Healthcare has had a good run, but I still think some of the large biotechs are not richly valued (Gilead in particular, trading at a 9.5 forward p/e.) Healthcare continues to do well, I think and has multiple tailwinds. Energy isn't going anywhere anytime soon and yesterday was a bounce. However, if you have a longer-term time horizon, continue to look to add, especially if WTI falls under $40.
Tech I don't really care about all that much and I still have concerns that in some cases, countries will lessen or drop use of some US tech company product because of security concerns and you will see more and more use of local tech companies by foreign nations.
Banks will waiver if interest rates are not going higher as quickly as people thought. REITs and Utilities will likely catch a bid again if it is "rates lower for longer." However, I would be very cautious with yield plays as I still see a lot of major REITs that I think are overvalued or at least very richly valued here. Japan has terrible fundamentals unfortunately and massive QE doesn't change the underlying problems.
I still like Asia, I'm unfortunately souring on Latin America. European QE doesn't make me want to run to Europe.
Random bad chart:
Chart of Arcos Dorados (McDonalds Latin America) since IPO:
http://finance.yahoo.com/echarts?s=ARCO+Interactive#{"range":"max","scale":"linear","comparisons":{"^GSPC":{"color":"#cc0000","weight":1}}}
The other chart that I wish I remember where I saw it a couple of days ago was the Brazilian Bovespa in dollar terms, which is down significantly in the last few years. Just horrible.

Hi Guys,
Change happens, especially in the marketplace. That change promotes personal investment changes, transformations in overarching philosophy and styles. Failure to do so could be ruinous for a portfolio’s end wealth. I changed; Paul Merriman changed.
I changed my investing rules in the 1990s and modified them yet again two years ago. Before the early 1990s I invested solely in individual stock positions, mostly using charting techniques. In the 1990s, I converted to a 90% actively managed mutual fund portfolio to reduce the overwhelming workload of identifying individual stock holdings.
Most recently, I recognized the merits of cost-saving Index products, and plan to only retain about 30% of my holdings in actively managed funds. Transformations are common happenings.
Paul Merriman started to manage money in the early 1980s and favored market timing techniques for roughly two decades. His market timing was not especially prescient. His eureka moment came after being introduced to academic research that demonstrated the advantages of low cost passive investing.
Given his past history, that transformative decision had to be extremely difficult for him. Yet he accepted that challenge and crossed over the line from active to passive portfolio management. I respect him for freely admitting that he was wrong for so many professional years.
Here is a Link to a 2012 WSJ article that discusses his transformation:
http://www.wsj.com/articles/SB10001424052970203718504577181093517535490
Apparently, the Merriman father and son team are somewhat retired from day-to-day operation of their firm. Today, the Merriman team strongly favors a long term buy-and-hold strategy, but they acknowledge that that strategy is just not acceptable by some clients. For these folks, they still apply a market timing strategy in an attempt to reduce personal worry and market volatility. Also it’s suggestive of some control.
There is not a single pathway to successful market participation. Probably, a big factor is consistency. Choose a pathway and stay the course until…… The really challenging task is to complete the “until” with a productive when and how.
Warren Buffett said that “Investing is simple, but not easy”. Larry Swedroe has a list of “14 Simple Truths” for investors. His Truth 14 is: “There is no One right portfolio, but there is One that is right for you.” Wise words from two very wise guys.
Best Regards.

FYI: Making the most of your cash?
Investors sitting on cash have faced a dilemma in recent years: They could choose stable, low-risk options and accept near-zero interest rates or even negative real returns, or take more risk to try to generate some degree of yield. Faced with an unpleasant choice, many have opted to do nothing.
“Many people may be leaving money on the table by not taking full advantage of the cash portion of their portfolios,” says Richard Carter, vice president of fixed income products at Fidelity. “They can be doing something smarter.”
Regards,
Ted
https://www.fidelity.com/viewpoints/investing-ideas/time-for-investing-in-cds

