Hi @Willmatt72,
I think how you go about this is up to you with there being no wrong or right answers.
I usually make changes slowly. First I think you need to Xray your portfolio as a whole to see what you have and to see its diverfisication. Then you need to Xray each fund to determine its makeup. Then you can start subtracting or reducing positions adjusting your overall allocations here and there and then view this through Xray to view these changes. You might also study some funds that have an asset alocation and risk profile you are seeking to build.
Again, I'd go about these changes slowly no more than 1% per month in moving assets from one area to another. Example, if you are wanting to reduce you allocation to high yield start working this off slowly because now that they have been beaten-up of late they might recover some throuh an average out process. Then you need to decide where you want to put the one percent you are lightening up over in the high yield area. Do you have any convertible and bank loan funds? These are something you might wish to explore. I have them in my portfolio.
Good luck ... and, again my suggestion is to make changes slowly. Following the one percent per month rule over a years time you will have relocated 12% of the portfolio in a years time. Based upon a million dollar portfolio that's about $120,000.00 relocated each year. You might find that it will pay to keep moving some money around from time-to-time moving away from a static allocation towards something that offers some flexability.
In addition, I'd find a risk tolerance questionaire and determine what overall cash, bond and stock allocation is right for you. My broker sends me one to fill out and return about once annually, now that I am retired. I take a little more risk than they suggest in equities but I also hold more cash than they think I should plus I am a little light in fixed income over their suggested range. This might be something worth visiting.

I customarily wait for year-end pay-outs and then, after the New Year, re-jigger. I like to feed profit from aggressive funds into more conservative funds. (Trim MSCFX for example, and put the proceeds in MAPOX. But not this year. No profit in MSCFX.)
"what is the best way to change your asset allocation, slowly over a period of a year or two or drastic changes over a period of a few months? I know it's not the best time to make those changes, but maybe I should wait for the market to settle down."
If you've any funds that generated profits from the past few years, find yourself an excellent bond fund that can serve as your CORE--- even if it's not labelled as such. I own DLFNX, but the big, fat sister--- DLTNX--- performs better, even through the recent fecal couple of weeks. Put profit into a core-bond fund, out of high yield. But don't necessarily CLOSE your HY positions.
Or, look at the whole thing as a longer-term process of DCA-ing into more ideal funds for your own Big Picture. Right now seems a decent time to buy. Or get into some good, currently cheap blue-chip individual stocks. Apple at these prices looks like a steal.
http://www.morningstar.com/stocks/xnas/aapl/quote.html
http://www.morningstar.com/funds/XNAS/DLTNX/quote.html
http://www.morningstar.com/funds/XNAS/DLFNX/quote.html
http://www.morningstar.com/funds/xnas/dodix/quote.html
http://www.morningstar.com/funds/XNAS/FTBFX/quote.html

Obviously, the past few weeks have been a reality check for investors who thought they had the proper asset allocation for their portfolio but were wrong. I consider myself part of that group. Multiple years of gains can make one complacent and oblivious to the downside, especially when it hits hard. I have a fairly large portfolio (just about 7 figures) and my asset allocation is about 40% equities, 50% bonds and 10% cash. However, I realize that my equity portion is too aggressive and my bond weighting is geared more toward high yield bonds. So, my equity portion feels more like 60% equities, which is way too high for me given that my goal first and foremost is a low risk, income oriented portfolio. With a million dollars in my portfolio, I would be happy with 3-5% returns on average over the next 15 years, when I hope to retire.
My question is - what is the best way to change your asset allocation, slowly over a period of a year or two or drastic changes over a period of a few months? I know it's not the best time to make those changes, but maybe I should wait for the market to settle down.

Yes, it is that uncertain feeling until it proves itself years later in 2000 and 2007. That is one reason having cash give you that option. What has Warren Buffet bought lately?

