First link, zippo !!
2/nd link , it brings tears to my eyes, to think of all the extra I paid in fees over the years. Good read if you're just getting started in 401-k's
Have a great week, Derf

While the study's general conclusion is correct (few funds land in the top 25% every single year), it has from my perspective four serious problems.
1. The baseline period is March 2009 to 2010, which is to say they looked at the funds that had the greatest returns coming off a profound market bottom. The broad market return in those 12 months was 56%.
2. By picking a mid-year measurement period, they make it hard to test their conclusions since few public data sources allow you to screen for periods other than calendar years and trailing periods
3. There's no explanation for why the metric is reasonable. Few funds land in the top 25% every year, without exception. (a) Duh. (b) Who cares? If, hypothetically, a market is frothy and valuations stretched, do you really want a fund that's at the top of the heap? If you "win," by whatever standard you use with your portfolio, more often than you lose, does the "not every year" thing have any meaning?
4. S&P, author of the study and writer of indexes, uses the paper to justify investing in index funds. And so, we ask, how many index funds satisfied the researchers' criteria? That is, if the test is "top quarter every year," which of their preferred vehicles meet the standard? I suspect I can count the winners on the thumbs of one foot.
Just grumbling,
David

Maybe I can say this better than what I posted and deleted over the weekend. If you held this fund since inception you are ahead of the S&P. But besides being -4.54% YTD it has also underperformed the S&P by 8.12% and 6.65% per annum over the past three and five years respectively. Yes, I know its benchmark is not the S&P and I realize we have been in a long term bull since March of 09. But retirement and old age comes quicker than you might think and looking back in my younger years I would have hated to have been stuck in such an underperformer to the overall market over the past many years. Not my idea of building long term wealth. Then again, I admit to be biased against all these alternative/bear, and long/short funds that have sprung up out of nowhere since 2000.

A lot of dire forecasts for junk bonds in the various links of Ted original link above. Here's some more negative comments, these coming from Michael Aneiro's column in this week's Barron's. Mr. Aneiro has been a regular Cassandra on junk bonds for well over a year now. You know the broken clock analogy, so maybe Mr. Aneiro's time has finally arrived.
>>>Among current pockets of risk, as I've warned in this column before, is the corporate bond market. Not only are corporates rich, but they can also be harder to sell than they were just a few years ago. Since the financial crisis, banks have cut their corporate-bond holdings to keep pace with regulations. Inventory is down by 40% to 75%, according to various estimates, and if there's ever a rush to sell, fewer willing buyers could mean steeper losses, affecting bonds, mutual funds, and ETFs alike.
"THERE'S NO QUESTION that liquidity has decreased," says Gershon Distenfeld, director of high yield at AlianceBernstein, who says increased capital requirements have curtailed risk appetite among banks and dealers and made it more costly to maintain bond inventories. He adds that Bear Stearns, Lehman Brothers, and Merrill Lynch used to represent more than a third of U.S. high-yield trading volume, and none of them exist as a stand-alone entity today.
Fixed-income trading at banks "is evaporating," says James Swanson, chief investment strategist at MFS Investment Management. He sees corporate bonds, particularly high yield, as increasingly perilous for investors. "Are those markets, given how low yields are, compensating you for the risk of illiquidity?"
Corporate bonds are often pulled in two directions: When equity prices fell amid last week's turmoil, riskier corporates slid, too, but the losses were tempered by gains in underlying Treasury bonds. That pattern can hold up for short periods but will be challenged during more protracted downturns, especially if nobody really wants to buy.<<<

If you believe, as MFLDX manager Michael Arronstein does, that the Fed has screwed up again and that we are overdue for a correction, or even if you do not agree, the fund is designed to be a contrary holding. There are times it will underperform (like the last 12 months). Arronstein is net short on bonds, short emerging markets, consumer staples, utilities, and the euro. A very high "cash" position, too. I am not one who expects all of my holdings to perform in a similar manner. MFLDX has been a terrific long-term hold, and I would not be too hasty in bailing just because it is underperforming now. The manager has made some pretty incredible calls over the years, and the fund uses a macro-economic overlay in helping to make decisions. While I am not a fan of the big inflow of dollars to the fund, I am willing to give Mr. Arronstein considerable time. If he is right, the fund will look darned good in a correction.