Dear friends,
Messrs. Berkowitz and Schaja chatted with me (and about 30 of you) for an hour tonight. It struck me as a pretty remarkable call, largely because of the clarity of Mr. Berkowitz's answers.
The snapshot: 20-25 stocks, likely all US-domiciled because he likes GAAP reporting standard (even where they're weak, he knows where the weaknesses are and compensate for them), mostly north of$10 billion in market cap though some in the $5-9 billion range. Long only with individual positions capped at 10%. They have price targets for every stock they buy, so turnover is largely determined by how quickly a stock moves to its target. In general, higher turnover periods are likely to correspond with higher returns.
His background (and why it matters): Mr. Berkowitz was actually interested in becoming a chemist, but his dad pushed him into chemical engineering because "chemists don't get jobs, engineers do." He earned a B.A. and M.A. in chemical engineering at MIT and went to work first for Union Carbide, then for Amoco (Standard Oil of Indiana). While there he noticed how many of the people he worked with had MBAs and decided to get one, with the expectation of returning to run a chemical company. While working on his MBA at Harvard, he discovered invested and a new friend, Bill Ackman. Together they launched the Gotham Partners LP fund. Initially Gotham Partners used the same discipline in play at the RiverPark funds and he described their returns in the mid-90s as "spectacular." They made what, in hindsight, was a strategic error in the late 1990s that led to Gotham's closure: they decided to add illiquid securities to the portfolio. That was not a good mix; by 2002, they decided that the strategy was untenable and closed the hedge fund.
Takeaways: (1) the ways engineers are trained to think and act are directly relevant to his success as an investor. Engineers are charged with addressing complex problems while possessing only incomplete information. Their challenge is to build a resilient system with a substantial margin of safety; that is, a system which will have the largest possible chance of success with the smallest possible degree of system failure. As an investor, he thinks about portfolios in the same way. (2) He will never again get involved in illiquid investments, most especially not at the new mutual fund.
His process: as befits an engineer, he starts with hard data screens to sort through a 1000 stock universe. He's looking for firms that have three characteristics:

• Durable predictable businesses, with many firms in highly-dynamic industries (think "fast fashion" or "chic restaurants," as well as firms which will derive 80% of their profits five years hence from devices they haven't even invented yet) as too hard to find reliable values for. Such firms get excluded.
  
• Shareholder oriented management, where the proof of shareholder orientation is what the managers do with their free cash flows.
  
• Valuations which provide the opportunity for annual returns in the mid-teens over the next 3-5 years. This is where the question of "value" comes in. His arguments are that overpaying for a share of a business will certainly depress your future returns but that there's no simple mechanical metric that lets you know when you're overpaying. That is, he doesn't look at exclusively p/e or p/b ratios, nor at a firm's historic valuations, in order to determine whether it's cheap. Each firm's prospects are driven by a unique constellation of factors (for example, whether the industry is capital-intensive or not, whether its earnings are interest rate sensitive, what the barriers to entry are) and so you have to go through a painstaking process of disassembling and studying each as if it were a machine, with an eye to identifying its likely future performance and possible failure points.

Takeaways: (1) The fund will focus on larger cap names both because they offer substantial liquidity and they have the lowest degree of "existential risk." At base, GE is far more likely to be here in a generation than is even a very fine small cap like John Wiley & Sons. (2) You should not expect the portfolio is embrace "the same tired old names" common in other LCV funds. It aims to identify value in spots that others overlook. Those spots are rare since the market is generally efficient and they can best be exploited by a relatively small, nimble fund.
Current ideas: He and his team have spent the past four months searching for compelling ideas, many of which might end up in the opening portfolio. Without committing to any of them, he gave examples of the best opportunities he's come across: Helmerich & Payne (HP), the largest owner-operator of land rigs in the oil business, described as "fantastic operators, terrific capital allocators with the industry's highest-quality equipment for which clients willingly pay a premium." McDonald's (MCD), which is coming out of "the seven lean years" with a new, exceedingly talented management team and a lot of capital; if they get the trends right "they can explode." AutoZone (AZO), "guys buying brake pads" isn't sexy but is extremely predictabe and isn't going anywhere. Western Digital (WDG), making PCs isn't a good business because there's so little opportunity to add value and build a moat, but supplying components like hard drives - where the industry has contracted and capital needs impose relatively high barriers to entry - is much more attractive.
Even so, he describes this is "the most challenging period" he's seen in a long while. If the fund were to open today, rather than at the end of April, he expects it would be only 80% invested. He won't hesitate to hold cash in the absence of compelling opportunities ("we won't buy just for the sake of buying") but "we work really hard, turn over a lot of rocks and generally find a substantial number of names" that are worth close attention.
His track record: There is no public record of Mr. Berkowitz alone managing a long-only strategy. In lieu of that, he offers three thoughts. First, he's sinking a lot of his own money - $10 million initially - into the fund, so his fortunes will be directly tied to his investors'. Second, "a substantial number of people who have direct and extensive knowledge of my work will invest a substantial amount of money in the fund." Third, he believes he can earn investors' trust in part by providing "a transparent, quantitative, rigorous, rational framework for everything we own. Investors will know what we're doing and exactly why we're doing it. If our process makes sense, then so will investing in the fund."
Finally, Mr. Schaja announced an interesting opportunity. For its first month of operation, RiverPark will waive the normal minimum investment on its institutional share class for investors who purchase directly from them. The institutional share class doesn't carry a 12(b)1 fee, so those shares are 0.25% (25 bps) cheaper than retail: 1.00 rather than 1.25%. (Of course it's a marketing ploy, but it's a marketing ploy that might well benefit you in you're interested in the fund.)
The fund will also be immediately available NTF at Fidelity, Schwab, TDAmeritrade, Vanguard and maybe Pershing. It will eventually be available on most of the commercial platforms. Institutional shares will be available at the same brokerages but will carry transaction fees.
Here's the link to the mp3 of the call.
For what interest that holds,
David

