Lower fuel costs stand to hurt Alcoa. Aluminum is an expensive (lightweight) alternative to steel for transportation needs. Expensive to produce. Expensive to work with. That's why Ford's all aluminum F150 is going to struggle. Sure, they'll sell a bunch out of the gate, but it won't be the hit they envisioned until gas gets up over $3. Probably be offering big discounts about the time gas levels off at $1.50 nationwide.
The following article appeared in April, just three months before the plunge in oil began. At that time there were wildly optimistic forecasts the use of aluminum would spread rapidly among auto makers.
"Ford's New Alcoa Connection" (April 2014) http://www.post-gazette.com/auto/2014/04/17/Ford-F-150-Alcoa-Connection/stories/201404170089
It's hard to escape politics in all of this. There are mounting pressures already to ease up on mandated fuel economy standards in coming years.

Derf, I think it's stocks and derivatives such as options, mutual funds, futures, etc.
Again, it's not just the 10 basis point fee, but anyone that understands how management fees can reduce your compounded return will realize how an additional tiny fraction here and there (rebalances and monthly purchases, etc) will reduce your number over the course of years of saving.

Chip's updated Search Tools with ratings data through December 2014.
The update shows 470 Great Owl funds, or about 6 percent of all evaluated. Of these, about 100 are also Honor Roll funds, meaning they are top quintile performers for both risk adjusted and absolute returns.
Some notables:
Akre Focus Instl (AKRIX)
AMG Managers Intermediate Duration Govt (MGIDX)
Artisan International Value Investor (ARTKX)
Guinness Atkinson Global Innovators (IWIRX)
Hennessy Focus Investor (HFCSX)
Janus Triton D (JANIX)
Pear Tree Polaris Fgn Val Sm Cap Instl (QUSIX)
PIMCO Foreign Bond (USD-Hedged) I (PFORX)
PIMCO Intl StksPLUS AR Strat (UsD-Hg) A (PIPAX)
PIMCO StocksPLUS Absolute Return Instl (PSPTX)
PIMCO StocksPLUS Long Duration Instl (PSLDX)
PRIMECAP Odyssey Aggressive Growth (POAGX)
RiverPark Structural Alpha Institutional (RSAIX)
Smead Value Investor (SMVLX)
T. Rowe Price Capital Appreciation (PRWCX)
T. Rowe Price Diversified Sm Cap Growth (PRDSX)
T. Rowe Price Global Technology (PRGTX)
T. Rowe Price Instl Mid-Cap Equity Gr (PMEGX)
T. Rowe Price Instl Small-Cap Stock (TRSSX)
T. Rowe Price New Horizons (PRNHX)
T. Rowe Price Small-Cap Stock (OTCFX)
Tweedy Browne Global Value (TBGVX)
Vanguard Strategic Small-Cap Equity Inv (VSTCX)
Vanguard Struct Large-Cap Eq InstlPlus (VSLPX)
Vanguard Wellesley Income Inv (VWINX)
Vanguard Wellington Inv (VWELX)
Vulcan Value Partners (VVPLX)
Of the 1800 or so surviving funds that have been around 20 years, only about 30 are top quintile across all five evaluation periods (20, 10, 5, 3, and 1 year), yes even in 2014.
Some of them are:
American Century Equity Income Inv (TWEIX)
AMG Managers Intermediate Duration Govt (MGIDX)
Elfun Trusts (ELFNX)
Franklin Mutual Global Discovery Z (MDISX)
Meridian Growth Legacy (MERDX)
PIMCO Foreign Bond (UsD-Hedged) I (PFORX)
T. Rowe Price Capital Appreciation (PRWCX)
T. Rowe Price Small-Cap Stock (OTCFX)
TCW Total Return Bond I (TGLMX)
Tweedy Browne Global Value (TBGVX)
Vanguard Wellesley Income Inv (VWINX)
Vanguard Wellington Inv (VWELX)
A few notable funds on our latest Three Alarm list...Calamos and Royce spending some time in the barrel:
Aegis Value (AVALX)
AMG Managers Brandywine Advs Mid Cap Gr (BWAFX)
Artisan Small Cap Value Investor (ARTVX)
Calamos Focus Growth A (CBCAX)
Calamos Growth A (CVGRX)
Calamos Opportunistic Value A (CVAAX)
Calamos Total Return Bond A (CTRAX)
Davis NY Venture A (NYVTX)
Delafield Fund (DEFIX)
Evermore Global Value A (EVGBX)
FpA Capital (FPPTX)
Greenspring (GRSPX)
Hussman Strategic Growth (HSGFX)
Janus Aspen Overseas Instl (JAIGX)
LKCM Fixed-Income (LKFIX)
Loomis Sayles International Bond A (LSIAX)
MainStay Cornerstone Growth A (KLGAX)
MainStay Growth Allocation A (MGXAX)
Muhlenkamp (MUHLX)
Old Westbury Fixed Income (OWFIX)
Royce Global Value Svc (RIVFX)
Royce Low Priced Stock Svc (RYLPX)
Royce Micro-Cap Invmt (RYOTX)
Royce Premier Invmt (RYPRX)
Royce SMid-Cap Value Svc (RMVSX)
Third Avenue International Value Instl (TAVIX)
Thornburg International Value A (TGVAX)
Valley Forge (VAFGX)
Couple other interesting observations...
Bretton Fund (BRTNX), which David last profiled in June 2013, is a Great Owl.
As are three RiverPark funds, as seen below, all also profiled by David:

