More fun with numbers here. Not commenting on the Australian plan, but what strikes me as an apples-to-oranges comparison.
In the lead paragraph that Ted quotes above, we have the statement that over 90% of Australians put money into the system. That sounds to me like a low number for a system that is mandatory.
The article then goes on to say that in a 2011 EBRI study (the article itself is from two years ago), 40% of working Americans participated in an employer retirement plan. That looks very low compared with Australia (which is a point of the article), until one looks at what this 40% figure represents.
According to the EBRI paper, 75.2 million workers worked for an employer that provided a retirement plan (defined benefit, i.e. traditional pension, and/or defined contribution, like a 401k plan). Of these, 61.0 or over 80% participated. Remember too, that just because an employer offers a plan doesn't mean that all employees are qualified to participate. So the actual participation percentage of those eligible to participate is higher still. Getting pretty close to Australia's figures - and that's on a volunteer basis.
If one wants to find fault in the low participation rate, blame it on the fact that (according to EBRI) only 48.9% of workers even worked for an employer offering a retirement plan (whether or not they qualified to participate). If there's something to fix, it would seem to be getting more employers to offer retirement plans, not raising employees' interest in participating.
Here's the EBRI summary and paper.

From the article:
"I’m not suggesting that every investor has to implement these specific constraints to guide their actions. But all investors do have to figure out which constraints to place on themselves based on their past history and personality traits. Everyone has their blind spots.
>>> = my reply within my own constraints
>>>Yup. We've chatted about this here. Better know who you are and what tweaks you around the edges.
These are a few more examples I’ve seen from others over the years:
◾Don’t invest in anything you don’t understand.
>>>'Course...
◾Stay within your circle of competence.
>>>Not unlike driving an auto, eh?
◾Never pay more than a certain fee level for investment products.
>>>Okay. Pick a number
◾Give yourself 5-10% of your portfolio to speculate to appease your gambling instincts.
>>>At least. But, don't ever forget you're playing with the big kids with investments and may get your clock cleaned too, with particular investments every now and then
◾No more than a certain percentage invested in any one security or asset class.
>>>Diversification I'm guessing. Know thy self again here.
◾Only look at your portfolio value monthly, quarterly, annually, etc.
>>>Holy crap. You'll probably miss sells and buys if you wait long enough. See below
◾Rebalance on a set calendar schedule or when your allocation weights hit a certain band outside of their target.
>>>More of a know thy self or to each his own, eh?
◾Wait at least a week to implement a new investment decision.
>>>Depends how well you understand what you're doing. You should have already been thinking about a new investment; unless you look at your portfolio rarely, as noted just above
◾Talk to an unbiased outside observer about every big portfolio move you’re about to make.
>>>MFO is a good start, unless you have someone near with a known steady brain cell pattern
◾Actively seek out opposing viewpoints on your current investment stance.
>>>Same as above, although their are those here who consider this to be a no-no from a total stranger encountered via the internet, but likely an unbiased outside observer, as noted above
◾Keep a decision journal and review before making any new portfolio moves.
>>>One can't perform this function well if they follow the review plan as noted above
◾Only allow a certain number of transactions per year.
>>>Say what? And this has to do with ??? I suppose this fits into the "look" at your portfolio sequence noted previous...annually.
Now is probably a good time to review your own constraints within your investment plan. Interest rates are low. Stock prices are high. This stage in the cycle can lead people to relax their risk controls and press the issue if they’re not careful.
>>>Is there a special time to review one's constraints? How about very often.
I’m of the opinion that most investors would be better off making fewer decisions and getting rid of any unnecessary clutter from their portfolios and investment process. Placing constraints on yourself is a great way to do this. The first step is understanding yourself and your own flaws, something that’s not as easy as it sounds, since the easiest person to fool is often yourself.
>>>Who is the clutter decider ??? Some folks have considered bond portfolio portions to be clutter over the years. Depends, eh?
And no..........none of this is supposed to be easy.
>>>Lastly, one can always do a VTI and BND, 50-50% mix and go take a long nap. Wait, I already visited this area before. Time to move along. The article is pretty good for the most part and for almost everyone.
Have fun folks.
Catch

