In the Hotchkis & Wiley family of funds Old_Skeet owns HWIAX which is their capital income fund and it too owns most anything that it wants. Within this fund you will find many of the equity holdings that are also found in HWAAX. HWIAX pays a monthly dividend and has a yield of better than 3% while HWAAX pays annually with a yield of less than 1%. HWAAX is listed by M* as a 85+% equity allocation fund while HWIAX is listed as a 50% to 70% equity allocation fund. Years back, I chose HWIAX over HWAAX because of the higher yield and monthly distributions.

FYI: Old-school value investing demands both cheapness and a margin of safety against financial distress. But the hundreds of value funds on the market today have largely suffered in the past decade. Growth stocks have outperformed since the financial crisis, but that’s not the only factor that has held back value funds: Most own hundreds of stocks that either aren’t so cheap or are cheap for good reason.
David Green goes beyond the traditional metrics. “Just looking at a screen gives you only a snapshot that won’t tell you what a company will do in the future,” says the manager of Hotchkis & Wiley Value Opportunities fund (ticker: HWAAX). “It won’t tell you what a company’s competitive position is, or if it has some hidden liability. So, each company’s earnings profile is determined by our research team.”
Regards,
Ted
https://www.barrons.com/articles/this-value-fund-owns-anything-it-wants-51559830489?refsec=funds
M* Snapshot HWAAX:
https://www.morningstar.com/funds/XNAS/HWAAX/quote.html
Lipper Snapshot HWAAX:
https://www.marketwatch.com/investing/fund/hwaax
HWAAX Ranks #4 In The (85%+E) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/allocation-85-equity/hotchkis-wiley-value-opps-fd/hwaax

FYI: Imagine a savings vehicle that allows you, in retirement, to withdraw as much or as little as you wish—tax-free.
This vehicle, the Roth 401(k), is a great tool for many savers, as my colleague Laura Saunders has pointed out. Why don’t more people take advantage of it?
Regards,
Ted
https://www.wsj.com/articles/the-deal-hidden-in-your-401-k-11559917801?mod=searchresults&page=1&pos=1

FYI: With their defensive characteristics and strong free cash flows, infrastructure companies are worth a look for income investors—especially if we are in the later stages of an economic cycle.
Dividend growth for many infrastructure companies is “supported by businesses that have very predictable cash flows,” Ben Morton of Cohen & Steers (ticker: CNS) tells Barron’s. “These businesses tend to be regulated or concession-based.” An example of the latter is a toll road.
Morton, head of global infrastructure at Cohen & Steers, is a portfolio manager of the Cohen & Steers Infrastructure Fund (CSUAX). The fund’s top holdings recently included freight-railroad operator Norfolk Southern (NSC), cellular tower company American Tower (AMT), and utility American Water Works (AWK).
Regards,
Ted
https://www.barrons.com/articles/infrastructure-stocks-dividends-income-investing-railroad-utility-cellular-tower-51559767985?refsec=income-investing

FWIW: https://www.cnbc.com/2015/08/24/8-things-you-need-to-know-about-bear-markets.html
Aug 24, 2015 · In the average correction, the market fully recovered its value within an average of 10 months, according to Azzad Asset Management. The average bear market lasts for 15 months, with stocks .
Derf