David Sherman's RiverPark Short Term High Yield Fund (RPHIX) actually holds distinction of having highest 3-year risk adjusted return of more than 8000 funds evaluated...twice the Sharpe and seven times higher Sortino and Martin than closest competitor. In a league all its own. A GO since eligible, but M* still only gives it one star for reasons discussed in last February's commentary, "Impact of Category On Fund Ratings".
Good progress continues on our MFO Premium Search Tools site, currently in so-called beta or check-out phase. If you are interested in being a beta tester, please drop David a note. Still trying to figure out how we want to roll-out.
If you see anything amiss in latest ratings update, will work to correct soonest. And, feedback always welcome.
Enjoy.
c

I admit I did not read the entire article. That paragraph turned me off to the rest of the writing.
I worry about the definition of rich. Think about this theoretical scenario. MikeM's son graduates from college and lands a good job with a decent salary. His parents have taught him from early on to be a saver and he listened carefully. He maxes out his tax deferred options with the company and has personal accounts where he invests his money. Fast forward twenty or so years and he has done very well thanks to his discipline of saving for the future. But, the government says whoa, hold up there son. You are now rich. So you are going to have to pay some extra fees and whatever. It goes against the idea of personal responsibility.
Meanwhile, the government expands social programs for those that are having a hard time getting by. These programs used to be a way to pull a person or family up until they could get back on their feet. Now they are lifestyle programs. They have been expanded to include more citizens and those who are just living here. That of course drives up costs and the money has to come from somewhere. Enter the rich people.
I have no issues with helping people out but the social programs of today go way beyond that. Consider also that a large percentage of households are now partaking of one or more of these programs. It furthers the balkanization of society. The haves and the have nots. Rich and poor.
We are developing a new class of residents. The government class.

Over the weekend I compiled a few funds that I hope will be complimentary to my equity holdings. Real Estate and commodities were on my list along with a variety of bond funds (LT / ST treasuries, TIPS, and Multi-sector funds). I also wanted to consider some equity sector funds and here I'm considering Utilities, Industrials, Japan, India, and Transportation to perform well this year.
With this, here's are some choices that have outperformed in there respective category over 1,3 and 5 years. They have relatively low ERs and are often available with no transaction fees.
RE - RRREX,
Utilities - GASFX, TOLSX, GLFOX
Commodities - SKSRX, PCRDX
Income - PONDX, FAGIX
TIPS - TIPSX
Japan - HJPNX
India - MINDX
Industrials - FSRFX
LT Treasuries - WHOSX
ST Treasuries - FMEQX