>> insight and the skill to simplify complex problems without losing the basic message.
Well, there are widespread other views of this guy, the one below by an economics historian who held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. {Wow.]
http://economix.blogs.nytimes.com/2013/07/16/inflationphobia-part-ii/
... Bartlett focuses largely on the malign influence of Henry Hazlitt, who was among other things writing many editorials for the New York Times always insisting that the answer to the Great Depression was to encourage big cuts in wages.
[Krugman:]
Hazlitt remains, by the way, a popular figure on the right. ... Hazlitt’s continuing popularity should serve as some kind of lesson to those ... who marvel at the continuing influence of inflation fearmongers; they’ve been wrong about everything for 5 years, so why do they still get treated as authority figures? Well, Hazlitt has been wrong about everything for more than 80 years, and is still regarded as a guru. Bad ideas, it appears, are extremely robust in the face of contrary evidence. The thing is, by the time Hazlitt was penning those editorials demanding wage cuts, Keynes and Fisher had already said everything that needed to be said. Keynes in 1930:

[I]f a particular producer or a particular country cuts wages, then, so long as others do not follow suit, that producer or that country is able to get more of what trade is going. But if wages are cut all round, the purchasing power of the community as a whole is reduced by the same amount as the reduction of costs; and, again, no one is further forward.
And Fisher pointed out in 1933 that a general fall in wages and prices actually makes things worse, by making debtors poorer in real terms; true, creditors are made richer, but because debtors are more likely to cut spending than creditors are to increase it, the overall effect is to deepen the depression.
One implication of all this is ... the paradox of flexibility: making it easier for wages to fall, as Hazlitt demanded then and his modern acolytes demand now, doesn’t just redistribute income away from workers to the wealthy (funny how that happens); it actually worsens the economy as a whole.
+++
Maybe Hazlitt is better in other areas.

Hi, VF.
I don't know the answer to the first. I do know that there have been managers who put every penny they have in their firm and in their funds at start-up to help get the fund to a viable level. As the years pass and things stabilize, they try to de-lever a bit, set up a 529 for the kids, rebuild their personal emergency account, buy shares of Etsy and so on. That causes them to sell shares of the fund, not from a lack of conviction but from competing obligations. That's sometimes misread, especially in the world of "press 'send' first, get the facts later," so they create a "that's something we don't talk about" policy.
Again, I don't know if that's the case here. Given Andrew's profound and ongoing commitment to the fund and his shareholders, though, I suspect something like it is the case.
As to the second, you always want to be careful of running afoul of the SEC's name rule. If you put the name of a distinct asset class in the name of your fund (David's Fund of Bankrupt Corporations), then you need to keep 80% of your assets there. Given the fluidity about what qualifies as an emerging market and the opportunity for gaining EM exposure through, say, investments in Irish companies, "overseas" in the name and "diversified global emerging markets" in the explanation might trigger far fewer headaches.
For what that's worth,
David

Hi Guys,
In 1946, Henry Hazlitt wrote a short book that would become a best selling classic: “Economics in One Lesson”. The book collected a huge readership, and has been reissued numerous times. The “One Lesson” is fully explained in Chapter 1; it is 4 pages of text in its entirety. Here is a Link to the entire book so it takes a little time to download:
http://fee.org/resources/detail/economics-in-one-lesson-2?gclid=CMet8uqeg8UCFREoaQodXCkA_g#calibre_link-34
His summary of that One Lesson follows:
“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
You might want to sample a practical application of the One Lesson. Chapter by chapter, Hazitt provides many examples. His “Broken Window” (chapter 2) is brilliant. Continue reading as much as you like from the Link above.
So, in Hazlitt’s headlights, economics is a two dimensional problem with time being one parameter, and the integration of all impacts a second parameter. It’s a simple 2 X 2 matrix.
Numerous independent mutual fund studies have similarly concluded that only 2 factors are primary determinants of fund performance: (1) time in game and (2) costs. Hence, a 2 X 2 matrix can be constructed.
In my modeling of this uncomplicated matrix, time is characterized as either short-term or long-term, while costs form the other axis.
Short-term can be viewed as a single year’s return while long-term can be visualized as a 10 to 30 year performance period (you choose your own long-term time measurement depending on your goals). The most straightforward way to model the cost axis is to segregate high cost (active funds) and low cost (Index funds) options.
Likely more than any other non-academic researcher, John Bogle has explored these issues for decades. I’ve used his analyses to fill-out the matrix with approximate numbers. Here is the Link to Bogle’s “The Arithmetic of “All-In” Investment Expenses” that I reference:
http://www.cfapubs.org/doi/pdf/10.2469/faj.v70.n1.1
A primary output from Bogle’s work is to scope the total extra costs associated with active fund management beyond Expense Ratio. He identifies and typifies these costs that incrementally add to the conventional Expense Ratio. The extra costs are: (1) transaction costs, (2) cash drag, (3) sales loads when applicable, and (4) excess taxes. Please access his paper for details.
Bogle’s work is approximate and imperfect because some data are unavailable and estimates are required. Depending on how the numbers are generated, and the conservatism buried within each estimate, the extra costs hover both slightly South or slightly North of 2% annually.
Over a short period that 2% increment might not be overwhelming, but when integrated over extended timeframes (like 10, 20, or 30 years), those extra fees are brutal to a portfolio’s end value. Bogle’s illustrative Table Two shows double digit active fund penalties that multiply as the time horizon expands. His Table Three and Figure 1 add further injury when tax considerations are appended.
Separately, very carefully executed Monte Carlo studies demonstrate just how difficult it is to overcome a 2% extra fee handicap. The simulations show how rare it is to overcome a 2% cost differential. In practice, some do it, but many fail. And active manager’s inconsistent persistency over a long-term time horizon is yet another uncertainty that tarnishes their records.
Both Hazlitt and Bogle share a noteworthy common trait. They have the insight and the skill to simplify complex problems without losing the basic message. I admire both gentlemen. Please visit the Links provided.
Please consult the referenced Links for much needed detail. My story is incomplete.
Sorry for my over exuberant title.
Best Regards.