Balanced is good. Contrarian has done very well with the new manager. The Perkins funds are fine. Overseas was hugely successful for a while but has tanked in recent years. Other than that....?

I sold it 3 months ago. I was concerned about asset bloat affecting its performance. Asset bloat or bad macro moves, either way it was performing poorly and I lost confidence in the fund. It was a tough decision, as I have had it for several years, but I began to see little reason in keeping it and I think I made the right decision.

Hello,
I am a holder of MFLDX and I have been pleased with its performance up until the last twelve months where it has now returned less than 1% positive over this period. I am wondering ... Has the fund become too large for its manager to make good macro moves? Or, has he just made some bad macro moves? I have been thinking of letting it go ... but, wanted to poll what the thoughts of others might be. I let IVY Asset Strategy go several years back because I felt it had become too large to effectively position. So what be your thoughts?
Old_Skeet

Hi JohnN,
Thanks for posting. Being retired I am now finding myself away form my computer more often and for longer periods of time. I have, through the years, found good value in Mr. Rowland's newsletter and use it as an aid, at times, to help position part of my equity allocation within my portfolio.
Please take over and continue to post it weekly.
I wish all ... "Good Investing."
Old_Skeet

VF,
I've held CIPSX since 2006, and I was happy for a while (especially in '08!) but I have been thinking of selling as part of a general move to lower my equity exposure a little and consolidate into fewer funds. Could you give me the reasons why you're a Champlain fan? I'm sure your reasons are excellent, which is why I'd like to hear them in case they convince me to hold on and sell off another fund instead.
I haven't minded that CIPSX underperformed the wild bull over the past few years, but I am disappointed that in this year's mild downdraft for small caps it hasn't held up better. Downside protection is what it's supposed to be a good at. But hey, no one's perfect, and a few months and a few points of underperformance isn't a biggie in you believe in the management.

@MFO Members: Sorry to hear about the passing of James Wang, but the sad truth is the fund also died over the last three years.
YTD: 100 Percentile
One Year 100 Percentile
Three Year: 93 Percentile
Regards,
Ted
OSFDX Returns: http://performance.morningstar.com/fund/performance-return.action?t=OSFDX&region=usa&culture=en-US
MFO Slant;
http://www.mutualfundobserver.com/discuss/discussion/7886/oceanstone-fund

MAPIX is 60% developed markets (ie Japan, Ausralia) so IMO it's rather weak tea for an EM holding.
No one has mentioned FNMIX, which has done very well for me.

I track FNMIX and concur that it is a great choice. I keep forgetting that MAPIX has morphed into a more developed-Market look and feel over the years. But if it works, don't fix it.

Fascinating. For two years, at least, maybe meaning not much, maybe a lot, it is equaled by DODIX, is outdone by FSICX, and trounced by PONDX and PDI (perhaps not fair comparisons, I guess). So what's the big deal here?

do not follow some newsletter
'get creamed'? do you care? does it matter?
if you don't need to touch it for many years, put it all now into SCHD, PKW, FSCRX, FLVCX, and some global thing you like, say VEU. 15/15/25/15/30. If that feels worrisome, then a third now, a third Oct 1, and the rest New Year's, same proportions.

