Maybe, maybe not. I'm choosing equal weight index funds and VMVFX for my future investments. I suspect I'll be reasonably satisfied in 20 years.

While I tried to make sense of this link, it seems to say that the "market" is reliant on the "bigger fool" hypothesis for further highs. I'm trying to decide if I should sell my value buys even if they are under water.
OTOH, VHCOX and VPMAX are positive for the year, and it's difficult to justify taking profits (scant, but real) there.The stocks made sense when I bought them, so they may be good in five years.
Since I'm 3 to 4 years from retirement, guess I'll sit, wait for a 10% drop, put in 50% of my cash when it happens, and decide if I like beans and rice if the market doesn't respond in 3 years.

Ya see, 'cause Royce European Smaller Companies (RISCX) could easily be mistaken for a fund that invests in kumquats, Chinese real estate, or three person Greek start-ups with $20 billion market caps (hey! it could happen) or huge companies that simply aren't mega-massive huge. Calling it Royce European Small Cap relieves all of those concerns.
With nine of Royce's 22 funds firmly in the "financially unsustainable" range ($75 million or less after 3-10 years in operation), something needs to change. I'm not sure it's always the name. RISCX been around nine years and has drawn $22 million. Odd that no comparable clarification is forthcoming for the $900 million Smaller-Companies Growth Fund (RYVPX).
David

FYI: How much time do we left in this here bull market?
Regards,
Ted
http://thereformedbroker.com/2015/06/10/two-more-years-of-bull/

FYI: Midcap stock mutual funds catch companies in their teenage to young-adult years. They've survived early small-cap challenges, but still can have impressive earnings growth. So in a real sense midcap stock mutual funds get the best of both large- and small-cap stock worlds.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTk2MzEyODQ=
Enlarged Graphic:
http://news.investors.com/photopopup.aspx?path=WEBlv061015.jpg&docId=756596&xmpSource=&width=1000&height=1198&caption=&id=756507

@MJG: There is nothing on the web, I checked, that indicates John Waggoner is leaving USA Today. I have linked his article for over fifteen years.
Regards,
Ted

401-k recently announced that ACRNX would be removed from plan & replaced. I gave up on it a few years back as I was cutting equity % age.
Derf

Are you taking price inflation into account?
Yes - I have a line item budget for the above years.
I seem to have too much month at the end of the pension check, especially as I pick up the growing costs of my healthcare.
Are your yearly decreases due to reduction in debt or some other costs that "falls off" over time?
No - just spending pattern.
Do you plan on staying away from younger women with needs, financial needs specifically?
No - they are paying their way now. They might have to pay me later.

.......................................

Hi Dex,
I’m still waiting your response to the fair questions I asked. Why do you doubt that Tom Lauricella learned during his long tenure at the WSJ?
I believe anyone learns something every single day whether he intends to or not. I also believe we likely unlearn something everyday although we don’t like to admit our misunderstandings. I see no reason to suspect that Lauricella is so unique that he avoids these learning experiences.
Rather than defending your position, you deploy the debate loser’s tactic of attacking an opponent’s position. That’s an easy task to refute in this instance.
Even the subtitle of the piece notes that “My last bit of advice: Keep the strategy simple, and the costs low”. That’s a lesson learned.
Simply look at the headlines displayed below the title. All three are examples of lessons he learned over the years.
Just about every paragraph in the article recalls some other lessons learned. He talked about the market timing scandal. He reminisced about how “… high-paid stock-fund managers, who have since struggled to post better returns than simple, low-cost index funds” have failed to better serve the investing public. He later recalled the 130/30 mutual fund debacle. These were all learning experiences.
Lauricella concluded with “…. the focus is really on long-term investing. Hopefully this column had the same message.” That too was a learning experience since both earlier investors and financial writers often concentrated on short-term results rather than long-term process consistency.
The two articles that I referenced also demonstrate that, like most of us, Tom Lauricella is a learning machine with almost daily adjustments.
Look, Tom Lauricella was making a final address to the troops in his closure article. In any concluding ceremony, it deserves the respect, the goodwill, and the common courtesy usually accorded to anyone trying to be helpful.
Please explain why you so dislike Tom Lauricella’s writings. They seemed fair and open-minded to me. I’m always anxious to learn. I suspect you are too.
In the investment marketplace, a disagreement is no clarion call for undocumented and uncivil condemnation. It’s reasonable to take opposite sides of the trade and still be friendly and even cordial.
Best Wishes.