This may feel like math class, but here's another not-so-hypothetical hypothetical: Suppose a mutual fund manager is invested in a bank that is beginning to offer mortgages to poor people and overextended real estate speculators whom the manager believes will ultimately default on those loans years down the road. The bank decides to package those loans into collateralized mortgage backed securities that the fund manager also suspects years down the road will default. The bank also has a hedge fund division that leverages its bets on these CMO securities 20 to 1, which the manager suspects in the long-term will implode. But in the short-term the manager knows these activities will be immensely profitable, and in fact the bank will fall behind other banks doing exactly the same thing if it doesn't offer such loans. What do you see as the fiduciary responsibility of the fund manager in that situation? Bear in mind, that the manager gets to vote on electing boards who hire the CEOs making the decision to do this sort of lending. Also, bear in mind that the manager also gets to vote on the CEO's compensation package as to whether the CEO should get options that vest every quarter based on short-term profits or perhaps long-term restricted stock.

From the article:
"The U.S. is ranked ninth, with Mercer researchers faulting American 401(k) rules that allow savers to borrow from their accounts and take penalty-free distributions as soon as they reach age 59½."
There is this constant push to keep people working well into their 60's and into their 70's as well. Not all workers want to or can work that long. If the person has saved into their taxed deferred accounts throughout their work history, why not let them leave the work force early. That frees up jobs for the younger folks. I do agree with the idea regarding borrowing from retirement accounts. It should be a last resort.
As mentioned in another thread recently, travel is a great idea. Being able to do what you want and enjoy your senior years should not be lost. If you enjoy your work then that's fine. But for many, the senior years should be enjoyed with family and friends.

Sorry to be the contrarian. But outsized returns?? Not over the past 10 years. I rarely to never listen to money managers because it is easy to sound educated and articulate on a subject. Results impress and sway me more.

You are able to skip whatever does not interest you. Gundlach suggests caution concerning high yield bonds when he looks a couple of years into the future and thinks gold will be a good place to put some money during the coming 6 to 12 months.
valuewalk.com/2015/04/wall-street-week-video-on-demand-jeffrey-gundlach/