Thank you all for the replies. I found an interesting site. It doesn't rank my fund against others as I wanted but it does show the top funds in a category for either 1, 3, 5, 10 or 20 years.
http://www.kiplinger.com/tool/investing/T041-S001-top-performing-mutual-funds/index.php

http://www.cheatsheet.com/personal-finance/retirement-reality-5-charts-you-need-to-see.html/?a=viewall
I've always been intrigued how much annually we spend in retirement. Obviously where we live and if married or single among other factors has an impact. The above link has some interesting retirements facts. For instance, $44897 is the average household spending for those 65-74. I would assume that is a married household. In my local community and surrounding areas I know more than a few single retirees who are doing just fine on $35,000 to $40,000 a year. That includes discretionary expenses ala trips and cruises. Then again, I live in Mayberry and about 30 years behind the times where expenses are very low.

Anyone have an annuity? I realize they are a bad deal and their onefold purpose is peace of mind. But when I turn 70 in 2 years if I put 17.5% of my portfolio in an immediate annuity it (plus my Social Security) would cover all my annual expenses and then some. New York Life is the only insurance company I would ever consider if I went that doubtful route.

Nevermind, if I got a 1.30% annual return on my portfolio it would equal what I would get from the annuity plus I wouldn't have to throw away the 17.5% in the process.
Edit: I am as guilty as anyone, but I think most of us overestimate our longevity.

Anyone have an annuity? I realize they are a bad deal and their onefold purpose is peace of mind. But when I turn 70 in 2 years if I put 17.5% of my portfolio in an immediate annuity it (plus my Social Security) would cover all my annual expenses and then some. New York Life is the only insurance company I would ever consider if I went that doubtful route.

I plan finances up to 85-87yo.....that way I know my plan will come true (work), your plan to 100yo is dead (no pun) to Start

At 65, I am a "young" retiree. Doing some harvesting each year from investments provides a significant portion of the annual funds that get spent in our household. The life expectancy table linked below tells me I have a 50% chance of living to be 89 and a 25% chance of living to be 97. That is almost forever from this "youngsters" perspective. And, those numbers are in line with other materials I have read. So, treating my portfolio something like an annuity seems reasonable....almost without even considering the probability of increased "old" age expenses and any wish to have some money left over when I am gone. Tracking my annual nominal and inflation adjusted return on investments net of all withdrawals and then averaging that information over multiple years helps me keep our annual spending within sustainable bounds. This method could also be used to help guide a path to $0 in some future year.
http://gosset.wharton.upenn.edu/mortality/perl/CalcForm.html

@Tampabay: Once again sir you show your propensity to pontificate from a base of ignorance. Contrary to your juvenile world view, I was born with a pretty fair amount of luck: reasonable intelligence, good health, caring parents, and in the USA. I used those assets to develop skills which resulted in an earning ability allowing me to retire at a reasonable age, and which, with respect to financial assets, quite allows me to hold my own in the MFO environment. Unlike yourself, I also used those skills for the benefit of our general community by serving in the Coast Guard for four years and in Public Safety for many more. I thank you for your suggestions as to how I should have run my life, but I assure you that they are unnecessary.
You seem to have had similar benefits. If in fact you were able to arrange the good fortune of your birth environment due to your own cunning, skill, and really hard work, then you are really quite unique, but somehow I doubt all of that very much.
Your ignorance is pathetic; your lack of compassion for others not as lucky as ourselves is simply contemptible. Yes, I said pathetic, contemptible, and lucky, and I mean exactly that. Your type: a dime a dozen.