Hi Dex,
Well I suppose your one-liner, gratuitous comment is calculated to secure some attention. But it falls miserably short if it is designed to inspire a consensus.

Hi yourself,
Please list from the OP article what he learned over the last 14 years and we can have a discussion.

Hi Guys,
Thank you all for facilitating this controversy on income growth and distribution. It is a centuries-old debate that does have a direct impact on our economy, and by easy extension to our marketplace.
Like most of us, I would prefer a more balanced income distribution for individuals or for families, or for whatever measure you wish to impose. The wealth distribution is a perennial problem with the capitalistic system. There will always be winners, but losers are also guaranteed.
I sure don’t have an answer; but neither does anyone else. We are swamped with experimental programs and ideas. Similarly we are overwhelmed with a tsunami of data. Interpreting this data is one challenge, but a zero-order issue is to present this data in an understandable, absorbable format.
Historical charts are a partial solution. Your posts motivated me to seek such charts. Here is a Link to a series that captures the many dimensions of income issues:
http://www.russellsage.org/sites/all/files/chartbook/Income and Earnings.pdf
This chartbook of 11 pages was assembled by the Russell Sage Foundation (RSF) so an agenda is suspect. But the data is credited to the U.S. Census Bureau so it should be as reliable as such data can be made.
These charts slice and dice the real income data into many categories and present both median and mean statistics over time. The data is subdivided by sex and race also.
The reference is made without commentary by RSF (which does have a viewpoint) for a purpose. You get to examine this historical record without RSF influence. Please have at it.
One obvious observation is that inequalities exist. It’s another matter entirely to judge whether these inequalities are warranted or not. Over many years the bottommost rung on the pay scale has remained relatively income flat when adjusted for inflation, while the upper rungs have gained substantially in income. Those are the facts.
These charts are terrific summaries. Have fun with the data. Please don’t shoot the messenger.
Best Wishes.

FYI: (Sorry to see him go, Tom is an outstanding financial writer !)
Regards,
Ted
http://www.wsj.com/articles/what-i-learned-in-14-years-on-the-funds-beat-1433537708

" 29 percent of such households don’t have a pension."
What is surprising is that 71% do have a pension.

If I read the article correctly, I think it claims 29% of the 50% that don't have retirement savings also don't have pensions. The percentage of all households that don't have a pension could be even higher.

Yes, that is what I'm surprised about. 71% of those that don't have retirement savings have a pension. I think that number will decrease over the years.
If a person is 55 now and they started working at 20 - that was 1980. 401Ks started to become popular then and pensions were not.

@ Dex posted "Earlier this week, the ECB chief stoked a rout in bonds after he told investors Wednesday to “get used to periods of higher volatility,”
Adding to that perception:Market Perspectives from Acropolis Posted on June 5, 2015 by David Ott
"Naturally, I headed over to our bond guys, Ryan and Cliff to see what they thought. Ryan flatly said, ‘Dave, we’re just watching volatility.’ He is absolutely right.
The chart above shows the yields on a year-to-date basis and from that perspective, yields are high. If we, as Sherlock Holmes says, widen our gaze, to one year, we can see that, in this context, yields are off of their lows but still not particularly high.....
We can see that there are wide differences between the highs and the lows, which gets back to Ryan’s point – bond yields have been volatile, but, really, there’s not much to see here.
...Of course, we’ll have to see where things go from here, but it’s far, far too soon to say that these are the higher interest rates we’ve been waiting for over the past six or eight years."
http://acrinv.com/interest-rates-rising/

In 2000, fund giant Vanguard Group introduced what it calls its Admiral class of shares as a way of rewarding loyal investors. Shareholders who held $150,000 for at least three years or $50,000 for at least 10 years were bumped up into the Admiral class by Vanguard. That gave them an immediate reward of annual fees that were as much as one-third lower than normal.
Today, $1.1 trillion, or fully 36% of Vanguard’s total assets, is in Admiral shares. As the firm’s assets have grown, the Admiral requirements have fallen: Anyone with at least $10,000 in an index fund or $50,000 in an actively managed fund qualifies, regardless of tenure. Fidelity Investments also offers shares with lower expenses to investors who keep a minimum of $10,000 in a fund.
You might think many other mutual-fund companies would have followed suit. But Admiral never aroused any “chatter or controversy or envy or emulation,” says a Vanguard executive who was involved in the launch. Several fund-industry experts say they aren’t aware of other firms that have done anything similar.

