FYI: T shares won't immediately revolutionize the financial-advisory industry but will ultimately be a positive for investors.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=787395

FYI: I will link episode as soon as it becomes available for free, early Saturday morning.
Regards,
Ted
January 5th, 2017
Dear WEALTHTRACK Subscriber,
Ed Hyman is cautiously predicting that the U.S. economy will grow a little bit faster this year and bring inflation and interest rates up along with it. As for the likelihood of recession, he believes it is several years away. This week, in what has become an annual WEALTHTRACK tradition, Hyman joins us for an exclusive two-part interview on the outlook for the global economy.
The founder and Chairman of Evercore ISI is a financial super star, having been voted Wall Street’s number one economist for 36 out of the past 37 years. His research is a daily must read for institutional investors all over the country if not the world.
Every year on WEALTHTRACK we also ask a top investment pro to join Ed, to put his macroeconomic outlook into investment perspective. This year another WEALTHTRACK regular, First Eagle Management’s Matthew McLennan is joining us.
McLennan is Head of the Global Value Team at First Eagle Investment Management, where he is also a portfolio manager for several funds, including the flagship First Eagle Global Value fund, which he took over from legendary value investor, Jean Marie Eveillard in 2008.
Rated Five Star by Morningstar, the Global fund is in the top decile or higher in its World Allocation category for the past one, three, five and ten year periods and is known for its above average risk adjusted returns.
This week our primary focus will be the outlook for the U.S. economy and markets. Next week we will concentrate more on international conditions, although we recognize they are all interrelated.
Hyman’s team expects the U.S. economy to pick up steam this year, forecasting real GDP- that’s excluding inflation- of 2.5% in 2017 versus an estimated 2% in 2016. They expect inflation to pick up as well, with the Fed’s favored GDP deflator measure rising from 1.5% last year to 2.5%. As for the Fed Funds Rate, they are looking for a sizable increase from around 0.60% to 1.35% by year-end.
The yield on the benchmark ten-year Treasury should rise half a percentage point from 2.5% in December to 3% by December of this year. And finally they expect profits to improve, estimating that the combined earnings per share of the S&P 500 companies will rise about 10% year over year.
Hyman is the first to admit that a lot can change between now and year-end, but eight years into an economic recovery he lists the mounting evidence of improvement, including his expanding list of American cities where business in booming.
If you miss the show on air this week, you can always catch it on our website. You can also view it on our YouTube channel.
As always, we welcome your feedback on Facebook, Twitter or via the Contact Us link on our website. We read all of your comments!
Have a great weekend and make the week ahead a profitable and productive one!
Best Regards,
Consuelo
Ed Hyman Video Clip:

That's correct. FWIW, here's M*'s explanation:
http://www.morningstar.com/advisor/t/105535457/tallying-up-the-cost-of-short-interest-expenses.htm?&single=true

Thanks, Kevin, I forgot about M*'s weirdness on ERs of some funds. For QLEIX, the M* expense page shows the ER as 1.35% from the 5/1 prospectus; comparing that to the actual figures in the 5/1 prospectus, it looks like M* left out the expense categories of dividends from short sales and acquired fund fees/expenses, both of which AQR counts in their ER figure.

Two share classes: QLEIX = TF + 1.27 ER; QLENX = NTF + 1.53 ER. Like Tony & msf said, they're available for reasonable minimums in IRAs at Fidelity -- that goes for both share classes, plus the similar but more short-biased Market Neutral, QMNIX and QMNNX.

$2500 @Fidelity in an IRA.

In a Fidelity IRA, the minimum investment is $250, but with a transaction fee of $49.95. Other brokerages listed here might have a better deal: https://finance.yahoo.com/q/pi?s=QLEIX+Purchase+Info

FYI: When you board an airplane, the one thing you don't want is a wide range of outcomes. If you're headed to Fort Lauderdale, you'd probably prefer not to land in Vladivostok. A trip that's supposed to end in New York City shouldn't end in Altoona.
Similarly, if you're choosing investments for your clients, you probably have reasonable expectations for those investments. In fact, much of the advantage of diversification is not increasing returns, but decreasing unpleasant surprises.
Regards,
Ted
http://www.investmentnews.com/article/20170105/BLOG03/170109978?template=printart
M* Long/Short Fund Returns: (Equity)
http://news.morningstar.com/fund-category-returns/long-short-equity/$FOCA$LO.aspx

Scott Blankenship, who is responsible for the firm’s sales and distribution of products offered through financial intermediaries, says that the fund will be available at all major brokerages but that "will take weeks and maybe months." Schwab might be first in line, he said. The fund is registered in all 50 states. GQG has no documents available on its site as of yet for downloading account applications or related forms, but you can receive them through their distributor SEI by calling 866-362-8333 and have them emailed if you want to buy the fund directly from them. Best.