Here are some quick highlights from Thursday night’s conversation with Andrew Foster of Seafarer.
Seafarer’s objective: Andrew’s hope is to outperform his benchmark (the MSCI EM index) “slowly but steadily over time.” He describes the approach as a “relative return strategy” which pursues growth that’s more sustainable than what’s typical in developing markets while remaining value conscious.
Here’s the strategy: you need to start by understanding that the capital markets in many EM nations are somewhere between “poorly developed” and “cruddy.” Both academics and professional investors assume that a country’s capital markets will function smoothly: banks will make loans to credit-worthy borrowers, corporations and governments will be able to access the bond market to finance longer-term projects and stocks will trade regularly, transparently and at rational expense.
None of that may safely be assumed in the case of emerging markets; indeed, that’s what might distinguish an “emerging” market from a developed one. The question becomes: what are the characteristics of companies that might thrive in such conditions.
The answer seems to be (1) firms that can grow their top line steadily in the 7-15% per annum range and (2) those who can finance their growth internally. The focus on the top line means looking for firms that can increase revenues by 7-15% without obsessing about similar growth in the bottom line. It’s almost inevitable that EM firms will have “stumbles” that might diminish earnings for one to three years; while you can’t ignore them, you also can’t let them drive your investing decisions. “If the top line grows,” Andrew argues, “the bottom line will follow.” The focus on internal financing means that the firms will be capable of funding their operations and plans without needing recourse to the unreliable external sources of capital.
Seafarer tries to marry that focus on sustainable moderate growth “with some current income, which is a key tool to understanding quality and valuation of growth.” Dividends are a means to an end; they don’t do anything magical all by themselves. Dividends have three functions. They are:

An essential albeit crude valuation tool – many valuation metrics cannot be meaningfully applied across borders and between regions; there’s simply too much complexity in the way different markets operate. Dividends are a universally applicable measure.
A way of identifying firms that will bounce less in adverse market conditions – firms with stable yields that are just “somewhat higher than average” tend to be resilient. Firms with very high dividend yields are often sending out distress signals.
A key and under-appreciated signal for the liquidity and solvency of a company – EMs are constantly beset by liquidity and credit shocks and unreliable capital markets compound the challenge. Companies don’t survive those shocks as easily as people imagine. The effects of liquidity and credit crunches range from firms that completely miss their revenue and earnings forecasts to those that drown themselves in debt or simply shutter. Against such challenges dividends provide a clear and useful signal of liquidity and solvency.

It’s certainly true that perhaps 70% of the dispersion of returns over a 5-to-10 year period are driven by macro-economic factors (Putin invades-> the EU sanctions-> economies falter-> the price of oil drops-> interest rates fall) but that fact is not useful because such events are unforecastable and their macro-level impacts are incalculably complex (try “what effect will European reaction to Putin’s missile transfer offer have on shadow interest rates in China?”).
Andrew believes he can make sense of the ways in which micro-economic factors, which drive the other 30% of dispersion, might impact individual firms. He tries to insulate his portfolio, and his investors, from excess volatility by diversifying away some of the risk, imagining a “three years to not quite forever” time horizon for his holdings and moving across a firm’s capital structure in pursuit of the best risk-return balance.
While Seafarer is classified as an emerging markets equity fund, common stocks have comprised between 70-85% of the portfolio. “There’s way too much attention given to whether a security is a stock or bond; all are cash flows from an issuer. They’re not completely different animals, they’re cousins. We sometimes find instruments trading with odd valuations, try to exploit that.” As of January 2015, 80% of the fund is invested directly in common stock; the remainder is invested in ADRs, hard- and local-currency convertibles, government bonds and cash. The cash stake is at a historic low of 1%.
Thinking about the fund’s performance: Seafarer is in the top 3% of EM stock funds since launch, returning a bit over 10% annually. With characteristic honesty and modesty, Andrew cautions against assuming that the fund’s top-tier rankings will persist in the next part of the cycle:

We’re proud of performance over the last few years. We have really benefited from the fact that our strategy was well-positioned for anemic growth environments. Three or four years ago a lot of people were buying the story of vibrant growth in the emerging markets, and many were willing to overpay for it. As we know, that growth did not materialize. There are signs that the deceleration of growth is over even if it’s not clear when the acceleration of growth might begin. A major source of return for our fund over 10 years is beta. We’re here to harness beta and hope for a little alpha.

That said, he does believe that flaws in the construction of EM indexes makes it more likely that passive strategies will underperform:

I’m actually a fan of passive investing if costs are low, churn is low, and the benchmark is soundly constructed. The main EM benchmark is disconnected from the market. The MSCI EM index imposes filters for scalability and replicability in pursuit of an index that’s easily tradable by major investors. That leads it to being not a really good benchmark. The emerging markets have $14 trillion in market capitalization; the MSCI Core index captures only $3.8 trillion of that amount and the Total Market index captures just $4.2 trillion. In the US, the Total Stock Market indexes capture 80% of the market. The comparable EM index captures barely 25%.