That is a good way to award your investors. Also their fees continue to drop as the asset grow. How many fund family can honestly give you that? No wonder investors are moving their asset elsewhere.

FYI: The good news is that Americans are living longer and spending more years in retirement than ever before. However, funding retirement is a fast approaching crisis. On this week’s WEALTHTRACK we have an exclusive interview with Financial Thought Leader and legendary investment consultant, Charles Ellis, who tackles America’s greatest domestic financial challenge in a new book, Falling Short: The Coming Retirement Crisis and What To Do About It.
Regards,
Ted
http://wealthtrack.com/recent-programs/ellis-fixing-the-retirement-crisis/
M*: 2015 Fee Study: Investors Are Driving Expense Ratios Down: (This is a relink in case you missed it the first time.)
http://wealthtrack.com/wp-content/uploads/2015/06/2015_fee_study.pdf

No, sir. Geist and Ende were the outliers at FPA for years. While the rest of FPA were hard-core absolute value guys, G&E ran splendid small to mid cap growth funds, fully invested in very high-quality companies, negligible turnover, drifted between small and mid, growth and blend. Returns were consistent and solid.
The funds were F P A Paramount (FPRAX), F P A Perennial (FPPFX) and the closed-end Source Capital (SOR), and they were pretty much clones. F P A decided, about a year ago, for whatever reason, to take FPRAX from the guys and convert it to a global all-cap absolute value fund. Now FPPFX is becoming the U S version of Paramount, it seems.
But ... Geist did retire in 2014 and Ende, at age 70, is moving toward the door. Greg Herr, more of a Romick-type guy, was added to the team several years ago, presumably in anticipation of the transition.
Two reasons to sell:
1. the new fund will likely have nothing in common with the old. If you had a reason for buying Perennial before, it's gone now.
2. the tax hit will be substantial. Morningstar calculates your potential capital gains exposure at 63%, that is, 63% of the fund's NAV is a result of so far untaxed capital gains. If the portfolio is liquidated, you could see up to $36/share in taxable distributions. During the Paramount transition, the fund paid out about 40% of its NAV in taxable gains including two large distributions in two weeks.
Certainly the tax hit will vary based on your cost basis, but my as-yet uninformed guess is that if your cost basis is high - $35/share or more - you might be better getting out before the big tax hit comes.
But, really, I'm not a tax guy. That's just a superficial take on it.
David

"The challenge of asset allocation now is no longer having too few ingredients to consider but rather selecting among an ever increasing array of sector-specific mutual funds and exotic ETFs"
A Seven Asset Portfolio out performed all other asset allocations, both prior to and during retirement.
This would consist of:
-large-cap U.S. stock
-small-cap U.S. stock
-non-U.S. developed-market stock
-real estate
-commodities
-U.S. bonds
-cash
-in equal proportions, rebalanced annually.

and,
"The second part of this analysis compares three allocation models when used in a retirement portfolio — which is very sensitive to timing of returns, particularly large losses. This analysis assumed an initial nest egg balance of $250,000 — quite comfortable back in 1970, although fairly modest now — with an initial withdrawal rate of 5% (or $12,500 in year one) and an annual cost of living adjustment of 3%. Thus, the second-year withdrawal was 3% larger (or $12,875), and so on each year. The superior approach, however — with a median ending balance of over $2.1 million — is the model using seven different asset classes."