Good point; you're right that it's an assumption. I'd forgotten that it was one that I made early on, but it's made so much sense over the ~ two years I've owned it that I've obviously started treating it as fact.
The mortgages are non-agency, which implies lower ratings, the % of muni holdings has pretty much tracked the % of IG (see now, for example, 40-ish% munis, 40-ish% IG), and the rate sensitivity led me to assume the same. Doesn't mean it's exactly 1:1, but overall, I've perceived that as the pattern that reconciles the NAV behavior and yield of the fund.
Just mho - AJ
P.S. I'll try to remember to call 'em tomorrow and see what they say. I've talked to an analyst or manager there twice but can't recall if the IG-junk breakout was a topic.

Had this discussion before but with 50% B credits or lower and near 50% in Munis PTIAX should be included in a high yield muni discussion.The fund keeps chugging along.
https://www.google.com/finance?q=MUTF:PTIAX&ei=MNKWVrneEpeSefmYudgO
http://www.ptiafunds.com/images/website/documents/fund-documents/ptiax_factsheet.pdf

A bit more muted returns compared to the open end junk munis. But agree TSP-Transfer it has been excellent over the years and very trend persistent with low volatility. It may have a place in my portfolio someday were I to spend less time obsessing over the markets. For now, the short term redemption fee is the deal breaker.

Hi Guys,
Maybe yes, maybe not so.
The January effect is a correlation that has not been especially prescient in the last few years. If you search hard enough some correlation will be discovered. This could be a false random success. Buyer beware.
I addressed this issue on MFO a few days ago and added the dimension of biased reporting. You might want to access it here:
http://www.mutualfundobserver.com/discuss/discussion/25326/honesty-trustworthiness-and-the-new-year#latest
We all are a little guilty of seeking conformation data. Enjoy.
Best Wishes.

So, you're expecting a couple of years to go by, before PRSNX produces? I've not been in very long, and it's below the break-even line for a year, but the 5-year result is not terrible, at 3.41%.

The top court in New York is the Court of Appeals. See recent obituary of widely respected Chief Judge Judith Kaye this past week:
"Judith S. Kaye, the first woman named to the highest court in New York and the first to serve as the state's chief judge - a job she held longer than any of her 21 male predecessors - died on Thursday at her home in Manhattan. ... Judge Kaye presided over the seven member Court of Appeals for nearly 16 years and also supervised the $2.5 billioin, 16,000-employee statewide judicial system, which she modernized by making jury service more equitable and convenient and by establishing boutique courts concerned as much with problem solving as with punishment."
Aside from those boutique courts and such, the lowest level trial court in New York State is Supreme Court.
@LewisBraham - that was my first impression, too. I haven't gone back to check whether the prospectus contains the usual verbiage about these conditions being satisfied when security is purchased (as opposed to being continuously satisfied).

@Crash Yes, hasn't DLFNX been a pleasant surprise? I expected more volatility. As for this offering, I've grown a little partial to my PRSNX, too, and just did some rebalancing into it to get my ave. share cost down, so I'm gonna watch and wait. As BobC correctly surmises (IMO), it's gonna take a couple of years to see if it's a winner, anyway.
Frankly, I'm much more interested in the upcoming infrastructure debt fund, although I was disappointed to learn, after reading the entire SEC filing, that it may not be possible to purchase retail shares via a direct investment with DoubleLine. I hope they change their mind about that before the fund launches. Maybe they are anticipating a relatively low demand? I can't explain it.

