@Ted, congratulation to your fund pick - 70%! Unlike the late 90's, many biotech firms are actually producing products cannot be manufactured by traditional drug companies while making good profits. Like you I also invest with T. Rowe Price Health Science and it has doing very well over the last decade.
I tend to shy away from Fidelity sector funds due to the rapid change of fund managers. Many have tenure less than 2 years of experience that implies that is the training ground of young and inexperience managers. If I wish to play in that space I would pick individual stocks similar to what Scott is doing.

I agree on FB. As for Google, I think there is a great deal of potential in a lot of what Google is doing and the Google of 5-10 years from now I think may look very different than the Google of today (nothing against the Google of today, which is a very solid company.) That said, I do think there's a point here where Wall Street is losing patience with Google and the calls for returning money to shareholders via an Apple-like dividend have grown louder.
The other point of interest about Google is that the spread between GOOG (no vote) and GOOGL (voting rights) shares has widened noticeably since the company paid out the price for the spread between the two share classes that was agreed upon after the C class shares were distributed. It was generally around $5, then started widening as the date approached. Now the spread is $20-25 +/-. Kinda interesting.

These funds have their plusses and minuses.
On the plus side, they make donating assets much easier than donating directly to your favorite charity (especially if the charity is small and not set up to handle donations other than cash).
The main benefit IMHO is the ability to time-shift, i.e. donate one year and get the money to your designated charity (or charities) in later years. Good if you want extra deductions up front but want to spread out the actual donations, or if you don't know right now exactly where you want your contributions to go.
A minus is the cost. Typically 60 basis points (T. Rowe Price is 50 basis points). Many people complain about VA wrapper fees, which with these same providers (T. Rowe Price, Fidelity, Vanguard) are well below 60 basis points. So a 60 basis point cost for DAFs is not insignificant.
Another minus is the limited investment options offered for the money in the DAF before it is disbursed to your designated charities.
Disclosure: I have contributed to a DAF.
I liked one of the comments - about donating NUA stock. A similar idea I've been toying with is donating insurance stock obtained via demutualization. (That's when a formerly mutual insurance company converts to a stock company, and as part of that conversion grants stock to its policy holders).
The IRS still claims that the cost basis of this stock is zero. So donating this stock is "better" than donating other stock that you purchased (since that other stock will have a non-zero cost basis and thus less unrealized capital gains to give away). Court rulings are all over the map, ranging from saying that the gain is the full value of the stock to recognizing no gain, to points in between. This muddle is another good reason to consider donating this stock.

Craig Israelsen made a convincing case for cash as a beneficial asset class in a diversified portfolio in this 2007 Article.
In our household, we have an emergency cash fund which earns very little but is very liquid. In our taxable and retirement investment accounts, I try my best to keep a low cash balance, at most 5-10% at any given time, as I am about 20 years from retirement and I want to maximize our wealth creation despite increased volatility. If I have extra cash with no specific target, I dump the funds in my PRWCX position.
As for the question of how many funds to own, we own a total of 9 funds/stocks, but I see no problem with folks who own more funds, as long as they are excellent, relatively low cost and outperform their respective indices. Live and let live. As I will likely die before my fetching wife (not "partner"), I am focused on wealth creation, and I continually remind my wife that there is only one thing worse than being old, and that is being old and poor.
Kevin

Cash is an invest few talk about.

After nearly 35 years of declining interest rates, is it any wonder?
I guess we're all a product of our times. My first mutual fund was a money market fund. A nice cool 20% a year nearly risk free. What's not to like?
I understand where Ted is coming from. But in more volatile markets than we've witnessed recently, cash can also = leverage.

Here is an interesting article on people 100 years and older. There are five times as many women as men in this group:
http://money.usnews.com/money/retirement/articles/2013/01/07/what-people-who-live-to-100-have-in-common

Hi Guys,
A very nice ongoing discussion here. Please allow me to contribute a few thoughts.
The Persistency Scorecard has been a part of the mutual fund industry for many years. In each of its now semi-annual reports, although the specific numbers change, its overarching findings have remained the same. Persistent mutual fund performance in terms of consecutive quartile rankings is an elusive goal.
In large part, what goes up all too often comes down. One exception is that the poorest quartile of funds linger in their desperate positions until they disappear from the scene.
This consist finding opens the manager skill/luck issue once again. As noted in the referenced report: “Demonstrating the ability to outperform repeatedly is the only proven way to differentiate a manager’s luck from skill.” Far too many active managers are failing this test.
I don’t remember the source, but from memory, about 75% of active managers hover near their benchmarks, sometimes generating positive Alpha, sometimes producing negative Alpha. After fees and trading costs, their performance relative to a benchmark is mostly a wash. Roughly 24% of active managers are persistent losers relative to their benchmarks. The residual 1% consistently contribute positive Alpha.
That’s a thin cohort. The trick is to identify these rare souls. But if the fund population is roughly 8,000 strong, that means that maybe 80 such funds exist and are waiting to be discovered.
In general, I like the Persistency Scorecard. But it does have its shortcomings. The Persistency Scorecard is not focusing on the most useful fund selection criteria. Consecutive quartile rankings are not nearly the best sorting tool.
Individual investors are much more interested in cumulative outperformance relative to some benchmark. The single best criterion to satisfy that target is a positive Alpha. And its not single year Alpha. It is positive Alpha over several extended timeframes.
Morningstar provides precisely the requisite data in their Ratings and Risk MPT Statistics section. Morningstar computes Alpha for 3, 5, 10, and 15-year periods using several benchmark comparisons. Alpha is a dynamic parameter and depends on timeframe and comparison standard.
No easy answers here since much depends on your specific portfolio management style and measurement choices. It helps if management has been stable over time and if costs are minimal.
The hunt is to seek positive Alpha scores over multiple timeframes. They exist.
Best Wishes.