For retirees facing the future headwinds of rising rates this study found that:
-during the inflationary periods of the 1970s, the seven-asset model had considerably better performance as a retirement portfolio — finishing with a balance of $2,086,863 for the 1970 to 1994 period, while the 60/40 model ended up at $1,090,081. The pattern recurs in the first four 25-year periods.
-an asset allocation model that has a large commitment to U.S. bonds (such as the classic 60/40 portfolio) may be at risk because if interest rates rise, bond returns will likely be far lower than over the past three decades.
-that a more broadly diversified portfolio is prudent — both in the accumulation years and in the retirement years.
Source:
which-asset-allocation-mix-outperforms?

http://www.sec.gov/Archives/edgar/data/313212/000031321215000150/485a.htm
Launches at the end of August. The manager hasn't really run a fund before, but has been managing some sort of TRP portfolio for the past five years.
Not a terribly informative prospectus, though perhaps an interesting idea. There are four or five open-end funds that bear the "emerging market value" label, mostly so-so or weaker. Andrew Foster made the interesting argument a while ago that value investing mostly didn't work in the emerging markets because there was, in a world of interlocking directorships and chaebols, such a limited prospect for value ever to be unlocked. Andrew suspected that the EM were maturing enough that corporations might feel more inclined to be responsive to shareholders, which might usher in an era of successful EM value investing.
For what interest that holds,
David

Hi BobC,
Thank you so much for responding to MFOer Davidrmoran’s questions with regard to the whys of your near-term cash portfolio asset allocation policy. Your explanations are clearly and understandably presented.
But you did not address the question of why you decided that a 3 to 5-year war-kiddy reserve is the favored approach for most of your customers. How was that reserve time-span determined?
Is it close to the historical average time length of a Bear market? Is it tied to the psychological behavior or biases of your clientele? I appreciate that it is a conservative approach that over the stated 30-year period of your business has been attractive to your customers. Congratulations on preserving their loyalty. It demonstrates that you are doing something right for them.
But that conservative approach is leaving much end wealth on the table. How happy would your clients be if they recognized that their end wealth could have been substantially higher without compromising their portfolio survival odds?
Let’s do a simple illustration over the lifetime of your advisory organization. I’ll use the Portfolio Vizualizer website option titled “Backtest Portfolio”. Since your firm has counseled investors for 30 years, I’ll imagine two starting portfolios in 1984 with one thousand dollars each and not touched through 2014. Portfolio Visualizer will effortlessly calculate the end wealth of each portfolio.
Like in the earlier Monte Carlo simulations, let’s assume a 40/10/30/20 mix of US Equities, International Equities, Bonds, and Cash, respectively as a baseline. That could be representative of a portfolio that your clients might find acceptable based on a 4-year cash reserve recommendation from you.
By way of comparison, let’s switch some of that cash into a Bond holding to reflect a 2-year reserve allocation. In that instance, the mix is 40/10/40/10. Both portfolios are a 50/50 equity/fixed income asset allocation.
What is the end value after 30 years of these two portfolio options?
The end value for the 4-year protective cash option is $12,793. The end value for the 2-year protective cash option is $14,120. That’s for every one thousand dollars invested in 1984. That’s roughly a 14 percent penalty.
The 2-year reserve cash portfolio does marginally increase portfolio volatility from 9.51% to 9.68%. However, during that period, the Worst year was a negative 17.39% and it was registered by the 4-year cash reserve portfolio. Go figure!
That’s a lot of money that you are asking your clients to sacrifice for “perceived” safety. I say “perceived” because the Monte Carlo analyses hint that the 4-year reserves portfolio is slightly more likely for bankruptcy. From an end wealth perspective, the 4-year option is an opportunity cost.
I like Short Term Corporate Bonds as a near-term alternative to cash. Using those to substitute for the 10% cash case generates an end wealth of $15,016 for every one thousands dollars invested in 1984. It does introduce a little more risk.
Let’s test the results for timeframes shorter than 30 years. The number magnitudes and percentages change, but the relative rankings of the three options examined do not change if the investment period is shortened to the recent 20 years nor for the current 10 year period. The 4-year reserve cash option comes at an opportunity cost.
There is a reduced end wealth price to be paid for keeping excess reserves in cash. That’s one reason why active mutual funds maintain a low cash allocation unless some downturn is projected.
I’m sure you access a back-testing tool similar to the one I used at Portfolio Visualizer. I’m equally sure that you generate these type of tradeoff studies for your customers to allow them to make an allocation decision. One size does not fit all clients well, especially given the many factors that influence a final asset allocation decision.
By the way, it took me ten times the effort to report these results than to actually do the calculations.
Best Wishes.