My favorite EM fund was a suggestion from BobC, ODVYX. I've owned it for a few years now. It's one of the best downside protection EM funds around. Alas, it's closed to new investors. Another favorite (but not really an EM fund) is GPGOX, It is really a small cap global fund with most of it's exposure in developed markets. For Asia exposure I've held MACSX for many years - again, per M*, not really EM, mostly developed markets.

catch22,
Good to see you around again.. Here are the answers. I am looking for ideas/suggestions on the three strategies I mentioned (or any other strategy for that matter) - DCA the whole amount over 18 months, wait for a correction and then start DCAing in, or follow a newsletter. Looking forward to your and other's opinions.
-B

Howdy @Bhopali
--- What are the 10 funds you now have and what percentage of each, for your total holdings?
OSMAX - Oppenhiemer Intl Small (12%), PRFDX - T Rowe Equity Income (20%), VFINX - Vanguard 500 (13%), VIMSX - Vanguard Mid Index (10%), VISGX - Vanguard Small Index (20%), DODFX - Dodge and Cox Intl (10%), PRNEX - T Rowe New Era (5%), PRMSX - T Rowe Emerging (5%), PCVAX - Allianz Small Cap Value (5%)
---Are all of your current fund holdings in tax sheltered accts (IRA's, etc.)?
Currently, about half is in sheltered and other half in taxable
---Will all of this new money have to be invested in non-tax sheltered accts; or are you able to invest some of the monies into a Roth IRA?
All of it will be in taxable.
---Do you currently invest monies into a 401k, 403b, etc.?
Yes. 401k and Roth
---There are those here who frown upon any advisement being given by strangers via a discussion board on the internet.
I understand. I am looking for suggestions. Fundalarm, and now mutual fund observer, has been my source of ideas for 10+ years. I don't post often but usually do when I want suggestions...
For all practical purposes, consider whatever advisement you may be provided; to constitute.............suggestions for consideration.
Regards,
Catch

Hi,
Congratulations on your windfall. I had an inheritance to invest a few years ago and I decided to use the portfolio suggestions at Maxfunds (www.maxfunds.com), click on the PowerFund Portfolios link. They have a more aggressive one and a more conservative one. They seem to have a good sense for when to make changes to the portfolio (maybe once a year), though sometimes are a bit early. Then I sometimes tweak a bit by using Mutual Fund Observer to find a better fund in some of the categories -- this gives me another couple of percent of return.
Good luck.
lrwilliams

Gurus,
I am posting after a long time. Need your help! I have had the good fortune of a long due (non stock) investment cash out finally! I am trying to figure out if now is a good time to invest it in the market, especially given that this bull is already 4 years in the running. Here is my situation:
1. Age: 40
2. Tolerance for risk: High (weathered the 2001 and 2008 crashes as buying opportunities)
3. Overall current portfolio: well diversified with approx 10 funds.
4. New money: About 2X than current portfolio.
The options I am considering are:
1. DCA in the current portfolio over next 18 months. However, this can be risky as the bull is getting old so if we do have a major correction in 6 months, I would get creamed on a large part of my investment.
2. Sit on cash till a major correction (15%+) and then put 50% of the new monies in. DCA the remaining over next 12 months.
3. Get a good investment newsletter and start following it to the tee (any suggestions?).
What would you do in my situation? Any good newsletters that you live by?
Would really appreciate your counsel.
- Bhopali

