@MFO Members: On July 17, 1995, the index closed above the 1,000 mark for the first time. It made steady gains in the following years to reach 2,000 points by 1998, then began to accelerate significantly. This process mushroomed in late 1999 amid concerns that businesses would require massive technology replacement to achieve Y2K compatibility, allowing the index to close that year at 4,069.31 points. On March 10, 2000, the index finally peaked at an intra-day high of 5,132.52,[1] and closed at an all-time high of 5,048.62. The decline from this peak signalled the beginning of the dot-com bubble burst.
Regards,
Ted
Source: From Wikipedia

Here's a link to the fund's investor returns over the past 1, 3, and 5 years. What a contrast to the fund's actual returns. Bottom line: Many investors didn't participate in the up years but are participating in the down years.
http://performance.morningstar.com/fund/performance-return.action?p=investor_returns_page&t=MFLDX&region=usa&culture=en-US

FYI: Health care mutual funds have outperformed the S&P 500 by a wide margin in the past 15 years and have really taken off the past two years.
You'd be sitting on $48,522 today if you'd invested $10,000 in the average health care fund on Sept. 30, 1999, according to Morningstar data. The same investment in the S&P 500, which tracks the broad stock market, would have grown to $21,149.
Regards,
Ted
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Hank ... and, others:
I just don't keep losers. There are too many good funds that one can invest in to keep underperforming funds. After all, how long would you keep a sales rep that continued to under perform and not meet sales goals? Years ago, I learned there was only one rule that really applied ... If you can't sell ... you can't say. My job was to move those along that could not meet expectations. The old coach would say … “Old_Skeet fire them up or fire them out.” Same with a mutual fund ... If it doesn't perform to expectations ... find another one that can as there are many to choose from.
And, occasionally I will fire one and move to another … WASAX and MFLDX are examples as they are now history and no longer held within my portfolio. Simply stated they failed to meet my expectations and the outlook was not favorable that they would going forward.
Old_Skeet

Nice post Old_Skeet, couldn't agree more. But I disagree with Hank as I see many here that cling to losers and/or underperforming funds and stocks. And then they recite 1001 reasons why they won't let go of such funds/stocks.

There is some question among people as to when one should pull the trigger and fire the fund. Three years seems to be a common answer. Another answer is when the fund has changed its strategy or if the manager leaves with no visibility ahead. In the case of MFLXD, The "Olds" made their decisions when the fund didn't perform to expectations.
With funds like these (alternatives), maybe a tighter leash is required?

Hank ... and, others:
I just don't keep losers. There are too many good funds that one can invest in to keep underperforming funds. After all, how long would you keep a sales rep that continued to under perform and not meet sales goals? Years ago, I learned there was only one rule that really applied ... If you can't sell ... you can't say. My job was to move those along that could not meet expectations. The old coach would say … “Old_Skeet fire them up or fire them out.” Same with a mutual fund ... If it doesn't perform to expectations ... find another one that can as there are many to choose from.
And, occasionally I will fire one and move to another … WASAX and MFLDX are examples as they are now history and no longer held within my portfolio. Simply stated they failed to meet my expectations and the outlook was not favorable that they would going forward. When the funds had a relative small to medium assets under managemnt base I did indeed made some good money from these holdings. However, as the AUM begin to bulk up that is when they began to lag and I noticed both were slow in their repositioning process and with this, I left.
Old_Skeet

FWIW, I kinda like the fund. It is pretty unique. But the returns are pretty paltry. It holds up better in down markets (-6.5 max draw down) and is tame (ulcer index of 1.1), but the returns just aren't high enough to have me interested (annualized over the past 3 years, 3.5%). There's a place for this type of fund in some people's portfolio.

Hi all, I'm a big fan of the discussion board here at MFO. I was looking for some advice for my girlfriend's Roth that she can no longer contribute to due to her current income bracket.
I got her out of a small cap growth fund from Buffalo Funds. She's at least 25 years away from withdrawing and I was looking at DMCRX, because of the outperformance that I found on M* over the past 12 years compared to other small value and micro funds.
I'm also considering TSELX and WSVRX, but I'm not sure how long Mr. Walthausen is going to be around to keep working his magic.
Thanks for your help

FYI: With the S&P 500 seemingly hitting record highs on a daily basis, it is not surprising to see bullish sentiment increasing along with the market, and that's exactly what we saw this week. According to the American Association of Individual Investors (AAII), bullish sentiment increased by 5.24 percentage points to 57.93% from last week's level of 52.69%. What is likely to raise eyebrows, though, is the fact that with this week's increase, bullish sentiment hit its highest level in more than four years, and is the second highest reading we have seen in the current bull market.
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/11/13/bullish-and-bearish-sentiment-both-increase.html?printerFriendly=true
AAII Website: http://www.aaii.com/sentimentsurvey