>> The ability of actively managed funds to outperform during bear markets is overrated. In some bear markets they do and in others they don't. More important perhaps, the Vanguard study found that in the years following bear markets, index funds usually do much better.

Link? I would like to read. I give lip service (and more than that) to these very notions in my winnowing down to PRBLX and the Yackts, but I regularly distrust my conclusions and seek contrary longterm evidence. Also at 68 I am in the retirement problem of having short and shorter longterm horizons, but unwilling to abandon equity funds and also unwilling (mostly) to index.
Hank and MJG, thanks much.

Thanks MJG.
I looked at your link. And also at a Vanguard study in which they reach a similar conclusion: The ability of actively managed funds to outperform during bear markets is over-rated. In some bear markets they do and in others they don't. More importantly perhaps, the Vanguard study found that in the years following bear markets, index funds usually do much better.
Mark was correct. I only glanced at the first couple paragraphs of the NYT article. The limited 6-year period which the author alludes to discouraged my reading further. Anything can happen over such a short period.
Regards

Hi Hank,
You expressed an interest in earlier S&P Persistence Scorecards that contain Bear market performance records.
The S&P team has been doing this type of analyses for some time now, and their earlier reports are accessible. Here is a Link to their 2010 edition that should satisfy your curiosity:
http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldata&blobtable=MungoBlobs&blobheadervalue2=inline;+filename=PersistenceScorecard_Nov10.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application/pdf&blobkey=id&blobheadername1=content-type&blobwhere=1243781101148&blobheadervalue3=UTF-8
Wow, that’s some address. The study findings change each year numerically, but the general overarching findings do not. With minor exceptions, their 2010 conclusion resembles their most recent conclusion. Here is their 2010 top finding:
“Very few funds have managed to consistently repeat top-half or top-quartile performance. Over the five years ending September 2010, only 4.10% of large-cap funds, 3.80% of mid-cap funds, and 4.60% of small-cap funds maintained a top-half ranking over five consecutive 12-month periods. Expectations of a random outcome would suggest a rate of 6.25%.”
I like your long-term equities perspective. I have owned several activity managed mutual funds for over two decades. However, for even shorter timeframes that exceed one year, I might cut down a little on my equity positions while not abandoning them completely.
Especially today, the returns expected from fixed income sources barely nose-out inflation rates. I think I would attempt to minimize equity risk by very broad equity international and product diversification in holdings like emerging markets, real estate, and commodities. I do keep enough near-cash reserves in short term bonds and money markets to survive for at least two years.
That’s just me wandering a bit. I respect that all investors have different priorities, different risk profiles, different size war-chests, and different investment philosophies. More power and more profit to all of us.
Best Wishes.

Junkster recently mused in a post about striking a balance between reaping now and sowing for the future as we manage our individual portfolios during our "retirement" years. The article in this link suggests it may be appropriate to plan on living to 100 as we consider this question. It also suggests we manage our individual portfolios like endowments, seeking to balance annual withdrawals and portfolio growth to avoid eroding the principal.
The idea of looking at our individual situations and then deciding on an amount to set aside for the future -- be it the nominal or inflation adjusted principal or some other amount -- makes sense to me. (It is the basic approach I use to manage my portfolio.) The decided upon amount can be set aside for use if a dramatic future increase in medical and related care expenses requires it. And, it can include additional funds to be left to our heirs and/or to do good things in the world after we are gone. The remainder of the ongoing total returns in our individual portfolios can be reaped now.
The success of this approach assumes we will avoid doing too much reaping after one or two good years. So, "Reaping Now" needs to be averaged over some number of years. But, the idea that we each need to have a conversation with ourselves and make peace with much we want to be setting aside "indefinitely" for the future makes sense to me.
http://money.usnews.com/money/personal-finance/mutual-funds/articles/2015/03/12/the-100-year-old-portfolio-investments-for-a-long-life

I have figured out for sure that I'll never have the comfortable amounts that get referenced in investing articles from newspapers and magazines. Half a million? Not gonna happen. I have to take satisfaction that between wifey and myself, our "heirs" are recipients from time to time already, in no small way. Life's not fair. But it's LOTS more unfair to some others. And so, we do our part to even the score. "It's a good thing." (---uncle Martha Stewart.)