FYI: Copy & Paste 7/16/14: Dimitra Defotis: WSJ
Regards,
Ted
H. Kevin Birzer of the Tortoise MLP & Pipeline Fund has averaged 24% annual returns over the past three yrs.
For investors looking for income and an energy allocation, the Tortoise MLP & Pipeline Fund has performed like a hare.
The mutual fund (ticker: TORTX ) boasts one of the top performances among an increasing variety of funds that invest in master limited partnerships, those energy pipeline and infrastructure assets with rich, tax-deferred yields. But the fund owns regular energy corporations, too, and the combo has produced a three-year annualized return of roughly 24%, and a 36% total return in the past year, well ahead of the Standard & Poor's 500 Energy Index and the benchmark Alerian MLP Index.
The fund's five co-managers look for businesses that produce double-digit cash-flow growth and collect steady fees. And with gushers from American oil-and-gas fields filling pipelines coast to coast, the fund's relatively low dividend should continue its recent growth spurt.
We asked co-manager H. Kevin Birzer to talk about picks and risks. Birzer co-founded Tortoise Capital Advisors, which is one of the largest MLP asset managers and is based in Leawood, Kan.
Barrons.com: How do you choose winners?
Birzer: It comes down to: Do these assets have to exist? Second question is: Do they have the right management team? Third, we don't want a lot of cash flow volatility risk. We look at the nature of the assets and the contract structure. Refiners have huge volatility. A pipeline, on the other hand, generally gets paid for transporting the product into the refinery and out of the refinery based on volume. There has been a heck of a lot of activity with the shale plays, and pipelines tend to be the cheapest, easiest way to get those hydrocarbons to market.
Manager's Bio
Name: H. Kevin Birzer
Age: 54
Title: Co-founder, Tortoise Capital Advisors and co-portfolio manager, Tortoise MLP & Pipeline Fund
Education: B.S., University of Notre Dame; M.B.A., New York University
Free Time: Reading, co-founder and volunteer with The Giving Grove, a Kansas City nonprofit that develops inner city edible tree gardens
Q: What names do you like?
A: Our top holding today is Spectra Energy ( SE ), a large, diversified pipeline company that is investment-grade rated and has a $28 billion market capitalization. They own Spectra Energy Partners ( SEP ), an MLP. Spectra Energy has a great footprint of assets. Its Texas Eastern Pipeline goes from Texas up to New York City carrying natural gas right smack dab through Pennsylvania, where the Marcellus Shale has gone from virtually no production to about 12 billion cubic feet per day. Nearly 20% of the U.S. supply of natural gas now comes through Pennsylvania. It is just crazy how this has changed over the last five years. Spectra is in the process of making that pipeline bidirectional, to reverse gas from New York and take it back to Tennessee or other parts of the country. That is a great asset. Spectra also has a valuable pipeline from Canada's oil sands that extends to Missouri. They have about $20 billion in pipeline growth projects [with] pretty good commitments up front for both return of your capital as well as return on your capital during the contract period. That means low risk. Spectra can grow its distributions at about a 10% rate for many years to come. It yields about 3%. Probably 14% [annual] returns over the long term.
Q: Will pipelines become obsolete as oil and gas production dwindles?
A: In some cases, yes. There are some pipelines that are so, so strategic and they are sitting on a gold mine. Spectra's pipelines are sitting on some gold mines.
Fund Facts
(as of July 10, 2014)
Tortoise MLP & Pipeline Fund (TORTX)
Assets: $1.8 billion
Expense Ratio: 1.33%
Front Load: 5.75%
Annual Portfolio Turnover: 25%
Yield: 1.2%
Source: Morningstar
Q: Spectra stock is near a 52-week high. How much upside is there?
A: We have added to our position over time, from $25, and it is near $42 today. As a long-term investment I think it is a strong buy. We do a long-term, discounted cash flow analysis. No matter how you slice and dice it, you end up with: the current yield, yield growth, and visibility into that growth. In New York City, you are not going to heat your home this winter if Spectra doesn't exist.
Q: What other names do you like?
A: Williams Cos. ( WMB ), a corporation, as opposed to Williams Partners ( WPZ ), the MLP. It operates 15,000 miles of interstate gas pipelines, more than 10,000 miles of oil and gas gathering pipelines. It is a pure play general partner on Williams Partners and Access Midstream Partners ( ACMP ), which are to merge. Williams got rid of a lot of its exploration and production assets. They now have one of the biggest gathering and processing businesses in the country. Williams has a footprint in all the big plays in the country except the Bakken. It is an investment-grade-rated company with $40 billion in market-equity capitalization. They are just getting paid for moving products from point A to point B; about 80% of their business will be fee-based after the merger they are doing.