https://www.google.com/search?q=what+we've+learned+about+target-date+funds+10+years+later&ie=utf-8&oe=utf-8&client=firefox-b-1-m
Enter News, Quotes, Companies or Videos
Target-date funds have emerged strongly from the damage of 10 years ago, but some advisers say their one-size-fits-all approach to investing isn’t suitable for every investor. Nicolas Ortega
Journal Reports: Funds/ETFs
What We’ve Learned About Target-Date Funds, 10 Years Later
A decade after target-date funds were damaged during the financial crisis, they have re-emerged bigger than ever as retirement investments. But they still have vulnerabilities.
By Jeff Brown
May 5, 2019 10:09 p.m. ET
Back in 2008, many investors looking ahead to retirement in two years had a shock when “target-date funds” designed for them plummeted in value. Many had assumed those funds, targeted to a 2010 retirement, were safe from large moves that late in the game.
Despite the jolt to investor confidence, target-date funds have flourished in the decade since, becoming a staple in workplace retirement plans such as 401(k)s, as a net $532 billion in investor money poured in during that time, according to data from the Investment Company Institute trade group.
Journal Report
Insights from The Experts
Read more at WSJ.com/FundsETFs
More in Investing in Funds & ETFs
Fund Fees Still Vary Too Much
How Much Cash in Retirement?
U.S.-Stock Funds Rose 3.6% in April
529s or Coverdells for College?
ETFs Dial In to 5G
Whether that is a good thing remains a matter of debate. Some financial experts question the value of target-date funds, saying their one-size-fits-all approach to investing isn’t suitable for every investor. Others say the funds can be a good way to save for both retirement and college—as long as investors pay attention to the products’ risk profile, fees and performance, especially as market conditions change.
Of course, the idea behind target-date funds, or TDFs, is to make investing as simple as possible by gradually adjusting to a more conservative investment mix as a target date approaches. As the default option in many workplace retirement plans, TDFs attract investors who don't want to choose and rebalance their own investments and may not be aware that the funds can still own lots of risky stocks close to and even after the target date arrives.
“There is a common misconception among many target-date holders that the portfolio is completely de-risked at retirement, and that simply isn’t true,” says Robert R. Johnson, professor of finance at Creighton University’s Heider College of Business in Omaha, Neb.
A big factor in that growth was Obama-era legislation that encouraged employers to automatically enroll new employees in retirement plans and use target-date funds as the default for those who don’t choose their own investments. Previously, investors who were inattentive—a notorious problem with workplace retirement plans—simply accumulated cash, which doesn’t provide enough growth to build a nest egg that will last for decades.
“It’s certainly a good thing” to use TDFs as the default, says Dennis Shirshikov, financial analyst at FitSmallBusiness.com, an advice service for small-business owners and managers. “This has brought a great deal of consistency to a retirement portfolio, especially since most investors with a 401(k) do not manage their investment actively.”
Another factor in TDF growth, Morningstar says, is the growing popularity of index investing as most TDFs invest in index funds, rather than actively managed funds. In 2017, 95% of new employee contributions to TDFs went to one relying on index funds, according to Morningstar.
Investors can buy target-date funds for their individual retirement accounts and taxable accounts, as well, and most big fund companies offer them. The biggest player is Vanguard Group with about $381 billion in TDF assets in 2017, 34% of the market, Morningstar says. Fidelity Investments had a 20.5% share, and the third-biggest player, T. Rowe Price , TROW 1.89% had a 14.9% share.
The downsides
Retirement experts have mixed views about TDFs’ value in a portfolio. Most say TDFs are better than not investing at all, or putting retirement savings in cash, but the funds can’t take into account each investor’s unique situation. Two investors the same age would get the same fund, even if they have different needs due to dependents, availability of other assets, life expectancy and risk tolerance.
“In an attempt to simplify planning and saving for retirement—certainly a noble endeavor—the entire concept of target-date funds likely is a bridge too far,” Prof. Johnson says. “Individuals are unique, and one parameter, the anticipated retirement date, cannot and should not dictate the appropriate asset-allocation mix and the change in that mix over time.”
Another concern: The automatic investing strategy ignores changing conditions. Patrick R. McDowell, investment analyst at Arbor Wealth Management in Miramar Beach, Fla., says low bond yields in recent years have reduced TDF income after the target date, and increased the risk of losses on bondholdings if rates rise. (Higher rates hurt bond values because investors favor newer bonds that pay more.)
What’s more, he says, stocks and bonds have often moved in tandem in recent years, reducing the benefit from diversification, which assumes one asset goes up when the other falls.
Know your rights
Retirement savers who are automatically put into TDFs have the right to switch to other funds in their retirement plan as they learn more or conditions change, and Mr. McDowell recommends that investors get more involved as retirement nears. He says he often recommends investors nearing retirement leave the target-date fund and buy a mix of stock and stable-value funds—which contain bonds insured against loss and are designed to preserve capital while generating returns similar to a fixed-income investment—to reduce danger from a potential market plunge.
Advisers urge investors to examine the TDF’s ‘glide path’—its investing policy for shifting from stocks to bonds over time. Photo: iStock
“In that strategy, a big drop in equity and fixed-income prices won’t hurt a soon-to-be retiree in the same way it would in a TDF strategy,” he says. “It also helps investors defend against a rising interest-rate scenario” harmful to bonds.
Experts say TDF investors should keep abreast of performance and not just assume they are on track to a comfortable retirement. Morningstar provides data on average performance by target date, as well as details on individual funds.

The link: https://www.wsj.com/articles/what-weve-learned-about-target-date-funds-10-years-later-11557108540
But it requires subscription, so all I learned is target date funds have vulnerabilities.

Hey guys,
Is there a way to back-test a funds positions? Let's say I wanted to look at the top 5 positions of a fund and track that against the S&P 500. Any sites that do that? Thanks!

