FYI: Look around you: This is the time of year when the pages of newspapers and magazines are filled with predictions and lists and all manner of money-losing nonsense. I have pushed back against much of this silliness in these pages over the years.
Regards,
Ted
http://www.ritholtz.com/blog/2014/12/the-basic-simple-truths-of-investing/print/

>> not many funds have beaten the SP500 3% annualized for the past 20 years.
Correct, not many, though you mean 19y, right?
FLPSX is one. There may be some Vanguard likewise.
One thing that is interesting is that it began its 08-09 dive a full year prior, oddly. It is since the bottom (spring 09) that it has raced past everyone. Even FLVCX, amazingly. But that is only 5.5y.

Here's some decent Vanguard information by another Market watch writer: FWIW...tb
“Quietly, Vanguard’s actively run funds have outperformed their more-famous index siblings,” said Morningstar researcher John Rekenthaler in a recent column, pointing to returns over the past 15 years. That’s a particularly striking result, since in general, most active funds aren’t able to beat their benchmarks consistently.
What’s Vanguard’s secret to success? It includes making sure its active funds are low-cost, as well as outsourcing the stock-picking to fund managers who go through an extensive screening process.
“We think we have a very good process for selecting managers,” Vanguard CEO Bill McNabb told MarketWatch. He also said: “If you’re going to take active risk, your best chance of preserving any outperformance is to have a low-cost portfolio.”

That's Paul's V. selections...not the best but probably passable for non Vanguard investors to mull over
I would have a different selection (after 30+years of excellent gains with vanguard) My wife(who could caresless) picks her favorites and makes her 8% every year (Avg)
So maybe he is an "expert"....but....

Hi again NumbersGal. Eye watering numbers...tears of joy long term and across full cycles, tears of pain during drawdowns...more severe than the annualized numbers show. But I suspect not many funds have beaten the SP500 3% annualized for the past 20 years. FWIW.
Hope all is well.
c

"9. A couple of times per decade, investors forget that recessions happen a couple of times per decade. "
People wanted to forget any lessons from 2008 early in 2009 and just wanted to reboot things to a few years prior ASAP.
Rather than trying to fix the problems that got us to that point, we quickly embarked on the easiest monetary policy ever, aspects of which are still in place almost several years later.
Here's a rule: People will choose easy solutions that aren't sustainable over difficult decisions that lead to a sustainable recovery.
If faced with the idea of having to learn lessons not to repeat history (economic or otherwise), people are like this:

From the article (talking about not changing the name of the "Mutual Fund Store"):
"I look at this almost like AT&T — it's American Telephone & Telegraph — it's been years since there has been a telegraph in the United States”
It's been 20 years since the company was called American Telephone & Telegraph - the company rebranded itself as AT&T in 1994, memorializing its termination of telegraph service in 1991.
It seems all we've got these days is an alphabet soup of company names standing for nothing.

FYI: Though it’s easy to find a stock fund that beat the S&P 500 index, even over periods of 10 years or longer, buying such a fund seldom results in continued outperformance. But I’m going to tell you about a mutual fund that’s different. Let’s call it “Fund X” for now and later I’ll do the big reveal on the fund and toss in a key lesson.
Regards,
Ted
http://blogs.wsj.com/totalreturn/2014/12/23/a-fund-that-trounces-the-sp-500/tab/print/?mg=blogs-wsj&url=http%3A%2F%2Fblogs.wsj.com%2Ftotalreturn%2F2014%2F12%2F23%2Fa-fund-that-trounces-the-sp-500%2Ftab%2Fprint&fpid=2,121
M* Snapshot Of VTSMX: http://quotes.morningstar.com/fund/vtsmx/f?t=VTSMX
Lipper Snapshot Of VTSMX: http://www.marketwatch.com/investing/fund/vtsmx
VTSMX vs. VFINX: http://www.marketwatch.com/tools/mutual-fund/compare?Tickers=VTSMX+VFINX&Compare=Returns