Q: What would be the case for buying it here?
A: Similar to Spectra, yield plus growth. The company says it can grow cash flow 15% annually every year between now and 2017. Williams Cos. has a 2.9% yield and if you add 15% growth, you have upper-teens returns. This isn't a trade, this is a long-term investment.
Top 10 Holdings
(as of May 31, 2014)
Spectra Energy (SE)
Williams Cos. (WMB)
Oneok (OKE)
NiSource (NI)
EQT (EQT)
Enbridge (ENB)
Plains GP Holdings (PAGP)
Enterprise Products Partners (EPD)
TransCanada (TRP)
Pembina Pipeline (PBA)
Source: Tortoise Capital Advisors
Q: Why aren't we talking about price-to-earnings ratios?
A: We can talk about P/E, we can talk about enterprise value to earnings before interest, taxes, depreciation and amortization (Ebitda), we can talk about discounted cash flow. In my mind this is one segment of the world where just talking about yield and growth is the best proxy for returns.
Q: Another pick?
A: Oneok ( OKE ) is the general partner, a corporation, that controls what happens at the master limited partnership, Oneok Partners ( OKS ). Two different legal entities, but their assets are extremely closely tied.
Q: The general partner gets a rising percentage of the distribution. What else do you like about Oneok the corporation?
A: About two-thirds of its business is fee-based -- very low risk and a great investment. And, they have a big footprint in the Bakken shale, unlike Williams and Spectra. They have about $2 billion in their construction backlog and $3 billion to $4 billion in unannounced projects. Their market cap is about $14 billion. They think they can grow their distribution at least 10% per annum for the next several years. I get a mid-3% yield with 10% growth. So 13% returns is a heck of a good story.
Q: You see big opportunities in the Permian basin in Texas. Who benefits?
A: Plains All American Pipeline ( PAA ). We own the general partner, Plains GP Holdings ( PAGP ). Plains probably touches 20% of the crude oil in our country every single day. If Plains All American didn't exist, you'd have a problem. Plains also happens to have this great footprint in West Texas. As new pipelines are built, Plains benefits.
Q: Barron's has questioned how MLPs account for maintenance capital expenditures, including Kinder Morgan ( KMI ), which Tortoise owns. What are your thoughts?
A: You have to be careful: What makes up that distributable cash flow is operating income or Ebitda. You start with Ebitda, you back out interest expenses or your debt burden, and you back out maintenance capital expenditures. That leaves distributable cash flow -- what's available to pay out. There could be an inherent conflict of interest: Management may want to skimp on maintenance capital expenditures because that would increase what is paid out -- distributable cash flow. If a management team is trying to cut corners, cut the maintenance capital expenditures, you could have an issue. We ask: Have the companies reinvested appropriately? Have they accounted for it appropriately? Have they disclosed appropriately to investors? We invest in managements that are running assets for the long term.
Q: What else do you worry about?
A: Interest rate risks. Broad economic risk. The re-plumbing issue: There are basins that probably aren't as valuable anymore. The Haynesville three to five years ago was a hot natural gas play, but it is not as economic to get natural gas out of that area today with natural gas prices in the range of $4.50 to $4.75 per million British thermal units. To get Canadian oil sands out of the ground, oil needs to be priced at $70 to $80 a barrel. If oil prices drop to $70 or $80, you may not have a whole lot going on in Canadian oil sands. I worry about regulation, especially tax changes but also about fracking. I worry about what is allowed as an MLP asset.
Q: What kind of returns do you expect from pipelines in 2014?
A: Our expectation from the day we started this company 12 years ago until today really has not changed a lot: low double digits, 10% to 14%. Ten years ago I would have said yields of 6% and distribution growth of 4% to 6%. Today, I probably would say lower yields, probably 4%, but higher growth and 10% to 14% returns long term.
Q: Thanks.
M* Snapshot Of: TORTX: http://quotes.morningstar.com/fund/f?t=TORTX&region=usa&culture=en-US

My thought:
After funding a (pension/social security/annuity income stream) which provides enough income to pay your month bills then,
- set aside 1-3 years of income and invest conservatively for emergencies, special expenses, and periodic buying opportunities (due to downturns in the markets).
The remainder of your portfolio:
Let the rest ride in:
- a fund like PRWCX (a managed 80/20 fund)...no rebalancing needed or,
- continue rolling out into the future with retirement dated funds that have an 80/20 make up or,
- just own individual index funds that provide an 80/20 allocation and rebalance periodically.