Gundlach ups currency risk for first time in five years
By Michelle Abrego 11 Jan, 2016
‘As of [last Tuesday], we bought some global, mostly developed, non-dollar bonds taking some currency risk in our bond fund. For nearly five years we’ve had nearly everything dollar denominated. We think the currency risk will turn a profit,’ he said.
http://citywireselector.com/news/gundlach-ups-currency-risk-for-first-time-in-five-years/a871960?ref=citywire_global_latest_news_list

Reminder
Jeffrey Gundlach Webcast tomorrow 1/12/2016
Mr. Gundlach will be discussing the economy, the markets and his outlook for what he believes may be the best investment strategies and sector allocations 2015.
Tuesday, January 12, 2016
1:15 pm PT/4:15 pm ET/3;15 CT
Click Here to Register
https://event.webcasts.com/starthere.jsp?ei=1084870
From citywire:
‘A little more dovish on the minutes is favorable for non-dollar on the margin,’ Gundlach told Citywire Americas in New York.
And today from a Fed Member
Markets | Mon Jan 11, 2016 9:55pm EST
Fed's Kaplan: four hikes not a sure thing in 2016
Dallas | By Ann Saphir
"This is an unusual start to the year, obviously," Robert Kaplan, the Dallas Fed's new president, told reporters after a talk here.
Concern about slowing growth in China roiled world markets in August and forced the Fed to hold off raising interest rates in September. This year has started off with global markets again rocked by plunges in Chinese stock markets, a fall in the yuan and subsequent heavy intervention by the Chinese authorities to push the yuan back up.
"We went through this in August and September, we paused, we watched, we let events unfold, which is the right way to handle it, and we saw ultimately that underlying economic conditions remained intact and solvent," Kaplan said.
"There's no substitute for time in assessing economic data as it unfolds," Kaplan told reporters.
Kaplan said he is not sure there will be enough economic data before the Fed's next policy meeting in late January to justify raising rates then, but "between now and March I think there will be."
Kaplan's comments differ somewhat from those earlier in the day from Atlanta Fed President Dennis Lockhart, who said there may not be enough data even by March to make a call for raising rates.
http://www.reuters.com/article/us-usa-fed-kaplan-rates-idUSKCN0UQ06N20160112?feedType=RSS&feedName=businessNews

Thanks for sharing David.
Good stuff msf!
I actually think the folks at Whitebox did all they could to articulate their strategies. I never got the impression they wanted their investors to "Just trust us...," like the article suggests. Their conference calls and quarterly letters were straight-forward and insightful, often compelling, seemingly well intended.
Nor were their fees high. They eliminated their loaded share class. Certainly, room to do more, but still, pretty good, relatively.
Their strategies simply did not play out in the last two years, after they decided to "exit the Mr. Market bus."
As we discussed last March, they are in pretty good company.
Keep thinking maybe they were too clever for their own good, something David alluded to in his profile.
Yes, gonna need to get access to principals to better understand how it ultimately unraveled. We did try to get a phone interview for David with Mr. Redleaf, but Whitebox declined.
I'm honestly disappointing they were not more successful.

Think of it this way: You've worked your entire life at a job or a career if you hopped around. Then you're expected to trust your retirement--your golden years--to the stock market--something the best experts on the subject admit is a random walk. If you're lucky you do well as the market is rising when you retire. If you're unlucky and retire during a terrible crash, you're broke or at least struggling. Either way, the situation is largely out of your control. Meanwhile money managers collect their tolls on your assets regardless whether the market rises or falls. It's a heads I win tails you lose scenario.
There is something grotesquely unfair about that for someone who has worked their entire life and just wants now to rest and enjoy their remaining few years. This is why when I hear politicians saying Social Security should be invested in the stock market, I laugh. People are right to distrust Wall Street.
Yet I recognize Sauter has a point in the country we live in. That country is one where there isn't a strong social safety net and interest rates are near 0%. So the stock market is the only game in town. And for most people who don't have the time or ability to find good money managers, index funds are often the best way to go. They are the only way to prevent Wall Street from extracting its pound of flesh from their retirement funds.