Hi @MJG,
Thanks for posting as I found the linked article indeed good reading.
As a successful small retail investor I fall for it every year and make a forecast much like many others as to where the S&P will close at year end. This year is no different. My SWAG (Scientific Wild Ass Guess) for 2017 is 2475. It is computed by using a projected TTM Earnings for the S&P500 Index of $112.50 times the anticipated Ratio of 22. Do the math, that is about a 10.5% increase form 2016 year ending close of 2239.
Do I feel the market is currently overbought? Indeed, I do based upon my market valuation matrix. Can it stay this way? Indeed, it can for a good period of time as long as investors and market traders (Big Money) keep bidding up prices!
According to the article ... It is as good as any ... and, might be better than most.
Take care and have a Blessed New Year.
Skeet
Note: I reserve the right to change my forecast, at any time, like most analyst do as we move through the year.

"People never complain about funds outperforming when they veer from their stated investment philosophy."
Since we're talking about legal liability, note that in order to sue for damages, there need to be damages. Seems sort of obvious. So it really doesn't matter whether people complain or not if they haven't suffered monetary damages.
Unfortunately, you're probably right that the courts won't recognize misrepresentation unless huge losses are involved. See, e.g. Morgan Keegan:
http://www.zimmreed.com/case/morgan-keegan-lawsuit/
http://www.reuters.com/article/regionsfinancial-settlement-mutualfunds-idUSL1N0V211420150123
From the Reuter's article:

[T]he U.S. Securities and Exchange Commission and other regulators [charged] that Morgan Keegan fraudulently misled investors about the risks of several funds. ... The SEC claimed that Morgan Keegan hid the falling value of some funds ...

Not to worry. "Do your due diligence and you won't have those problems." Yup.

Hi Guys,
I am an engineer by temperament, training, and experience. I like smart folks, especially those that develop sophisticated investment prediction models. In his "The Money Game" book, Adam Smith concurs that an investor should seek advice from smart people. Of course, one issue is how to identify smart market participants.
One might suspect that carefully trained economists, who are hired by financial organizations, would nicely fit that framework. Maybe, but it's not that easy.
In the early 1990s I counted Elaine Garzarelli as one such market-wise forecasting hero. She had an elaborate macroeconomic computer model that accurately forecasted the 1987 equity meltdown. Since that famous forecast, her record has suffered somewhat. According to one scorecard, she is correct about one-third of the time. Anyone for a fair coin toss projection?
Equity returns forecasts for 2017 are presently dominating the media and investor exchanges. It's great sport, but it is highly likely that the projections are in serious error. The record, even for the most well informed cohort of professionals, is dismal. How dismal? Here is a Link to some research that was completed a year ago:
http://www.fool.com/investing/general/2015/02/25/the-blind-forecaster.aspx
The findings are consistent with similar studies. Predicting returns is a challenging assignment, and most fail the task. A blind forecaster just might equal the accuracy of these highly paid experts. The author claims that emotional factors control the outcome, and these are impossible to forecast. I guess that means we should all keep a heavy reserve to protect against the uncertainty of the markets, regardless of professional opinion.
Best Regards.

Bezos Got the Message Before the Tweet ?
DEALS | Wed Jan 4, 2017 | 4:43pm EST
Exclusive: Amazon, Forever 21 vying for bankrupt American Apparel - sources
Reuters sources interest out of Amazon (NASDAQ:AMZN), Forever 21 and others ahead of a deadline to submit offers for the bankrupt Los Angeles-based company set for this Friday.
http://seekingalpha.com/news/3233531-reuters-amazon-among-possible-american-apparel-bidders
By Jessica DiNapoli and Lauren Hirsch REUTERS
The bankruptcy auction of Los Angeles-based American Apparel, which made its branding theme "Made in the U.S.A", will determine the future of a major clothing manufacturing plant in California, one of the most expensive U.S. states in terms of labor costs.
Keeping jobs in the United States has become a hot button political issue since the presidential election. Ford Motor Co on Tuesday reversed plans for a $1.6 billion factory in Mexico and said it would add 700 jobs in Michigan after receiving criticism from President-elect Donald Trump.
Amazon and Forever 21, as well as California-based apparel maker Next Level Apparel and brand licensor Authentic Brands Group LLC, are in talks with American Apparel and its financial advisers about submitting offers ahead of a deadline on Friday, the people said
http://www.reuters.com/article/us-americanapparel-m-a-idUSKBN14O281