Howdy Doc,
I'm with Mark. I still accumulate but speculating in this market in the near term is borderline suicidal Recall that historically, commodity bull markets range from 13-15 years. The bull market in gold has been running since 2002 [rono scrambles to get his calculator . . . . figger, figger, figger . . . yup, it's been a great run, TYVM.] However, it really doesn't look that promising a place to play for speculation.
peace,
rono

Hi Pop Tart,
In the LCG space, I prefer POGRX, which continues to produce with a relatively low expense ratio. The Primecap team has produced awesome results over the years at their funds: VPCCX, VPMCX, POAGX, POSKX and POGRX. Unfortunately, only the last two funds are open to new investors. We continue to own a 10% position in POAGX.
Kevin

Thanks Mark & Ted. Contrafund has been a core holding of mine for years, I'm just curious about other options as well.
Thanks for the link Ted. I saw this link on your Contrafund post earlier today, which got me thinking about BRLGX.
Happy Holidays to both of you!

Bob, thanks for your comments.
Regarding TIAA - I realize you're talking about the fixed portion (TIAA traditional) - the TIAA portion also includes some variable options like TREA as well. The 10 year annuitization requirement is an issue, but strikes me as an apples and oranges comparison. TIAA Traditional is (primarily) available in employer-sponsored plans, while the other plans you mentioned (Schwab, Jeff Nat, etc.) are retail plans.
I think a more accurate comparison would use TIAA-CREF's after tax product, Intelligent VA. That doesn't offer TIAA Traditional, just as the other plans named don't offer a useful stable value alternative. Thus no issue with 10 year annuitization.
Over the long term, the fee on Jeff Nat for a $100K account may be higher than TIAA-CREF's. (TIAA-CREF charges 0.35% for ten years, then 0.10%.) But I do agree they're in the same ballpark, and significantly lower than the annuity fee of the other providers.
Statements really are a problem with TIAA. At least when they produce them. It turns out that for their brokerage accounts, they don't generate 5498s if there have been no contributions, even if the account has RMDs.
They fault Pershing for this, and I think they may be right - I took a look back at my old Vanguard IRAs; back when it still used Pershing (before about 2010) I did not seem to get 5498s. Now I do.
As you wrote, nothing is perfect.

Do not own this but have considered.....and glad we did not.
VILLX was near the top of the moderate/balanced pile for several years and took a wrong turn somewhere this year. A -3.17% YTD. Bark, bark, bark.....
M* performance link

@expatsp. Me too with BB. FAAFX a drag. WBMIX did not help either...neither did SIGIX, although it at least nicely beat in its category, as is usual for Mr. Foster.
One day the Great Pumpkin will come to we loyal investors in FAAFX =).
Fortunately, DODGX, did well. I remain fully invested (thanks for AKAFlack) versus DODGX/DODIX split...and will stay so as long as 10-mo SMA is positive.
And, had couple individual stocks that have done well. Thanks to Ted for helping me double down on BAC. Ditto to Scott wrt/OAK. AA and HCP also had good years.
Honestly, thanks to all the support and guidance I get from the board.
To 2015...a new season.
Go Yanks!
c

@Charles: Thanks for sharing your (relative) pain, I too am way behind the S&P this year after a few years outperforming. Fairholme hit me hard, and great performance from Primecap and decent performance from Bridgeway (my other two big positions) weren't enough to compensate. My foreign funds (ARTKX, SFGIX, GPIOX) outpeformed their benchmarks but underperformed, of course, the S&P.
Getting back to this general topic, I intend to remain close to fully invested in equities. The economy seems to be picking up speed, not slowing down, so I don't see any reason for a bear market any time soon. And as to the inevitable 5-10% corrections, I've learned that I'm not smart enough to time those, though I do have a little dry powder just in case some bargains appear.

Thanks for posting this, Ted, it makes me even more likely to put some money into their ETFs in the coming years, especially SCHD.

FWIW, a relative took the injections about 5 years ago for Hep C. Super lucky to have very few side effects. All new oral drugs are much better. If patient is not suitable for Abbvie, doctor can request Harvoni. Best wishes for the uncle.