Hi @Joe
We have been in and out of TIPs fund over the past 6 years. Our most common funds (one's readily available to us) have been TIP, FINPX, ACITX, BPRIX and LTPZ. Although our Fidelity brokerage accounts allow just about any TIPs area we would choose to use.
This investment area wanders about, not unlike other bond and equity areas. We do use this area, from time to time, for "cash parking" versus a money market fund. If one desires more flexibility to sell these to move the monies to another area, an etf ( as with TIP ) might prove more valuable.
Also note that not all active managed TIPs funds are equal. Some will hold a variety of short or longer term gov't. TIPs; as well as a mix of other investment grade corp. bonds within a fund or perhaps other Treasury issues. Although most TIPs total returns end with similar results over a long time frame.
Also of note is that the TIPs area, not unlike other U.S. gov't. issues also represent an area during a flight to safety in the markets, to where safe haven monies will travel.
Another circumstance, is that one may discover existing TIPs exposure within many bond funds. So, you may already have enough exposure; unless you choose to invest directly into this area, per your original question.
If you have choices for TIPs within your investment account, I would suggest a review of LTPZ. This fund uses many tools to achieve returns, so this is not a plain jane TIPs fund and will also track long term bond pricing.
For any TIPs funds, take a look at the overall longer term total returns. You will not win the race to short term results, but the returns shouldn't burn down your investment house either.
As per the MFO disclaimer: "Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer."
You could do much worse and holding TIPs depends upon your own philosophy, of course; and how such holdings fit into your own investment plan. Personally, we attempt to not invest less than 5% in a given area, considering that less than this percentage may not have any affect, good or bad; upon an overall portfolio. This doesn't mean that one can not dollar cost average into a position, but this is our own consideration and we generally take a 5% position in one big bite. We also have obtained this 5% position using more than one fund for the total value. The mix and match method. An example would be that we have held as much as 45% of our portfolio in high yield bond funds, using as many as 7 at one time to spread the manager(s) abilities/skills and take the average of results for the total return in this particular.
M* TIPs, active managed Click columns to sort for return by year period, as the list is set by alpha fund name. Note that the variance between these TIPs funds have a return spread for YTD of 2.45% from the best to the worst. "Holy spread", as Robin would express to Batman.
Lastly, most TIPs funds have been a happy area since the beginning of the year. But, this is also the case with many investment grade bond funds. This may not been the case in 3, 6 or 12 months. The markets are fickle, eh ??? Note: We are watching LTPZ, in particular; at this time.
I'm out of coffee and thoughts for the time being.
Take care,
Catch

Hi Joe:
I don't follow the bond markets - so on thin ice here. Why are TIPS lagging (assuming your observation is correct)? Probably the same anti-inflation forces that seem to be hammering many commodities - most notably energy. I looked at PRITX and find it positive in recent years. Certainly ahead of what a money market fund would provide.
I think TIPS or TIPS funds are a decent long-term place to park cash. (This assumes a conservative fund with short-moderate duration.) But I also know that they are grossly misunderstood by many investors. They DO NOT protect you against inflation or potential losses to a bond portfolio during periods of rising rates. What they do do is mitigate the risks of inflation on a bond's value going forward. There's probably not enough experience to know how TIPS funds would fare in the event of sharply rising rates. However, with the "fickleness" of today's investing public, it's likely funds would experience significantly greater losses (due to outflows) than would holders of TIPS purchased directly.
What keeps me from moving my cash at Price to TIPS is the liquidity issue. I like to be able to use cash there to move in and out of other funds. There's a lot less restriction on trading in and out of cash accounts, like TRBUX, than for regular bond funds.

Howdy,
Hank was spot on, as were the others. Real assets can be in the form of equities (i.e. natural resource funds), or the actual commodities themselves, also available in funds and ETFs. The former consists of stocks of companies involved in the commodity, the latter are options and futures and actual stockpiles of the commodity itself. These instruments are traded in different markets very often dancing to different drummers.
Do they track each other? Sure, if the commodity is doing well, the companies involved with it will also do well, and vice versa. However, as an investor, you also need to understand that for various and sundry reasons, they can diverge considerably, particularly in the short run.
Hand also mentioned the cyclicality [love that word, Hank] of the commodity markets. This is a pretty well established historical pattern. They run 12-15 years or so. This is due to their nature - you have to explore, discover, gather, process, deliver . . . oh, and have all your permits. It takes enormous time to bring new resources online and that results in the cyclicality.
When you talk about diversification, in this case it's your portfolio you're considering. Why not consider the diversification of your wealth. About ten years back, I read a quote from the elder Baron Rothschild saying that to protect yourself financially, one should 1/3 of their wealth in securities, 1/3 in real estate, and 1/3 in rare art [define rare art as you wish, but it ain't Beanie Babies.]
When I first read this, I ran my numbers and almost blew chunks. I was 90/8/2. I've worked pretty hard to get it to around 60/30/10 and am still working at it.
Just some ramblings,
and so it goes,
peace,
rono

be careful if you've never ventured in closed end funds before. i've owned JRI since it lost its IPO premium and the price spent years in 16s before it moved up recently. closed end funds have a asset class volatility related to premium/discount movement in addition to the volatility of the underlying leveraged portfolio. so that particular vehicle might not work as intended. unless you have experience with closed-end funds, the open end unleveraged alternative might be better.
separately, i recall you were looking for more tax efficient vehicles, and JRI is the opposite of that.

Yes, you are correct. This type of fund (JRI, NRIAX, etc) would be used in a tax-deferred account. They all look pretty tax inefficient to me.

be careful if you've never ventured in closed end funds before. i've owned JRI since it lost its IPO premium and the price spent years in 16s before it moved up recently. closed end funds have a asset class volatility related to premium/discount movement in addition to the volatility of the underlying leveraged portfolio. so that particular vehicle might not work as intended. unless you have experience with closed-end funds, the open end unleveraged alternative might be better.
separately, i recall you were looking for more tax efficient vehicles, and JRI is the opposite of that.