Highlights from the questions:
While the fund is diversified, many people misunderstand the legal meaning of that term. Being diversified means that no more than 25% of the portfolio can be invested in securities that individually constitute more than 5% of the portfolio. Andrew could, in theory, invest 25% of the fund in a single stock or 15% in one and 10% in another. As a practical matter, a 4-5% position is “huge for us” though he has learned to let his winners run a little longer than he used to, so the occasional 6% position wouldn’t be surprising.
A focus on dividend payers does not imply a focus on large cap stocks. There are a lot of very stable dividend-payers in the mid- to small-cap range; Seafarer ranges about 15-20% small cap amd 35-50% midcap.
The fundamental reason to consider investing in emerging markets is because “they are really in dismal shape, sometimes the horrible things you read about them are true but there’s an incredibly powerful drive to give your kids a better life and to improve your life. People will move mountains to make things better. I followed the story of one family who were able to move from a farmhouse with a dirt floor to a comfortable, modern townhouse in one lifetime. It’s incredibly inspiring, but it’s also incredibly powerful.”
With special reference to holdings in eastern Europe, you need to avoid high-growth, high-expectation companies that are going to get shell-shocked by political turmoil and currency devaluation. It’s important to find companies that have already been hit and that have proved that they can survive the shock.
Bottom line: Andrew has a great track record built around winning by not losing. His funds have posted great relative returns in bad markets and very respectable absolute returns in frothy ones. It’s a pattern that I’ve found compelling.
Thanks to Timothy Gaar, David Hubbard, Sheldon Zafir and Heezsafe for raising questions with Andrew; regrets to Don Davis and Elie Tabet who were in the question queue when time ran out. I forwarded their contact information to Seafarer in hopes that their questions might yet be answered.
For folks unable to catch the call, there’s an available mp3 of the call. My observations, above, are based on notes that I took on the fly as the call proceeded, rather than on a careful replaying of the audio. They represent my interpretation plus my best attempt to reproduce Andrew’s words. I would, as always, be delighted to hear the reactions of some of the 40 other folks who participated as well.

@Maurice:
>> Since Ronald Reagan left office, there is not one American president who I believe would oppose such a tax.
A comical view in fact:
http://www.npr.org/2011/02/04/133489113/Reagan-Legacy-Clouds-Tax-Record
http://newsjunkiepost.com/2011/02/06/the-disastrous-legacy-of-ronald-reagan-in-charts/
HORSLEY: Reagan famously did cut taxes, sharply, in his first year in office. But as former Senator Alan Simpson, who co-chaired the fiscal commission, was quick to remind Norquist, that's only half the story.
Former Senator ALAN SIMPSON (Republican, Wyoming): Ronald Reagan raised taxes 11 times in his administration. I was here. I was here. I knew him. Better than anybody in this room. He was a dear friend and a total realist as to politics.
HORSLEY: Simpson's recollection is spot on, says historian Douglas Brinkley, the editor of Reagan's diaries.
Professor DOUGLAS BRINKLEY (Rice University): Ronald Reagan was never afraid to raise taxes. He knew that it was necessary at times. And so there's a false mythology out there about Reagan as this conservative president who came in and just cut taxes and trimmed federal spending in a dramatic way. It didn't happen that way. It's false.
HORSLEY: Reagan's budget director, David Stockman, explains the 1981 tax cut blew a much bigger hole in the federal budget than expected. So over the next few years, Reagan agreed to raise taxes again and again, ultimately undoing about half the savings of the '81 cut.
Mr. DAVID STOCKMAN (Former Director, Office Management and Budget): He wasn't very happy about it. He did it reluctantly. But at the end of the day, the math was overwhelming.
FLINTOFF: That's because Reagan was never able to match his 1981 tax cuts with a comparable cut in federal spending. A modest reduction in domestic spending was dwarfed by Reagan's big buildup in the Pentagon budget. And, Stockman says, Reagan never made a serious effort to challenge middle class entitlement programs, after an early proposal to curtail Social Security benefits was shot down.
Mr. STOCKMAN: The White House and President Reagan himself retreated within three days when it became clear the enormous political resistance that would occur if you were going to cut entitlements.
FLINTOFF: And without big spending cuts, Reagan faced a choice between raising taxes and an even bigger federal debt. He chose the tax hikes. ... But ever since Reagan, presidents who've tried to raise taxes are confronted with the myth of their tax-cutting predecessor.
What puzzles historian Brinkley is how Reagan, who also raised taxes, avoided paying a political price.
Prof. BRINKLEY: He seemed to get away with both. He seemed to really be kind of a centrist, big government deficit spender, but also be seen as a budget cutter. And it's because his persona was so great.
FLINTOFF: That persona is carefully cultivated by those, like Grover Norquist, who use Reagan's legacy as a weapon to fight off new taxes. Stockman says these myth-makers are distorting the real Reagan record.
Mr. STOCKMAN: I wouldn't call it merely airbrushing. I would call it outright revisionism if not fabrication of history.