Well ... Ted:
Perhaps, there will be new leadership, within the sectors, for 2015 ... Seems, the defensive sectors of health care, consumer staple and utilities have been the three big winners thus far for 2014. Not surprised ... as they generate good yield ... and, most folks today want a good yield. Look at some of the large cap tech's that have started to pay dividneds. Years back they would never have done this, with perhaps, the exception being IBM.
My late father use to remind me often that yield generating stocks may go out of favor from time-to-time but they want go stale like the others. And, when the market pulls back they will still be around paying you a dividend where you can find patience awaiting the turn around. In capital appreciation ... Well, you might be looking with your hand extended for some time hoping some crums might come your way. With this, my family's portfolios have been built around diverisfied income generation for years with a goodly amount to the dividend paying stocks over fixed income.
And, so it goes ...
Old_Skeet

FYI: The S&P 500 is up a shade more than 10% for the year. If it can hold those gains – and the market is already in Santa-Claus rally mode – then that would mark three consecutive years of double-digit percentage growth. But one look at the sector breakdown should give the bulls pause.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2014/11/13/morning-moneybeat-a-utilitarian-stock-rally/tab/print/
Sector Tracker: Click On YTD: http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
Current Futures Looking Good: http://finviz.com/futures.ashx

You could split between two funds, say EXTAX and FLTMX.
Performance of VTMFX seems pretty good over the past 3 years

Not too thrilled with the ER for EXTAX - seems a bit high to me compared with VTMFX.

You could split between two funds, say EXTAX and FLTMX.
Performance of VTMFX seems pretty good over the past 3 years

Never agreed with you more, @Ted Rob has gotten it so wrong for so many years, I suppose, sooner or later, things will look up for him.

>>>Even when looking at individual funds here (HSGFX, MFLDX, CVSIX, etc.) the prospectus usually gives the manager so much discretion per holdings and strategy that they are very difficult to understand, and their direction can change on a whim.<<<
Three dog funds when compared to the S&P over the past many, many years. I didn't read the article but isn't the only reason these funds came into vogue was because of 2008? I recall a WSJ article back in the late 90s titled "Waiting Up Rich." It was about how so many investors retiring found themselves rich by merely hanging tight with S&P.
Obviously I am not a fan of buy and hold but in the long run it surely beats all these alternative funds sought by scared investors worried about a replay of 2008 or worse.

FYI: The rates that utilities charge customers and the profits the providers of water and power can make are highly regulated, but utilities' stock gains have pushed the funds that focus on them to the No. 3 performing sector in the past 15 years as well as year to date.
A $10,000 investment in the average utility mutual fund on Sept. 30, 1999, would have grown to $28,940 by Nov. 10 this year, according to Morningstar Inc data.
Regards,
Ted
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@rono & @mark:
I have been Long/Short CT&FL for the last few years...I short FL in the summer and CT in the winter. Dividends are:
- I never lose my tan,
-open toed shoes and
-fresh produce.
It's an apples and oranges kind of portfolio...very fruitful.
@charles:
50% state muni ETF or muni fund
50% VTI (Vanguard Total Stock Market)...adding state specific etfs might be a way of "goosing" sector weightings such as energy (TX, SD) or tech (CA,MA,NC) or trends such as boomer-nomics (FL, AZ).
The closest I have come to simplifying this idea in one mutual fund is USBLX which accomplishes this by combining national munis with a S&P index fund. It does this at a fairly high ER (1%). The fund advertises itself as a "growth and tax strategy fund" and M* categorizes it as conservative allocation.
Other question I have:
Are etfs treated like stock holdings when it comes to tax harvesting strategies...much like selling stocks to harvest losses?
Also, at death do etfs adjust their cost basis (like individual stocks) making them a better vehicle for inheritance than mutual funds?

@openice: Thanks for the heads-up. George has been with Royce for 23 years, and managed Royce Trust (FUND) that I owned on several occasions.
Regards,
Ted
http://www.roycefunds.com/people/whitney-george

@JohnChisum: I paid for the premium service for 1 year only and later switched to TRP's free offer of M*. so cannot blame M*, though I keep adding to my TRP holdings at every opportunity for last 7 years.

Sears down 9.55% today......Amazing volatility in this stock.

It's because the public float has shrunk so much that Sears was taken out of the S & P 500 a couple of years ago. Plus, you have 65% of the float short. It's basically a tug-of-war between Lampert/Berkowitz and assortment of fund managers with smaller positions vs the shorts.
Shares Outstanding5: 106.47M
Float: 49.44M
Shares Short (as of Oct 15, 2014)3: 17.35M
Short Ratio (as of Oct 15, 2014)3: 9.30
Short % of Float (as of Oct 15, 2014)3: 65.10%
Shares Short (prior month)3: 17.19M
http://www.marketwatch.com/story/sears-booted-from-sp-500-over-public-float-level-2012-08-29