I did not see what research she used to write this article. "Most" mutual funds could be, what, 51% or 65% or ? This is all stuff we have heard for many years, so it is strange to me that Forbes would bother with the article. I think most of us can agree that domestic index funds provide the broadest coverage for the lowest expenses. Whether an investor chooses to add selected active-share funds is another decision. The shocking truth to the writer may be that there are more than a few active-share funds that have very strong 3 & 5 year records. Frankly, whether the fund lands in the top quartile every year for five years during a strong bull market is of little importance to me. On the other hand, as we already know (old news), there are a lot of crappy funds out there that exist only because marketing arms of fund companies continue to push them. That does not mean there are not some great active-share options. Investors just need to do their homework and accept that a great fund will not likely be in the top of its group every year. Just not possible. Add to that how funds are categorized by Lipper and Morningstar, often in what I think are the wrong asset classes, and rankings and comparisons become more difficult.

FYI: The vast majority of mutual funds have more in common with one-hit wonders than they would want you to know. The shocking truth is that most mutual funds that rank in the top performance quartile one year don’t do it again the next year nor the following year. And no funds stay in the top quartile over five years. Even worse, about a third of mutual funds die or get merged with another after five years.
Regards,
Ted
http://www.forbes.com/sites/trangho/2015/06/23/the-shocking-truth-mutual-funds-dont-want-you-to-know/print/

Great call, Scott, when GILD was below 100. I own THQ also. If you are looking for froth, FBIO (formerly CNDO) and NVAX are Jim McCamant's picks from a while ago that I still have. No dividends, of course.

Thanks! :)
Gilead ultimately didn't make sense to me from a valuation standpoint - basically the valuation had priced in a lot of bad news and basically ignored the pipeline, not to mention management's track record. While it's been frustrating it's finally taken off in the last month.
Additionally, in terms of health care, I think it's just the place to be. As I've said previously, I like to focus on "needs over wants" and healthcare is really a core of that. I think lifestyles unfortunately aren't going to change and as a result, the obesity situation (and all of the conditions that come along with that) are only going to continue to be a large theme. There's also demographics and a number of other tailwinds. I definitely own a lot of healthcare, but I sleep well at night, given that. I said in another thread, I do worry about healthcare costs (which will probably be something like 20% of GDP within 4-5 years) becoming unsustainable, but what are we going to do about it? Probably nothing, given the government's inability to really make progress in just about any important area. So, healthcare spending will continue to crowd out other things.
You also have had a great deal of innovation in biotech in recent years. While I do think some of the binary (has one medicine, does it work yes/no) biotech stocks are expensive, a lot of the larger companies are not.
I've also talked about other companies lately, including CVS (which, given the Target deal, will quickly add another 1660+ locations without having to build them) and Abbott (nutritional products, considerable exposure to EM.) I still like Celgene, which has a ton of collaborations with other various companies.

Celgene is risky and a tad volatile, but I like their considerable focus on collaborations and hopefully they can meet their longer-term projections:
"For adjusted earnings, Celgene raised 2015 guidance to the range of $4.60 to $4.75 per share, although that's below current consensus of $4.84 per share.
In his presentation, Hugin said Celgene expects to meet or exceed previous 2017 guidance, although the company is not raising that forecast at this time. The company still expected net product sales in the $13-14 billion range and adjusted earnings per share of $7.50.
New on Monday morning was financial guidance for 2020. Celgene expects net product sales to reach $20 billion and adjusted earnings per share of $12.50. Both forecasts top current consensus estimates, although the accurancy of estimates five years into the future is always a bit murky."
http://www.thestreet.com/story/13007744/1/celgene-has-2020-vision-for-long-term-growth-but-plays-safe-for-2017.html
Shire, Roche (although I hate the European one div a year instead of quarterly), Abbvie, Teva, Amgen, McKesson, Pfizer and Illumina are other things I've considered, although Illumina would be a tiny, "find it fascinating, just want to have some exposure to it" longer-term play.
In 2012, BOA/ML said: "The fight against obesity will be a major investment trend for the next 25-50 years, a report by Bank of America/Merrill Lynch said on Tuesday, listing 50 companies in areas from healthcare and pharmaceuticals to food and sports that could benefit."
If that's really the case, that's pretty dismaying. I'd like to hope we can be able to change en masse before 25+ years.
As for THQ, I own THQ and HQL. I'll be happy to collect the monthly dividend from THQ which has generally traded with around a 5-6% discount. The company announced a buyback program not that long ago. Not sure where they are with that, but with THQ where it is....