This discussion is as of 4y ago.

For a very small fee of 0.1%, I would manage others' moneys by transitioning from AOA to AOR to AOM to AOK every 5-15 years or so. I wonder how that would compare.

I couldn't help but notice the title of the column: Fidelity vs. Vanguard, not actively managed vs. passively managed. So why did Merriman do the latter comparison? Fidelity has a series of target date funds that invest in index funds, and have exactly the same underlying ER as Vanguard; 0.16%.
(To John's point - sometimes Fidelity does not charge more for the same product; they generally match Vanguard in the index arena.)
There are still a couple of differences though, that Hank alluded to: the glide path of Fidelity funds (whether these index ones, or the ones Merriman chose to use as straw men) continue changing until 15 years past their target date (i.e. you still need growth past age 65). Vanguard's settle into a sleepy 30/70 (stock/bond) split just five years after retirement.
Then there is the breadth of assets employed. Even these "boring" Fidelity index target funds use TIPs and commodities. (The actively managed Fidelity target funds go further) And still they do this with the same ER. (To be fair, Vanguard adds international bonds, albeit hedged.)

Target Date funds vary too much from house to house to compare adequately. You best look under the hood - though I agree fees are an important consideration. Allocations among assets vary greatly, so that performance comparisons over time frames shorter than 10 years are near meaningless. The "glide-path" (usually prescribed by Prospectus) towards higher cash/bond allocations may vary. Additionally (at least in the case of Price), holdings are spread out among a number of underlying funds - so that you really need to become informed on how each of those underlying funds invests.
-
From the article: "Why are Fidelity expenses more than three times as high as Vanguard's ... First, Fidelity pays active fund managers to try to beat the market."
Not so fast .....
Let's overlook the fact that these are most likely team-managed (despite having a single "lead" manager).
Let's also overlook that you are buying into the research/analytical capabilities, often global, these companies possess. A manager is only as good as the research and analysis underlying him/her. That's especially important when you consider the wide breadth of investments held by these funds.
Let's also overlook that you are buying into a corporate "culture" whose assessment of risk and treatment of clients will vary. The first directly affects the returns available from these funds as well as the potential losses you may incur.
Returning to fees. Remember that the mix of assets held greatly impacts the fees a fund must charge to recover its costs. One invested heavily in plain-vanilla government bonds and equity indexes can charge substantially less than one with substantial allocations to high yield debt and international and EM stocks and bonds.
Aside from the above, it's a great article.

Still a lot of uninformed folks who are paying loads for the benefit of having an advisor run the investments for them, eh?
I know of three married couples who are using full service advisors. I have asked and they don't know much about their investments, but that they are paying a 1.5% fee, plus buying the the front loaded funds.
I have talked with these folks over the years and none of them had any interest in learning even the most basic functions of investing in funds. In both cases, available time was not a factor.
Another, oh well moment. At the least, they are providing an income for another, who in turn spends the income back into the economy.

Junkster said "... All the more reasons why some of us old timers need to start spending and enjoying what we have accumulated over the years. Life is short!".
AMEN.
-
Assuming the age of a great many here to be 65 or over, I'm a little puzzled there isn't greater discussion about withdrawing money and putting proceeds to good use. How often are we as investors faced with a crucial investment decision? Rarely I'd say. By contrast, we make decisions about spending nearly every day of the week. Yet, nary a mention.
I have some possible explanations. First, the average age of participants may be much lower than envisioned (I'd love to see whatever demographic data David has). If the average age is closer to 35 or 45, than it makes sense so much of the discussion revolves around buying/selling mutual funds, stocks, bonds or other investments. Another possibility is that many older folks who come here may fear they haven't saved enough to meet anticipated retirement needs - and are struggling to play catch-up at a late stage. The third (most likely) explanation is that it just isn't considered appropriate to mention spending on a forum devoted to investing.
I'd never argue that one should stop investing - not at any age. Even late in retirement folks should be seeking to outperform the measly returns cash and many bonds now offer. And since retirement may well last 30 years or longer, younger retirees still need to be acute to growing the nest-egg. Also, some older investors are focused primarily on growing their assets for the benefit of posterity.
Thanks Junkster and heezsafe for pointing this out in your recent posts. Just some rambling over coffee this morning.