If I understand correctly, we're not talking about who made more money for their investors over the recent 6-year stretch. We're talking about who performed more persistently over the 6 year stretch. I have no quarrel with either way of looking at that period.
I do wonder about the 2-year stretch that preceded the six-year stretch (roughly early 2007 until early 2009). Just a guess, but a great many actively managed stock funds should have appeared more persistent than their index-based counterparts due to their holding at least a modicum of fixed-income; whereas index funds would have been completely at the mercy of the rapidly falling market and also probably suffered from greater investor outflows as well.
Somebody will have to explain to me why as an investor I should worry about the "persistency" ranking of my funds over any 6-year period. My own belief is one shouldn't even own equity funds unless he/she has an investment horizon of at least 10 years - preferably longer.

I took another look at the article, and the author's previous article which further described the study, and I think the point is that just because a fund had a great year, doesn't mean it will persistently have great years. Bill Miller did it for a stretch, but then he came back to the mean.
The author's prior article on the subject (July 19, 2014) recognizes that over a longer term, some fund managers do beat the market. He points out that Hodges Small and SouthernSun Small Cap "rewarded shareholders spectacularly, turning a $10,000 investment to $35,000 over those five years, ... By contrast, the same investment in a Standard & Poor's 500-stock index fund would have become more than $23,000..."
I believe the value of the study by S&P Down Jones is to point out the risks of buying the hot funds that had a great year--as opposed to considering the long-term and the methodology of the fund. Too many investors buy the top one-year performers and end up selling when the funds have bad years.
[I do believe these forums lose some of their value when they descend into a right/left struggle. It can be a real turnoff.]

HibTampabay,
The primary focus of the article was about performance persistency. That's why the S&P Persistency scorecard was the referenced document.
Again back to the baseball analogy, the issue is if a .300 hitter in year One is likely to repeat his success in subsequent years. That's a tough task for most hitters and results in overpaid ball players.
The Persistency scorecard tells the same challenging story for fund managers. Persistency is an illusive goal for most of them with a very few rare exceptions. You don't often get what you pay for in the active fund investment universe as constantly emphasized by John Bogle.
The debate about the luck-skill spectrum in investing is stimulating, but I believe it is irrelevant in the discussion of the referenced article. You obfuscate by defaulting to the shortcomings of the baseball analogy and the luck/skill arguments.
You're diverting attention away from the purpose of my post; you're mudding the waters. Simply put, you were wrong in the manner that you originally read the article.
Best Wishes.

Over the last 20 years Health Care funds have shellac the overall market in both to the upside on gains as well to the downside on losses. Here's VGHCX (Health Care) vs VTSMX (the Market) over the last 20 years. Will this continue?

Hi Guys,
Be careful here; be very careful indeed.
Trustworthy statistical sets don’t lie when based on honestly representative surveys. Their interpretations are an entirely different matter. In those interpretations, definitions matter greatly. A misinterpretation might not be dishonest; it might simply be a conflated reading of the stats.
Based on my quick reading of the referenced article, and an even quicker reading of your comments, I suspect MFO posters are conflating the S&P data that is the primary source for the article.
The article quotes data from the S&P Persistency scorecard that measures mutual fund performance persistency. That specific data records consistency of returns, not absolute total returns over any integrated multiple periods.
The author focuses attention on the top 25% of funds over the initial baseline year, and than reports only on their persistency in remaining in that top quartile for each of the next four years. They mostly fail to do so.
But that observation says nothing about the cumulative returns of these funds in the entire reporting period. A baseball player who hits in excess of .300 for 4 of any 5 seasons, but has a sub-par .299 in one of those seasons would also fail the S&P Persistency test. I would still trust that .300 hitter in any circumstances and would want him on my team (portfolio).
Properly assembled, statistics don’t lie. However, some writers do purposely lie using statistics to boost a flawed position. Many more writers misuse stats because of statistical innumeracy. And readers add to the chaos by misreading and/or misinterpreting the quoted statistics. User be very careful indeed.
The referenced piece tells more about the fund manager skill/luck debate than about the more important Excess Returns delivery over time.
Best Regards.

Wonderful article! It never bothers to tell us what it means by "the market", however only 2 funds finished in the top quartile of whatever it is for five straight years, less than randomness would produce. This is said to show that you should buy index funds. However, I can guarantee you that no index funds finished in the top quartile of whatever it is for five straight years, either. Index funds aren't designed to do that. They're designed to beat something like 55% or 60% of funds year after year after year with their advantage accumulating as time goes by. So what is it supposed to prove when you show that active funds don't finish in the top quartile all the time?
The above is not to say that I have anything against indexing a stock portfolio. I would say that this is exactly the kind of article that I would expect from the New York Times.