Hi Guys,
Charles’ recent “Irrational Markets - Proof Positive” post prompted me to initiate this topic. That discussion highlighted the discordant opinions and recommendations made by supposedly financial and investment experts. The cacophony is loud, endless, and often much less than useful. Chaotic investing is a likely outcome.
The Charles post emphasized the mind-bending character of old wisdom saws like “Out of the mouths of babes comes wise insights, yet, only with age comes wisdom”.
If the latter is true, I have accumulated much wisdom. I guess you should seek investment advice from either young Wharton business school graduates or perhaps from older, more senior graduates. I listen to both, but weight them differently.
For many years, an industry agreement seemed to have been reached with regard to an acceptable retirement portfolio drawdown rate. Portfolio survival for an extended retirement period is the obvious goal.
These earlier studies mostly suggested something approaching a 50/50 mix of equity and fixed income holdings. High portfolio survival rates were estimated when withdrawal rates were limited to roughly 4% per year adjusted for inflation. The original work in this arena was done at Trinity University in 1998 and has been frequently updated.
Here is a Link to one readable update written by Wade Pfau in 2010:
http://wpfau.blogspot.com/2010/10/trinity-study-retirement-withdrawal.html
The Pfau analysis didn’t much change the earlier study findings. However, some concern over the current overpriced marketplace, coupled with a very low interest rate environment, has persuaded a few gurus to shorten the recommended drawdown schedule from the standard 4% rule-of-thumb to an even lower 3% annually.
Now for the controversial analysis and recommendation that wants to upset this comfortable apple cart. It will surely add to Charles’ distress over conflicting and competing financial advice. That’ll never change.
It is a retirement study from the Director of Research at the Putnam Institute. Here is the Link to this cart upsetting 16-page, 2011 release:
https://www.putnam.com/literature/pdf/PI001.pdf
Please give it a road test. It merges portfolio returns uncertainty with life expectancy probabilities for both men and women separately. The methodology deploys a novel Retirement Present Value (RPV) model to project portfolio survival likelihoods.
The RPV’s surprising and controversial output is that the retirement portfolio that offers the best survival prospects includes a much smaller fraction of equity holdings than does the original Trinity study and other follow-up Monte Carlo analyses. Check it out; controversy is good.
Personally, I’m not comfortable with the Putnam work product. The manner in which the “optimum” portfolio equity/fixed income mix was determined escapes me. Certainly a portfolio with only a single Index-like equity position is retirement dangerous because of its volatility (standard deviation). But fixed income is likely more dangerous because of muted annual returns.
The standing answer has been broad portfolio diversification that trades off a little annual return for a major decrease in overall volatility. Outcomes are definitely timeframe dependent, but I still trust this generic and time-tested approach.
You get to choose your own poison. My head spins off-axis as often as Charles’ does. Let MFO members know your thinking on this matter.
Best Regards and Happy Holidays.

I have no issue with people who have all manner of strategies. I'm a believer in "do what works for you."
Personally, I've turned into much more of a "buy and hold" investor in the last few years from the standpoint of it's just not very enjoyable to me to have to frequently rebalance and tweak.
There may be some variation in the desired holding periods for me, ranging from multi-decade (railroads fall within this, as well as some other things including Archer Daniels, International Flavors and Fragrances and Jardine Matheson), to 5-10 year (Ecolab, Visa, WP Carey as examples) and a lot that I have a 3-5 view on.
Things change, absolutely, but I think the Buffett quote of "Buy what you would feel comfortable with if the market closed for 10 years" is a good filter in the decision making process.

GENIX has been open less than 2 years (since May 31, 2013). Classic pattern for many of these boutique funds with high fees. Tailor a hot combination of investments (in this case 99.5% equities) and ride the wave. Watch the money pour in (already over 1.5 BL). Pump that new money into the currently hot sectors. A year (or two or three) later, the market climate changes and the fund starts to swoon. The money pours out as fast as it came in and everybody is convinced the fund's losses are attributable to "bloat" (missing the larger issue).
As usual, those who were last in and last to leave suffer the losses.
Seen this over and over with these funds.