I consider diversification not only in terms of large cap, small, intl, and bonds, etc but in sectors too. If I had not had my utility funds, reit etf and overweight in health care this past year, my total portfolio returns would have been considerable less. It is easy in hindsight to say if I would have had 100% in the S + P index, I would have had a nice 13% + return, but you never know when the tide is turning and by the time you do, you have likely lost half the runup. I am keeping my allocation to international, emerging market, energy, industrial where it is, who knows, they may be next years winners. I am 65% stocks 35% cash and bonds and will pretty much stay at that allocation.

The concept "Real Assets" is open to widely differing interpretations by different managers. If a manager rode the real estate bull for the past several years, he's looking pretty good today. If he's been heavily into oil, not so good. It's a broad area which might include timber, infrastructure (railways, ports, power generation), farmland, miners or gold bullion. So, you really need to look under the hood and see what you'd be diversifying into.
...
I'm not familiar with the funds you list. But, I known there are a great many out there and that there are profound differences among them.

@willmatt72 I think @hank 's advice here is exactly right. Because "real asset" can mean such a broad swath of things, you need to look under the hood. There are lots of differing funds, each sort of specializing in different areas. NRIAX, for instance, looks a lot different than PRAFX, which is different than FSRRX. They can all certainly act as diversifiers, but you have to know specifically what you want out of them.
NRIAX / JRI 's focus is creating income in areas which could also show capital appreciation and might fight inflation. As such it looks for passthrough income from real assets, specifically from Real Estate and Infrastructure, and in both equities, preferreds, and fixed income. In other words, it has very limited commodity or natural resource exposure. That's also a big part of the reason why it has looked so good recently. Here's a link to NRIAX's info page at Nuveen. They have some good literature on the fund there. In particular, this is what the prospectus says about NRIAX's holdings:

Principal Investment Strategies
Under normal market conditions, the Fund invests at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in securities issued by real asset related companies that are generating income at the time of purchase. Real asset related companies are defined as: (i) companies that are in the energy, telecommunications, utilities or materials sectors; (ii) companies in the real estate or transportation industry groups; (iii) companies, if not in one of these sectors or industries, that (a) derive at least 50% of their revenues or profits from the ownership, management, operation, development, construction, renovation, financing, or sale of real assets, or (b) have at least 50% of the fair market value of their assets invested in real assets; or (iv) pooled investment vehicles that primarily invest in the foregoing companies or that are otherwise designed primarily to provide investment exposure to real assets.
The categories of real assets on which the Fund will focus its investments are infrastructure and real estate. Infrastructure consists of the physical structures and networks upon which the operation, growth and development of a community depends, which include water, sewer, and energy utilities; transportation and communication networks; health care facilities, government accommodations, and other public service facilities; and shipping, timber, steel, alternative energy, and other resources and services necessary for the construction and maintenance of these physical structures and networks.

Depending on the size of your portfolio, your risk tolerance, individual goals, and your comfort level with managing such things, you could just take a global infrastructure fund (GII, GLFOX, TOLSX) and combine it with a REIT index/fund or REIT income fund (FRIOX, LRIOX), and maybe some sort of TIPS or commodity exposure to come up with your own allocation. If the portfolio is smaller, or you want professional management, than something like NRIAX or PRAFX make sense to my mind. In anycase, it makes more sense as an "alternative" to me than liquid alternatives/managed futures/non-traded assets or what have you.

It's a hot potato question. I won't attempt to answer it directly. You pretty much answer the question yourself. Broadening out away from traditional stocks and bonds does diversify you more. But, you can get into some pretty heated discussions as to whether that's advisable. "Deworsification" comes to mind.
A second issue: The concept "Real Assets" is open to widely differing interpretations by different managers. If a manager rode the real estate bull for the past several years, he's looking pretty good today. If he's been heavily into oil, not so good. It's a broad area which might include timber, infrastructure (railways, ports, power generation), farmland, miners or gold bullion. So, you really need to look under the hood and see what you'd be diversifying into.
A third thought here: With investments in raw materials (typical of these funds) you get more "cyclicality." These investments tend to outperform during strong economic times as the need for raw materials rises, and than underperform during a slowing economy. That's neither good nor bad - as long as it's understood.
I'm not familiar with the funds you list. But, I known there are a great many out there and that there are profound differences among them.