@MFO Members: I have always recommended an emergency funds of six months worth of living expenses.

From the article:
"Most people are familiar with the idea of having an 'emergency fund' during one's working years—a pot of money (typically, equal to three to six months of living expenses) that can help with unexpected bills or, perhaps most important, tide you over if you lose your job."
If a function of emergency cash is to tide you over until you get your next job, how long until your next job in retirement?
Many people seem to conflate two questions: how much cash should I keep for an unexpected emergency, and how much cash should I keep in retirement to protect against sequence of returns risk?.
For example, I was reading an old WSJ column where a couple with adequate pension income asked about putting all their IRA money into an S&P 500 fund. The response was that given the situation, that would not be unreasonable.
The column didn't address what size emergency fund they might also want to keep. ISTM that they would have the same need as working people - a reserve for some unexpected expense that their cash flow (here, pensions) didn't cover.
For people without steady income streams that cover all expenses (i.e. typical retirees), it's a different question as to how much cash to keep. Buffett's 10% short term treasury/90% S&P 500 implicitly suggests 2.5 years of "near cash" (10% @ 4% drawdown/year). I'd be inclined to go a bit higher and/or use bonds as a second tier resource between cash and equity investments.

@hank Hank, your advice is extremely sensible. Sometimes its helpful to remind others about good, solid market strategies that hold up over time.
My issue is related to the last item you just mentioned, RISK TOLERANCE. A lot of investors think they can ride out a bear market (or even just a bad correction). But many of those investors turn out to be wrong. Investing is so emotional for many of us. Its hard to sit by and watch your Account Balance go down the tubes. Its easy to say "oh yeah, I can handle it". Hard to do.
As an official "chicken little", I've (incorrectly) gone to cash more often than I want to admit over the years. Though I am shy of my 50s, I am personally still all about preservation of capital. Combine this president, with his "Tariff policies", alongside a very, very long bull market...... and I am once again a "chicken little". I own some bonds, which also seem inflated but are riding a wave for now, and I will build up my VWINX holding, but I am mostly in CASH.
This time, it looks like I have an awful lot of company. I believe Cash was the best Asset class of 2018. Will it come in 1st again in 2019? Doubtful.
And so we gamble.
P.S. I'll keep at least one of my eyes wide open from now on.

So Hank....just close your eyes and hold on. The market will always be ok long term. Steady as she goes. Tune out the noise. We can't predict the short-term, so why bother.

@JoeD, I wasn’t giving investment advice. Just trying to share a few personal observations and reflections re markets and investor sentiment gleaned over the years - since that’s where @Junkster appeared to want to go with this. (Closing your eyes when moving is probably never a good idea. Might run into an immovable object.)
But here’s my take on risk exposure / market timing:
- Depends on what you’re buying or holding. Treat your equity or high yield stake as one part of a wider investment universe. Don’t overlook investing in a home, maintaining a cash reserve, having a pension or annuity for steady income, investing in your own business or education, etc.
- Depends on your time horizon. For a 25 year-old who won’t need the money for 40 years I think putting 100% in a good global growth fund makes a lot of sense. He / she has time to ride out several market cycles. For a retiree I’d suggest a more conservative approach.
- Depends on your skill set and past experience. Some people have a knack for timing various types of markets. If you’re good at that (only you would know) go for it. However, for most of us, market timing is a somewhat flawed endeavor. The reason may be that markets can remain irrational longer than most of us can remain solvent. Another reason might be that it’s pretty hard to sort out the really pertinent facts from all the noise coming at us from many different directions.
- Depends on your own tolerance for risk. That’s not just your emotional make-up, but also how soon you may need the money and what you intend to do with it. For some of retirement age, an all bonds and cash approach might make sense. It should protect against large or unexpected losses. But it might not protect against rising costs of living or afford the life style one might prefer.

Mama portfolio 25+%cash

Mr. Obvious.

That depends on whether you want to support a fascist or not with your capital:
https://washingtonpost.com/news/theworldpost/wp/2018/06/25/erdogan/?noredirect=on&utm_term=.40604f7380a4
The question is when does investing in a regime become immoral to each individual investor? Would you own German or Japanese stocks in 1940, even if the return prospects were great? I don't buy the argument that politics or ethics don't matter in investing and that all that should matter is profits. Investors made a conscious choice to divest from South Africa during Apartheid for good reasons. How about a highly profitable manufacturer of Sarin gas or child pornographry? Where does one draw the line? Each must make his own ethical bed and sleep in it. I'm not saying these questions are easy or even have a universal answer, but they should be asked.