SFGIX (or SIGIX) is a very good option for investors who want EM with much lower-than-average volatility. It is one of a handful of EM funds with a positive 3-Yr Sortino Ratio. It will have a 5-Yr anniversary on 2/15/17 and will start showing up on a lot of radar screens. Fortunately, Andrew Foster will not hesitate to close the fund if asset flow is too much. It has the highest Alpha of the 40+ EM funds and ETFs we track. Because M* puts Singapore, Taiwan, Korea, and Hong Kong in the developed intl category, the fund appears to be less EM than some others. I really like this fund and its manager.

FYI:
Regards,
Ted
http://video.cnbc.com/gallery/?video=3000580972&play=1

Hi Old_Skeet. I appreciate your response. All the research I've done around bond "funds" is they do not act like a single bond purchase, and it does not matter if "you" hold the fund longer. Basically you are not holding the "fund" to maturity and likely either is the manager holding what he bought to maturity. Your mutual fund will go down no matter the duration. There are many articles saying the same thing and I attached one below along with a section referring to bond funds versus a bond.
I could be way off base about this (I am bond-illiterate but trying to understand) but I still think in simplification, as interest rates rise your short term bond fund will decline in fashion with negative return.
https://www.thebalance.com/how-bond-funds-can-lose-money-2466567

What Makes Bonds and Bond Funds Decline in Value?
Bond prices move in the opposite direction as interest rates. Here's why: Imagine if you were considering buying an individual bond (not a mutual fund). If today’s bonds are paying higher interest rates than yesterday’s bonds, you would naturally want to buy today’s higher interest-paying bonds so you can receive higher returns (higher yield). However, you might consider paying for the lower interest-paying bonds of yesterday if the issuer was willing to give you a discount (lower price) to purchase the bond. As you might guess, when prevailing interest rates are rising the prices of older bonds will fall because investors will demand discounts for the older (and lower) interest payments. For this reason bond prices move in opposite direction of interest rates and bond fund prices are sensitive to interest rates.
Bond funds work differently than bonds because mutual funds consist of dozens or hundreds of holdings and bond fund managers are constantly buying and selling the underlying bonds held in the fund.
As mentioned here previously, bond funds do not have a "price" but rather a Net Asset Value (NAV) of the underlying holdings. Managers also have to meet redemptions (from other investors withdrawing money from the mutual fund). So a change in bond prices will change the NAV of the fund.

I believe that NTF funds pay around .25-? in fees to the fund supermarket.

PTIAX - Performance Trust Strat Bd Fd
NAV: 22.36 +0.01
POP: 0.00
52 Week High: 23.09
52 Week Low: 22.21
Trans. Fee Fund: No
Sales Load: None
As of 01/03/2017
Initial/Additional both regular and retirement
Minimum: $100.00/ $1.00)
http://www.schwab.com/public/schwab/investing/investment_help/investment_research/mutual_fund_research/mutual_funds.html?path=/Prospect/Research/MutualFunds/Summary.asp?symbol=PTIAX

AMJVX is only 41% bonds. How does this fit with fixed income bond funds? M* classifies it as a 30-50% allocation fund.
Bonds: low duration to me just means you will lose less than longer duration. But you are still going to lose. I think you have to be in the sweet spot for bonds, which happens to be floating rate right now and likely the near term future. My largest bond fund holding right now is PFIDX, fwiw. Daniel Ivascyn is a co-manager on this fund. You can't get any better manager than that.

Yeah - I ran my own simulation and arrived at the same answer. Pretty much destroys everything I thought I knew about math. Still doesn't make sense to me - but never learnt much math after 8th grade. :) Thanks msf for the math lesson.
Base amount $100
Example 1:
Year 1 experiences gain of 30% = $130
Year 2 experiences gain of 10% = $143
Year 3 experiences gain of 5% = $150.15
Example 2
Year 1 experiences gain of 5% = $105.00
Year 2 experiences gain of 10% = $115.50
Year 3 experiences gain of 30% = $150.15
* Edit: In my (humbled) defense - and where I probably mis-learned something long ago - a lump sum dollar amount received early on (in say a pay scale) is more beneficial than the same amount received/contributed later on. Came up in contract negations once "many moons" ago.