FYI: GUS SAUTER: A couple of weeks ago, I went to the barbershop. As he was cutting my hair, my barber said that he believed the stock market was rigged, he didn’t trust it, and he wouldn’t invest in stocks.
Since I spent more than 25 years encouraging people to save and invest, I was disappointed to hear this expression of distrust of investing. More disconcerting is that many people, and perhaps a majority, feel this way. The financial crisis and a number of one-off fraudulent scoundrels have provided fuel for politicians and the media to attack Wall Street and create this feeling of distrust and even anger toward Wall Street.
Regards,
Ted
http://blogs.wsj.com/experts/2016/01/11/why-investors-need-to-stop-distrusting-wall-street/tab/print/

There are both similarities and differences of faults with hedge funds and open end funds. In one sense, you're right about people tending to pile into some funds based on manager past performance.
People piled into Gundlach's funds, even though they use "exotic financial derivatives like total return swaps". (See below.) IMHO use of exotic derivatives has become more commonplace - they're not limited to hedge funds and a few offbeat mutual funds as the article suggested. Though they're still insignificant if not absent from vanilla funds.
People piled into DoubleLine, into Yacktman, and others based on the managers' long term past performance at substantially identical funds. Not on a short term (3 year) record at a fund that was substantially different. RSIVX by design holds longer term, often illiquid bonds, than RPHYX, as opposed short term bonds ("think 30-90 day maturity").
So ISTM there is a qualitative difference between piling into funds like RSIVX (unproven management for that type of fund) or TFCIX or WBMAX (both with untested strategies for open end funds), and piling into proven management and strategies in the hedge fund arena. Another example of a mismatch between strategies and open end funds - stable value funds. There were (as I recall) over a dozen open end stable value funds attempted. They couldn't handle the open end fund daily redemption requirement.
YACKX also floundered for its first couple of years. It was only in 1994, in a relatively flat market, that it began to shine. Yet people stuck with him. Quoting Yacktman: "My only real fear in 1993 was that people who put their money in during 1992 would take it out at a loss. I didn't want this to happen, because I knew my performance would come back. ... As it turned out, more money came in than went out."
With hedge funds, accredited investors have the responsibility (and supposedly the opportunity) of investigating the offering. These "sophisticated" investors don't get the same disclosures as are required of open end funds. If managers have buried past failures, it's up to the investors to discover that.
The mandated disclosures of open end funds are supposed to make it easier for the other 99%. It is their choice to accept or reject a disclosure that discloses little other than: "just trust us".
DoubleLine funds and total return swaps:
Reuters, Nov 16, 2015: RiverNorth/DoubleLine Strategic Income Fund possesses economic exposure to an aggregate of 1,103,373 shares of Common Stock [of FSC] due to certain cash-settled total return swap agreements."

ThinkAdvisor, Nov 22, 2013“It’s [DSEEX] put together using a total-return swap,” Gundlach said of the fixed-income side of the fund.
Probably other funds; this was a quick search.

Hi Guys,
I agree this is not a new finding.
Superior portfolio performance is a rare commodity for individual investors, for mutual funds, for investment categories, and even for the marketplace itself. At some time, usually now rather than later, the iron law of regression-to-the-mean gets enforced.
The referenced article captures that attribute. As Mark Twain observed: “History may not repeat itself, but it rhymes”. Markets change and often change in a supercharged way. Warren Buffett remarked that “The dumbest reason in the world to buy a stock is because it’s going up”. Yet many of us do exactly that.
We love winners and assume their continued winning ways. The odds against that happening are not all that high. Academic and industry studies demonstrate the regression rule time and time again.
The referenced article cautions against being “suckered”. Yet we are strongly motivated to buy last years winners. That’s a failed strategy that seasoned investors understand. Seasoned investors who populate MFO are familiar with the SPIVA scorecards and the Periodic Table studies that show how fragile persistency really is. For the newbies to the MFO site, here are Links to both a representative and recent SPIVA report and a Periodic Table:
http://www.spindices.com/documents/spiva/spiva-us-year-end-2014.pdf
https://investment.prudential.com/util/common/get?file=1D065355D2CC360385257B7D00536F8A
Indeed we are suckers for the hot hand. When searching for new investment opportunities we are often drawn like flies to honey to those stocks and those funds that occupy the top of the returns list.
What these types of scorecards show is that performance persistence is an illusion. The rotation is amazing; the table entries quickly reverse themselves.
Studies consistently demonstrate that the average active mutual fund underperforms its Index benchmark. Further, the average individual investor underperforms the mutual funds that compose his portfolio. We lose returns on several dimensions because of impatience and poor timing.
That’s the sad side of the story that victimizes the general investment public. Hopefully, MFOers are more disciplined and less momentum driven. I suspect that our portfolios contain a higher fraction of Index products, and that we hold them for longer periods. The general mutual fund data suggests that this is happening among both institutional and private investors. Good for all of us; our sucker quotient is decreasing.
EDIT: It's tough posting while watching the pro football games with a cheering group of fans.
Best Wishes.