So is this economy more Goldilocks ...or..... Alice in Wonderland?

Sounds about right so far YTD. This reminds me of 1995 where bonds of all stripes and colors (both risk on and risk off) and the S@P have been so concurrently strong.
@Hank, great post!

FYI: In 1996, I took a "Money and Banking" seminar from a British professor who had previously worked at the Bank of England. He left me with two abiding lessons. One was that the leading central banks are powerful, but the marketplace, when unified, is stronger yet. (He had been on the receiving end in 1992, when the market's short sellers forced the British government to devalue the pound.) The other related moral was that hyperinflation is just around the corner.
Regards,
Ted
https://www.morningstar.com/articles/932511/fixedincome-investing-when-inflation-is-dormant.html

FYI: Should I hold a cash reserve in retirement? If so, how much? And, if you’re willing to share, do you have a cash reserve as part of your retirement savings?
Regards,
Ted
https://www.wsj.com/articles/how-much-cash-should-you-hold-in-retirement-11556805424?mod=article_inline

“Many investors seem braced for turbulence ahead and are in a defensive mode.”
Isn’t that always the case? We as investors tend to focus more on the potential for loss more than on longer term gains. You can go back 5 or 10 years and find people “going to cash”, “harvesting profits” or “adding some dry powder.” - Same old ... Same old ...
“The headline news seems so pessimistic.”
Journalism thrives on the “sensational”. That’s how they attract viewers, readers and clicks on their websites. But it’s not all bear case out there. Maybe we just pay more attention to the bears?
“Inverted yield curve” - Often a precursor of recession. Tends to lead by 6 months to a year. But in an era of “wacko” 2% on 10-year Treasuries, the invert may not be the reliable indicator of the past. Still, ignore it at your own peril.
“crashing oil prices ... “ Perfect example of media over-hype. Oil’s had a great run since it bottomed at $26 three years ago. So a 10% - 20% pullback is normal in any market.
“Chinese tariffs and their negative effects on corporate profits much less what happens if tariffs go in effect on Mexico” A tariff is (plain and simple) a tax - coming out of consumers’ pockets and going into government coffers. And, generally speaking, raising taxes quickly is a good way to tank an economy.
“But stocks remain resilient ...”
The Dow and S&P have gone nowhere in a year. And the NASDAQ is probably lower. But of course there are many winners that bucked the trend.
“junk bonds but 3/4% (0.75%) from all time highs”.
Tight spreads should be a warning that risk appetite is reaching dangerous levels. A better time to buy riskier bonds is when the spread is wider. @Junkster understands this better than I do.
“The later (narrow spreads) especially makes no sense if you believe all the experts who keep predicting the next crisis will come from that segment of the market.” To the contrary ... “reaching for yield“ is sometimes an indication of over-exuberance. Comes with the territory. However, the larger factor here may be the ridiculously low yields on investment grade debt. If you need income, there’s really no place to go but into higher yielding securities.
“rates have moved lower”
True. And 2% for locking-up your money for 10 years makes no sense unless you are factoring in a major economic slowdown and declining value for risk assets.
“the Fed is expected to lower Fed funds in July or September.”
Likely the Fed is reacting to the political arm-twisting. If they lower rates it should goose the economy for a bit longer. But could exacerbate the next downturn when it finally arrives.
“But isn’t that good news already baked into the bond market?”
Yep - The big money (often smart money) is usually a few steps ahead of the rest of us. And the data they have (can afford access to) far exceeds what you and I have at our disposal. Also, while insider trading is illegal, it’s not unheard of.
“I would think knowing how counterintuitive investing/trading can be that new highs may be ahead for the S&P. “
No way to tell. But unless you assume these indexes always reflect rational decision making executed by always rational investors (I don’t think they do) why dwell on where the index will be in six months?
“But this may be all mute with tomorrow’s employment report providing its usual fireworks ....”
You nailed that one. Bloomberg and the others are all over this story.
“... and providing more clarity”.
It’s hard for me to understand how one payroll report provides much clarity on anything. It might. But it might also just reflect the effect of weather on consumer spending in many parts of the country.

Yup - decent fund. Though at 40% leverage, not sure how comfy I'd be throwing $$$ into it ... although I didn't own many leveraged products myself, the GFC was an eye-opener in that respect, at least for me, and I try to keep leverage in my CEF holdings to under 25%.

VMO also pays a 5% tax-free dividend, which is equivalent to an 8% yield for some taxpayers.

VMO also pays a 5% tax-free dividend, which is equivalent to an 8% yield for some taxpayers.