Hi @PRESSmUP
From your article link: "My timing might not be perfect on my rebalancing, but timing the market is not the point. You’ll never get a surefire signal that now is the time to switch from one market to the next. That’s why is makes sense to spread your bets."
>>>Although the article is almost 2 years old, there are numerous valid points for consideration, as noted in the above "rebalancing" statement.
I am sure many of us (here) have some form of rebalancing, in particular; when a portfolio has enough "age" to have accumulated enough monetary mass to be able to be diversified as much as one chooses and that the rebalance is of consequence to positive outcomes. We don't rebalance any portfolio based upon a calendar period.
Rebalancing which causes the most "stress" for this house is what I will call the crossover/glide path period. This is the period when one thinks they have made the proper choice to move money from buckle "A" to bucket "B" and not much happens for a period longer than anticipated.
'Course the worst case scenario could arise when looking for those out of favor areas; and in particular when using something like a relative strength measure from charting.
We do view these and attempt to make notes about such events as too little or too much relative strength. To the low side of this strength pattern is that a "value trap" may be in place, as has been the case for some commodity sectors. One could buy on a "low" indicator and just wait for some action. How long the wait period is the problem, eh?
Our greatest test of rebalancing has been within the past 18-24 months. We have moved away from a bond heavy portfolio and more towards broad and narrow sector equity areas. So far, the intuition for this rebalance has been favorably positive.
Okay, just some rambling.......
Thanks for your contributions here.
Take care,
Catch

Ted....as the link below indicated, and I'm paraphrasing, if you don't hate at least one section of your portfolio, you are most likely not adequately diversified.
http://awealthofcommonsense.com/you-should-hate-some-of-your-investments/
My divi payers are absolutely bringing up the rear YTD...but they lead the charge the last 5 years with about an 18% annual gain.
I am adding to them while they are hated.

"Can't we all just get along?"
Another chart of interest rates since the Constitution was adopted, highlighting max/min points:
http://finance.yahoo.com/blogs/talking-numbers/222-years-interest-history-one-chart-173358843.html
It seems people are nitpicking over the meaning of a word (a sport I too enjoy), while ignoring what I think is a pretty shared understanding of the nature of rates over the past 35 years vs. other time periods.
Another word that people seem to have problems with is "cyclical". With that in mind, take another look at the graph, or sit back and enjoy Blood, Sweat, and Tears take on rates (Spinning Wheel):

FYI: Active fund managers are skilled and, on average, have used their skill to generate about $3.2 million per year. Large cross-sectional differences in skill persist for as long as ten years. Investors recognize this skill and reward it by investing more capital in funds managed by better managers. These funds earn higher aggregate fees, and a strong positive correlation exists between current compensation and future performance.
Regards,
Ted
http://blog.alphaarchitect.com/2015/06/19/surprise-some-active-managers-are-skilled/

Mr. Zweig raises a good point, but the fact is that no matter how hard fee-only planners cajole clients, some insist on opting only for investment management. For those who want a more complete relationship, a retainer fee works very well. Without that, however, there are investors who want someone else to do it for them. The asset-based fee is really the only option. But I also agree that some advisory firms charge way too much for the investment-only work they do. We started using a retainer fee for our planning/investment clients more than 10 years ago, so I find all of this recent harrumphing somewhat silly. Where were these so-called experts years ago?

The past 35 years have in fact been atypical for interest rates, and facts are facts and are not self-contradictory:
CHART
Kevin

>> The past 35 years have been decidedly atypical
I get your point, but this sentence is self-contradicting, whether for interest rates, inflation, various infections, batting averages, mpg, human height, anything.
As for the general Bogle / age / bonds thing, anyone who does so might want to dig deeper into it instead of simply parroting hoary bromides. Was not technically true back when, is not so now, was not so in between.

Hi Guys,
I believe Hank is spot on-target when he recommends that a broadly defined two category portfolio would be more precisely classified equities/fixed income over the equities/bonds designation.
After my initial postings here, I recognized that the “Bonds” descriptor should be expanded to the more comprehensive “Fixed Income” descriptor. To avoid subsequent exchange confusion, I elected not to make that adjustment. That was a mistake; sorry about that.
Portfolio asset allocation is a very nuanced, personal decision. Not only is it personal, it changes over time. One size definitely does not fit all. And, in the investment universe, getting it right is an elusive goal. It is hard to find experts who consistently get it right more often than a fair coin toss.
The CXO Advisory Group tested the accuracy of 68 experts over an extended timeframe. Results were less than impressive. Here is the Link to CXO’s final Guru Grades report:
http://www.cxoadvisory.com/gurus/
The cumulative expert accuracy hovered around the uninspired 47% level for most of the study. Very few of the experts were able to score correct predictions two-thirds of the forecasts. In general, experts are overrated.
Experts continue to disappoint in terms of their financial insights. I recently read a book titled “Wrong” by David H. Freedman. You guys might find it useful. The subtitle of the book is “Why experts keep failing us-And how to know not to trust them”. You might want to give it a try.
H. L. Menchen said: “There is always a well known solution to every human problem-neat, plausible, and wrong”. Far too often, the Gurus tout this wrong pathway.
These days, I prefer investment solutions that feature simple mutual fund portfolios that are Index product heavy. Leonardo da Vinci said it best: “Simplicity is the ultimate sophistication”.
MFOer Hank observed that John Bogle has recently recommended adding Social Security benefits to the fixed income segment of a portfolio’s asset allocation. I agree. I’ve been doing that for many years. I also consider both my and my wife’s corporate retirement benefits as an integral part of our fixed income asset allocation. Given that philosophy, these are substantial additions to our Fixed Income holdings.
Well, the Merriman article triggered some stimulating exchanges from the MFO Board. It was fun and illuminating. Thank you all for participating. I’ve said all I want to say on this matter.
Best Regards.