The 15-year number does not mean much to me. Cycles occur, as when U.S. stocks under-performed international from 2001-2007, and the reverse happened in 2008-2014. Most of these funds have had multiple manager changes in 15 years. I would be much more interested in looking at true diversified international (not global, not EM) with current manager track records or records including their previous intl fund stints. When I do that, I get a very different picture and group of funds.

Hi @Ted
This from my reply at your GMO link:
"Yup. One has to know what the intention and/or meaning of a particular investment is attempting to do.
Hell, healthcare will take a bang downward at some point in time, eh? One must pay attention to be an investor; deciding what they choose to do about/with risk and reward."
>>>The article mentions "Worrying"; but only in the title line.
As to currency swings. We all should understand that most standard active mutual funds do not apply a part of their operation to currency hedging.
But, also part of our world of investing is that other choices exist that do allow for flexibilty with investment choices.
From the GMO article link:
While many investors cite volatility reduction as a rationale for currency hedging, a white paper from GMO's Catherine LeGraw argues:
1) Volatility may be cut over the short-term, but not over longer horizons
>>>Correct
2) Volatility benefits have been reduced over time as companies become more global
>>>Correct
3) Even if volatility is lowered for international holdings, it isn't reduced for the whole portfolio as the hedging simply makes holdings more correlated with U.S. stocks
>>>Partially correct, IMHO
4) Hedging introduces leverage and hence tail risk (see the move in the Swiss franc).
>>>Correct. Investing involves risk, period.
>>>You directed this post towards me, and I am guessing this was based upon my notes to your GMO article post.
Worrying here regarding investments? Not at this time. Which includes our holding of HEDJ.
We sold our largest bond holding, LSBDX , beginning last October and unwound another large holding of PIMIX . LSBDX is at +.17% total return since mid-Oct, 2014 and -.21% YTD. PIMIX is about +3% YTD, and performing better than I expected. But, the monies from these sells have performed well with the purchases made with the monies.
We're about 65% equity between U.S. and Europe, at this time.
Europe, as we here know; has been going through stops and starts for investing for the past 5 years. The most recent QE program by the ECB may be of benefit; but I am not so sure of the overall long term value, at this time. The long time strength of the Euro finally started to decline (and stick) and we hope to ride this movement until the value of this is much less important.
Lastly, regarding the Euro currency. If, in conjunction the current QE policy of the ECB reducing interest rates and supporting bonds; that a positive recovery and strength for this areas exports will require the Euro to continue to devalue.
The holding periods for any of our investments is always subject to change dependent upon pricing and related market actions to any given sector.
The only sector of question at this time is U.S. real estate. Yes, this area has had a decent run for some time now; but I don't really find a reason for the recent weakness; other than profit taking.
Okay, time for more coffee; as I have to remove old carpeting/padding. YUCK !
Thanks for the question, or curiosity.
Take care,
Catch

Dear friends,
We have a conference call with Andrew Foster this Thursday evening, April 16, from 7:00 - 8:00 Eastern. Andrew manages SFGIX/SIGIX, which qualifies as a five-star fund under Morningstar's system and a Great Owl under our most risk-conscious one. Only 10 of 180 EM stock funds hold that distinction; of those, Seafarer has the distinction of being no-load, open to retail investors, and low cost (I think it has the lowest e.r. of the retail EM Owls).
The fund is up 13% YTD, 10% annually over the past three years, top 3% of its peer group. Andrew is one of the best communicators and best stewards around.
You'd be more than welcome to join us for hear from, and chat with, Andrew on Thursday. Failing that, I'd be delighted to share any questions you might have with Andrew and then I'll report back his responses in a "highlights" note here on the board.
As always, it's free and it's just a phone call so you can join in from pretty much anywhere.
Back to commenting on drafts of my students' papers,
David

FYI: Foreign stock mutual funds have outperformed U.S. stock funds the past 15 years. Stock funds invested abroad had built a huge lead by the end of 2007, as foreign markets, particularly emerging markets, surged while the U.S. economy struggled to recover from the bursting of the dot-com bubble.
Regards,
Ted
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