Hi,
I have some basic questions on MA.Those of you who use trends and MA in your fund analysis, do you use SMA or EMA ? Also, how many years chart (3/5/from Inception ?) should be used while looking at the trend ?
Thanks,
Mrc

@hank said Only.. if you can stand/afford to loose 15, 25 or 35% on the position (initially) and than smile about it.
Been there,unfortunately.
JANUARY 09 2015 Guggenheim Investments Macro View:
If the mid-80s’ supply-driven oil crisis is a guide, we should expect further declines and a prolonged period where oil prices remain depressed.
Global CIO Commentary by Scott Minerd
"But investors beware in the near-term. Even at $48 per barrel, oil is still a falling knife—I believe there remains another significant downside move. If we hit the $34 a barrel price target, which I believe we could, that would be another 30 percent decline in oil prices. Typically, people would rightly characterize a 30 percent decline as a bear market. We’ve already had a decline of over 55 percent from the high, so we’ve already been in a bear market, but if we started over today we’re going to have another one."
Supply Shock Suggests More Downside Risk for Oil
Over the past 30 years, there have been six major declines in the price of oil (defined as a greater than 50 percent cumulative decline). The current decline now stands at around 55 percent, matching the magnitude of some of the worst historical oil crashes. However, most of the past declines have been due to faltering global demand, whereas the current slump is due to a glut of oil. Therefore, the best comparable decline is that of 1985-86, when a supply shock caused the West Texas Intermediate price to plunge by more than 67 percent over the course of four and a half months. With no near-term signs of supply letting up, oil prices could continue to fall.
http://guggenheimpartners.com/perspectives/macroview/supply-shock-and-awe

Yes, M&A will continue in many areas; as money for such activities is cheap, as well as favorable tax circumstances. Cheaper to buy another's proven progess, rather than start from scratch, eh?
M&A's have been in play for several years with the cheap money and I do not find a reason for any decrease in this area.
However, some public companies today, will go the way of private takeovers.

FYI: China region funds have outperformed the S&P 500 as well as foreign developed and emerging markets funds in the past 10 years.
The average China fund would have turned a $1,000 investment made on Dec. 31, 2004, into $27,979 by Jan. 7 this year, according to Morningstar data. Where would the same investment be in the broad U.S. stock market today?
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg4MjU1MDg=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WEBlv010915.jpg&docId=733972&xmpSource=&width=1000&height=1152&caption=&id=733973

Charles, thank you for your sacrifice, dedication, and professionalism that you have consistently shown MFO since you joined. Your work complements David's wonderfully.
As a former engineer, I am a stats/numbers junkie. Perhaps that's why I so appreciate your compilation of data. But I especially enjoy your ability to post not just the overall risk/return profile for the life of the fund, but also it's 1, 3, 5, and 10 years. Also your risk/return profile over a full market cycle is unmatched by anything I've ever come across.
My question to you, Charles, is how difficult would it be for you to produce the depth of information you have provided in the above example for MAPIX, but for any fund that we input in the risk profile search? I know that is asking a lot of you. But I thoroughly enjoy this extra depth of information. Keep up the great work!
Sincerely,
Mike_E

A couple of thoughts:
1. Buy only what you would be willing to hold if the market closed for 10 years. Or even 5. That's really not a bad way to really filter down to what you consider your best ideas.
2. Buy at a reasonable price. Maybe you don't always get something for cheap, but again with the Buffett quote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." I mean, look at Coke - which I believe was trading at a significantly higher p/e in the late 90's - in 1998 it was $42.50, it's now around $43, with a fairly sizable dip in-between. Of course, people also bought YHOO and MSFT at absurd valuations in the 90's, but there's quite a few less extreme examples and I see a lot of consumer names that are trading at valuations that I consider out-of-whack or at the very least, quite rich.
3. It's difficult for me to buy things that don't have a dividend, but I've made some exceptions recently (Gilead, for example, which I'd like to hope will offer a dividend over the next few years - same with Howard Hughes Corp.) Otherwise, I buy things that interest me (which helps when things are difficult - if I don't care about what the company does, it's difficult for me to have it as a long-term holding) and that - in many cases - have a strong moat, good long-term track record and who have a track record of increasing dividends.

"Let’s say you invested the same amount of money (earning the same 10% annually) in an exchange-traded stock fund for 30 years. You’d be paying 0.10 % annually to hold the fund."
One serious error in this statement, which invalidates his whole logic....do you see it?
I'll give the same example Managed funds Vs. anything you quote and I'll make you more money....
This type of reporting is misleading to many and Dangerous to proper investment thinking.....grade F
But headline got me to read HIS article.....probably their (advertising) intent