Sorry, I can't even relate to this question - as posed by Merreman. ... Problem is this: The past 35 years have been decidedly atypical for interest rates (and by association bonds) which, except for only brief respites, have trended continually downward since around 1980 when Fed Chair Paul Volker burst the inflation bubble by ratcheting-up the overnight lending rate to 20%. Making investment allocation decisions at/near market highs is risky. That's true not only for bonds, but for stocks, gold, oil, emerging markets and real estate. So, a healthy dose of skepticism regarding bonds is warranted.
I'd be much more comfortable if Merriman had asked what percentage of one's retirement savings should be in "fixed-income". That's a broader compendium of the (albeit bond) market and would allow, perhaps, greater consideration of short-term bonds, ultra-shorts, cash, foreign currencies, high yield and the like. Certainly, retirees should be in some of these fixed-income assets. For the most part, I'll defer to the fixed-income/allocation people at T. Rowe Price. I suspect their mathematicians and analysists are at least as capable as the good people here at MFO. Unless you have humongous quantities of money to invest, let folks like that make the decision for you under the umbrella of one or more of their allocation funds. They're very good at it. I like TRRIX and RPSIX. On the more aggressive end there's PRWCX which continues to elicit favorable reactions from MFO board participants.
As an aside, I like John Bogle's rule of thumb - but only as a starting point for one's own analysis. He has long advocated having a percentage equivalent to one's age invested in bonds (I'd expand that to the broader "fixed-income" category). And, if my read is correct, Bogle has modified the advice somewhat in recent years, faced with the harsh realities of historically low interest rates. One acquiescence of reality has been his advocating of moving to shorter and shorter bond maturities as rates declined; and the other is his more recent advice to include one's anticipated Social Security income as part of one's bond holdings (effectively reducing one's actual allocation to bonds). The fellow may at times appear rigid and stubborn - but he's not dumb.
---
Footnote: While I don't consider my own allocation decisions necessarily pertinent to the discussion or instructive to others, in the interest of full disclosure here's my latest M* X-Ray (age 70).
Cash 17%
Bonds 28%
U.S. Stocks 31%
Foreign Stocks 12%
Not Classified 13%

Hi MJG,
Thanks for the compliment and the inquiry.
The person that I learned the most from regarding special investment strategies was my late father. I have commented on some of these in prior post. A few I most often use are noted below.
One that has been a family favorite, for a good number years, is a seasonal strategy often referred to as “Sell in May and Stay Away to St. Leger’s Day. Seems to work more times than not. Naturally, I don’t sell out of the markets; but, I do reduce my allocation to equities during the summer months and then scale back upwards towards fall, through the winter months and usually through spring. If things began to fall apart I exit the special position(s).
Another one is to make sure I have a good weighting towards oversold sectors. I strive to maintain at least a five percent weighting in minor sectors of materials, real estate, communication services and utilities. And, in the major sectors of consumer cyclical, financial services, energy, industrials, technology, consumer defensive and healthcare, I strive to maintain at least a nine percent weighting in these (even if they are out of favor). In doing the math this adds up to 83%. This leaves 17% that can be move to sectors where opportunity is perceived to knock. I start with an asset compass to track the assets that I have chosen to follow and invest in. In addition, I use some simple technical analysis indicators such as money flow, relative strength, MACD, slow stochastic and simple moving averages (50 & 200) plus the price action itself along with P/E Ratios and a couple of other things.
Nothing really fancy to write about just some old fashion down home research and deployment of capital when deemed warranted. Think back to my writings as to how I use to bet the dogs many years ago. It was a simple system that worked more times than not. That was to bet three dogs in each race to win, place or show and especially if they were running in lanes two through seven. Often times the dog running in lane one gets pinched into the rail. After doing statistical analysis on which lanes win more often than the others and betting strong dogs when running in them … Well it develops into a clever system type approach.
And, last but not least I feel my investment sleeve system that I have written about in the past has been most beneficial along with selecting quality funds to invest in that have a history of good performance has also played a part to this success.
This is probably not the response you were seeking … but, it is what it is. And, that is a good number of times it comes down to nothing more than “A Scientific Wild Ass Guess.”
Respectfully,
Old_Skeet