Hi and @Ted,
Perhaps. However, I don't process the talent and skills that most of my fund managers have. I learned a long time ago when I worked for an ex college football coach who use to tell me ... find the best possible people you can afford; and, then use thier skills to propel our team. If they can't, then find tallent that can. One of his teams, years back, played for a national title.
Looking back for the past six years, from 2009 through 2014, my portfolio has returned an average of 15.7% per year. I'll gladly take this knowing I paid a sum to those P/M's for their talents in doing this. Know too, since I control the overall asset allocation and when I choose to make changes I can fire anyone of them anytime I choose should they falter or their fund is no longer a fit.
I am happy with what has been achieved. And, with fifty one funds that is some talent pool; and, a lot more talent than I have. For example, when I need a doctor, I don't try to be one, I go and find one that has the skill and knowledge to treat me.
Old_Skeet

@Ted- Seriously, I must be missing something in your argument, which you've repeated many times over the years. What is the fee difference (assuming: 1) all NL, and 2) all of the ERs are within a reasonably narrow range) between $50,000 in one account, or $1000 in 50 accounts?
Thanks- OJ

Hi @ bee,
I feel you know pretty much as to what I am going to write about cash being part of my portfolio’s asset allocation. To me, cash is not trash.
Years back when CD’s could be found in the four to five percent range I kept about ten percent of my portfolio in CD’s and included these in the cash sleeve of my portfolio as FDIC Insured time deposits. In addition, my FDIC Insured savings account balances were also included as time deposits.
Now that interest rates are currently very low, I still have kept these cash sums in the cash area of my portfolio but now draw on them from time-to-time to fund my special investment positions (spiffs) when I engage in them. In essence, instead for drawing interest income from these balances I now draw, most of the time, capital gains derived from the spiffs that have, for now, replaced interest income.
My asset allocation calls for a range in cash form five to twenty five percent with a neutral position being fifteen percent. Currently, it is in the twenty percent range.
Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts that make my portfolio. 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, and the portfolio as a whole 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 distribution needs with the residual being left for new investment opportunity. In addition, most all buy/sell trades settle from, or settle to, the cash area.
Here is how I have my asset allocation currently 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 of the portfolio monthly and make asset weighting adjustments as I feel warranted based upon my assesment of the market, my risk tolerance, cash needs, etc. Currently, I am a heavy in the cash area, light in the income area and neutral in the equity area. I am thinking that once year end mutual fund capital gain distributions are paid out this will reduce the equity area and raise the cash area.
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, PASAX & 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, CFLGX, 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, PGROX, NEWFX, THDAX & THOAX
Large/Mid Cap Sleeve: AGTHX, BWLAX, HWAAX, IACLX, SPECX & VADAX
Small/Mid Cap Sleeve: IIVAX, PCVAX & PMDAX
Specialty Sleeve: CCMAX, LPEFX, SGGDX & TOLLX
Total number of mutual fund investment positions equal fifty one.
I wish all ... "Good Investing."
Old_Skeet

@Sven: You make an excellent point. Biotech Funds have had superior performance for over ten years. I bought FBTCX eighteen months ago and its up 70% over that time frame.
Regards,
Ted
FBTCX Long-Term Performance;
http://performance.morningstar.com/fund/performance-return.action?t=FBTCX&region=usa&culture=en_US

I agree with BobC on the broad points, but have nits to pick with the details.
Broad points:
1. Period-by-period "consistency", a la Bill Miller/Legg Mason Value, doesn't matter. What matters is long term performance.
2. Many (dare I say most, whatever that means :-) ) financial writers are either poor writers, don't understand their subject well, or both.
On that second point, the writer strategically omits mention of bond funds (also included in the S&P report), perhaps because they would undercut her thesis - no persistence of performance.
"Performance persistence levels have tended to be higher among the top-quartile fixed income funds over the past three years ending March 2015." (From the S&P report.) Not surprising, since for bond funds, cost is a huge determinant of performance, much more so than for equity funds.
Details:
1. The source of the material was stated in the second paragraph - S&P Dow Jones Indices’ Persistence Scorecard. (I've linked to the S&P Scorecard.) The research was S&P internal research. Raw data came from CRSP.
2. "Most", unless otherwise stated, may be taken to mean over half. If you look at Exhibit 2, under 1/3 of top quartile domestic funds in 2011 repeated in 2012. Exhibit 1 looks at top quartile funds from 2013; 1/4 or less repeated in 2014.
3. The consistency sought by S&P was for yearly, not quarterly performance. They just started their years in March.
4. The only consistency that one may reasonably expect is that index funds will consistently underperform their benchmarkts. Not by much, but that's the only consistent performance I expect to find anywhere.
5. All classification systems have their limitations; we've been over this ground many times. However, Morningstar and Lipper are irrelevant here, as this is an S&P report, and S&P uses its own classification system.
From S&P's Mutual Fund Guide: "Standard & Poor’s ... analyz[es] fund behavior, then classif[ies] funds into 67 different styles". This is a different methodology from M* and Lipper, in that S&P classifies based more on behaviour than on portfolio.

Not being nitpicky, but the picture of the biotech lab is pretty impressive...
The biotech companies within healthcare sector has been doing well in the last several years, not just 2015.

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/