decisions, it must be executed prudently. It might not do an investor any good, but it will not break the back of his portfolio either.
I have a nearby neighbor who actually worked on a solar farm in the late 1970s. He is not a fan of these farms. At that time efficiency was poor. The farm was located in the Southern California desert region. His negative anecdotal assessment was not base on the relatively poor energy conversion efficiency, but rather on the excessive water requirements to keep the solar panels clean. That solar plant has shuttered its panels and has been abandoned.
Solar panel efficiency has improved remarkably since those early days. But even after 40 years and countless tears from working the problems, our primary energy sources have not changed very much. How much? Here is a Link to a superior summary generated by the International Energy Agency:
http://www.iea.org/publications/freepublications/publication/keyworld2014.pdf
I invite you to scan this informative report. On page 7, the document shows the world’s Total Primary Energy Supply (TPES). The presentations graphically display energy consumption from the early 1970s to 2012. A pie chart comparison of the energy contributors in 1973 and in 2012 allows a rapid assessment of trends.
After decades of resourceful trying and skillful engineering, coal, oil, and natural gas remain the world’s primary energy sources. These 3 sources still provide over 80% of the fuel shares. Meanwhile, in the “other” category (geothermal, solar, wind), its share of the energy marketplace has advanced from 0.1% to only 1.1% over this 4 decade timeframe. This is not a brave new world signal. Progress in the “other” category is painfully slow.
There will be no eureka energy source moments in the near future. The fuel sources that govern the marketplace today will also be major factors for decades. The data show that coal production has steadily risen in the last 4 decades. These “other” sources have been experimentally explored for decades and are now respectably mature contributors. Don’t anticipate major innovations or efficiency improvements.
For example, solar photovoltaic cell efficiency can be significantly enhanced (to numbers approaching 30%) by using rare element materials like gallium arsenide. But that is not likely to happen. Why not? Rare element materials are extremely costly, and more importantly, universal scale limitations exist because rare element materials are “rare” (what a shocker).
There is some hope that thin-film gallium arsenide might prove doable. Let’s hope so. At this moment Gallium arsenide costs 1000 times more than an equivalent product made from silicon. The current goal is to reduce that differential from 1000 to 100. That’s still a long way from home.
The International Energy Agency report also shows consumption and production data on a country-by-country basis. Additionally, the document provides future energy projections that just might be useful when making an investment decision. For those of you considering energy investments, this referenced report just might give you an edge.
Progress in the energy field will be made, but only slowly and with many missteps. That’s science. In that context, keep John Maynard Keynes cautionary warning in the forefront: “Long run is a misleading guide to current affairs. In the long run we are all dead.”
Good luck and good research to all MFOers.
Best Wishes.

meconti:
Thanks for note. I think [can you confirm] that you are talking about the table that appears on the bottom of "Page 9", which I agree is a complex mess.
HOWEVER, the linked document ALSO contains a table that appears on the left side of "Page 28". [*]
That table includes performance for 3 months, 6 months, 1 year, 3 years, 5 years, 10 years, and [wait for it] "since inception".
If you look at that table - which compares the Baron Small Cap Fund to the R2000 Growth & the S&P500 indices, it is clear that the fund has under-performed both, *consistently* for the last 3 months, 6 months, 1 year, 3 years, 5 years, and 10 years.
Another way to see this is to look at the M* [Performance] tab for this fund:
http://performance.morningstar.com/fund/performance-return.action?t=BSCFX
for these periods. If you do - as of 09-02-2015 - you will see that the fund has been resting fairly consistently among the bottom (worst) third or so of its peers for the last 3 months, 6 months, 1 year, 3 years, 5 years, and 10 years.
To almost coin a phrase, there is no need to feed this dog. This dog won't hunt. Thanks to the folks at Baron for providing (diligent at least) investors with the table (on Page 28) that shows the weakness of the fund.
[*] Note: If someone knows how to link images and has the time, that would be a great help! Thanks [!] in advance [?].

In response to the original post, I found an even more deceptive depiction of performance in the most recent Baron Funds quarterly report. I don't know how to insert the table from the report (p. 9 of report). I hope this link works.
baronfunds.com/BaronFunds/media/Quarterly-Reports/Quarterly-Report-063015.pdf
When I looked at the table, I said to myself, "Huh?" There are column headers for 10-year, 5-year, and 3-year returns along with average excess returns. I had to study the table and footnotes for 30 minutes to see what they did. At first (and second) glance, one would get the impression that BSCFX has been performing wonderfully. By using the entire history of the fund, they have whitewashed over its "recent" performance. BSCFX uses the Russell 2000 Growth Index as its primary prospectus benchmark. I looked at returns of BSCFX compared to the ETF IWO (iShares Russell 2000 Growth ETF). If you were a new investor, or added to your account in the past 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, or 13 years, you would have trailed the ETF/benchmark, and with a higher tax cost ratio.
Number of Years Cumulative Return BSCFX
Begin Date End Date BSCFX IWO Annualized Underperformance
6/30/2002 6/30/2015 13 226.34% 252.77% -0.66%
6/30/2003 6/30/2015 12 223.88% 250.71% -0.73%
6/30/2004 6/30/2015 11 156.60% 167.07% -0.40%
6/30/2005 6/30/2015 10 120.37% 156.46% -1.65%
6/30/2006 6/30/2015 9 104.96% 124.22% -1.09%
6/30/2007 6/30/2015 8 71.40% 92.24% -1.54%
6/30/2008 6/30/2015 7 99.71% 115.67% -1.22%
6/30/2009 6/30/2015 6 154.73% 186.54% -2.31%
6/30/2010 6/30/2015 5 113.90% 142.93% -3.00%
6/30/2011 6/30/2015 4 51.67% 69.41% -3.11%
6/30/2012 6/30/2015 3 57.98% 73.93% -3.80%
6/30/2013 6/30/2015 2 27.52% 40.43% -5.58%
6/30/2014 6/30/2015 1 4.05% 12.54% -8.49%
I found Baron's report egregiously deceptive. When this fund was new and nimble, it sidestepped the dot.com debacle. Since then, its quacks like an index fund with a grossly high 1.30% ER. Even as assets continue to overwhelm this fund, it continues to charge a 0.25% 12b-1 fee to attract even more assets.