How many of us avoided market timing in 2007-8 and did not capitulate eventually?

Capitulation is the classicial way to sell low and lock in the paper loss. For those who stand pat and ride it all the way back in 2009 and more in the following years. Market will go up and down. Key here is to stick to an asset allocation that is within your risk tolerance (BobC pointed this out on his past posts).
2016 did not started well but things will settle down as always. Don't think we are coming close to the situation of 2007.

The major averages are still very high compared to March '09. I'm 70+ and very conservatively positioned. Am also taking out 4-8% a year in annual distributions (varies).
Our distributions so far this year came largely from our most conservative income-oriented funds. So, relatively speaking, our small equity positions have increased a bit recently. And as part of annual rebalancing I ended up throwing a few more dollars at PRNEX which has had a horrible year. But, we're talking small amounts here. (Probably raised that fund's allocation by 1-2%. )
No - I wouldn't back up the truck and start buying at these lofty levels. Although if 25 years old again I'd probably be in invested in 1-3 good global allocation funds and out fishing or something. It's all about risk tolerance and time horizon.

@MJG
Your question to me: "By the way, what did you think about the technical parts my posts? I was trying to be helpful."
Technical suggestions and observations are not a problem or concern, in my opinion or for me. I tend to use a mix of fundamental and technical for investing considerations. Although I favor technical indicators more so for price movements that do not lie; I always try to understand how the price numbers arrived at their current standing.
Energy pricing over the past year or so is an almost perfect mix of fundamental and technical. When fracking methods in the U.S. really started to produce, I used this information as a starting view point as to what was going to become of pricing for the major energy products to be had from this process. This "fundamental" view for watching has produced the expected pricing. At the very least, this should have kept investors away from this broad sector, with the exception of those who use inverse investing products for a potential profit.
And yes, I accept the aspect that we here are "trying to be helpful". I am sure there could be many reports over the years from those we never "know about" here at MFO, who have found a better path to their investing from knowledge and thinking that has been obtained from this forum. Without doubt, the investing styles of those who read and/or write at this forum finds many variables.
Obviously, those here who express opinions and/or offers ideas are not "in it" for the money, eh?
Regards,
Catch

Hi Everyone,
I use Powerfunds Portfolios to guide my investing -- Aggressive Portfolio for IRAs (we're about 15 years from retirement) and Conservative Portfolio for college funds (needed in the next 1 to 6 years). I have found them to be quite prescient about what categories will do well going forward, though sometimes a bit early in switching. Last year, the Aggressive Portfolio had a gain of 3%. (Sadly for me, I didn't do as well, with -1.7%. The recommended double oil short DTO was too volatile for me and I passed on it, but it is up 100% over the last year). In 2008, the Aggressive Portfolio was down about -16%, not too bad. The portfolios change every 12 to 18 months.
New recommendations for the portfolios came out yesterday -- check them out at the link above. Basically, in the Aggressive Portfolio, they are recommending ~ 40% in long term bonds, a switch from growth to value, new investments in utilities and Italy, and some shorts in case of a total market meltdown.
lrwilliams