I have given annuities a lot of thought recently in my retirement planning. The only that ones that make half way sense are deferred annuities. And there especially the ones where the recent Treasury rule allows you to exempt up to $125,000 in your IRAs from the RMD rule. Still, I just can't see the financial allure of annuities of any stripe or color. Piece of mind and psychological allure I can understand and peace of mind in old age is a powerful motivator. The bottom line with annuities are they seem more of a return of principal gimmick for x amount of years and then after that you better hope you live a long life (real long) to reap some real benefits. But I am always open to differing opinions.
Edit: If anything, maybe suited for a small, very small portion of your retirement nest egg.

FYI: (Scroll & Click On Article Title) The Best Annuities
Fixed-income annuities have never paid out so little, and yet had so much appeal. These annuities, which provide a lifetime of guaranteed income, are paying out 12% less, on average, than in 2011, and 25% less than in 2007. And yet sales jumped 17% last year, to their highest level in five years.
Regards,
Ted
https://www.google.com/#q=The+Best+Annuities+

Excellent. Should be required reading, and I certainly would not be upset if the New Wall Street Week went back to the type of setting that the original had. The backdrop on the new show is distracting. I too, stayed home until Rukeyser was completed. Lived only a few miles from the studio, and some times would run into the panelists while out at a restaurant on Fridays. I thought of them as very special, and learned quite a bit over the years, as these were the days that I was starting to learn about investing.

Actually , as I recall from the period (1990s), AC encountered numerous legal challenges to their stipulation that the money couldn't be touched for a set number of years. In other words, certain investors tried to take the $$ out early (for a myriad of different reasons) and than went to court and fought AC after they declined. I believe some of the plaintiffs were successful. Whether from exhaustion over fighting these challenges, or perhaps based on their own legal research, they threw in the towel.
A great idea in concept. Leave the money alone and let the managers run the fund for the long term. Go fishing or whatever - and stop reading or viewing the financial press for 10-20 years. (The "Rip Vanwinkle" approach to investing). For whatever reason, the public's attitudes changed. It's possible, too, that AC screwed up in their execution of the fund's investment mandate. But my guess is the downfall was more related to changing investor behaviors and the legal challenges mentioned.
-
Here AC discusses a (new) 2005 Missouri law (their home state) that affected/altered the status of gift-trust accounts: https://www.americancentury.com/content/americancentury/direct/en/investment-products/mutual-funds/giftrust/trust-law-information.html
Here owners and former owners vent their frustrations with the fund - particularly their difficulties withdrawing money. While I can't vouch for the accuracy of any of these complaints, they do provide a sense of some of the issues that arose: http://www.consumeraffairs.com/finance/american_century.html

In theory the idea sounds good but if I wanted to go that route I would want a choice as to where the money was going. A simple approach would be a index fund for example.
AC had some hot funds in those days. I was in Ultra. Those funds attracted a ton of money afterwards as the investing magazines hyped them up. Growing pains put a lot of strain on the company as they were behind on hiring help from what I understand.
As for the Giftrust fiasco, I'm not a lawyer but opening up that fund to new investors who could move in and out while locking in those who invested in the original idea should have voided the contract between the investor and AC. Giftrust was a very focused fund in the small cap arena. It might have been prudent for them to close it but they didn't.
I have invested with AC now for 29 years. I've never had any issue with them but the Giftrust situation tells us all that buyer beware is always a good thing even with a brand you are loyal to.

We have had many discussions recently about retirement planning (thanks Dex) I sense most, if not all of us including me, tend to far overestimate their longevity. Obviously that optimism is warranted less we outlive our nest egg and the consequences thereof. But the other side of the coin also has drawbacks primarily dying too rich and not fully enjoying the fruits of our labor over a lifetime of investing. Longevity tables tell us that the first wave of baby boomers should expect to live to around 85/86. But I have my doubts about that statistic. I know a lot of widows and females in my neighborhood who are in their mid 80s+ but not one widower or male. I am just curious if any males who actively follow this board are over 85. I know Ron and MJG are around 81 but can't recall anyone much older. Maybe a stupid question so just humor me.
Edit: I don't mean to imply that there aren't any of us males around over 85. Just few and far between.

@Ted, M* says $10,000 become $35,280 in 10 years with VGHCX so you should probably send the bill for 2 dinners!