FYI: The MSCI Emerging Markets Index is up 14.8% this year through August, including dividends, while the S&P 500 is up 7.8%
Regards,
Ted
http://www.investmentnews.com/article/20160902/BLOG09/160909987?template=printart

MFO profiled QUSIX here: http://www.mutualfundobserver.com/2015/02/pear-tree-polaris-foreign-value-small-cap-qusoxqusix-february-2015/
That said, if you like the thinking behind QUSIX, you might be more interested in their global strategy PGVFX: http://www.mutualfundobserver.com/2014/12/polaris-global-value-pgvfx-december-2014/
WAIOX has been a successful fund for a long time, defying its very high expenses.

Robert Cochran's column, in its use of mean reversion and inflation/real return, has left me befuddled.
"Reversion to the mean" simply expresses the tendency of next year's returns to be closer to the long term mean than the current year's returns are.
Underlying mean reversion is the assumption that each year's performance is independent of the previous one's. That is, mean reversion applies to random variables.
Assuming a long term mean of 9-10% for stocks (as stated in the opening sentence), and assuming 2016's return comes out about 12% (extrapolating from 8% YTD), mean reversion suggests that it is more likely next year's returns will be lower (closer to the mean of 10%) than higher (further from the mean). That's all.
Many prognosticators suggest that stock returns going forward will average around 4-5% (with an assortment of solid reasons backing this up). Mean reversion would seem to cut against this, as it implies, quite literally, reversion (coming closer) to the mean of 10%. IMHO this just shows that mean reversion doesn't apply here - yearly returns are not random variables.
Regarding real returns and inflation - if inflation is assumed to run at 2-3% (it isn't now, but it is expected to increase), then SS should also increase in nominal terms 2-3%, not the 1% projected. In real terms (as measured by CPI-W), SS payments do not decrease.
The 5% average figure for bonds over the past 15 years suggests that "bonds" means 10 year bonds. See here (geometric average over past ten years was 4.71% for 10 year bonds). That same source also shows an average near 5% (4.96%) for the past 85 years. Arithmetic averages are similar, though slightly higher (a small fraction above 5%).
So it seems fair to use last century's (100 year) average real returns for 10 year bonds as "normal" returns. That average real return was around 1.6% in the US:

If you prefer, 1.7% real return for 1900-2002 (based on Shiller data)
So I don't understand what the big deal is about a 0-2% real return going forward. That sounds about normal.
If anything, achieving typical real returns with lower nominal returns and lower inflation is beneficial to fixed income investors. That's because taxes are based on nominal returns, not real returns. So achieving the same real returns and paying less in taxes (lower nominal returns) seems like a plus.
In the broad picture, I agree with the expectation that both stock and bond returns will be lower going forward. But not as explained. Stocks may violate mean reversion (i.e. overshoot the mean on the low side, rather than simply dropping closer to the mean). Parallel increases in prices and rates would keep bond real returns closer to zero.

Umm ... From my grad school years I recall having to read a hellova lot over short periods. Some days I never left the dorm room or dressed beyond a pair of underwear.
So, while not sure about 500 pages a day, I do know you can consume a voracious number of pages if you really set your mind to it and otherwise exclude having a life.
:)

Since Aug 2011, SCMFX could have been substituted with a fixed portfolio of ETFs: ~47% IJJ, 20% XLB, 8% XRT, 7% IGN, 7% PJP, 7% UUP, 5% FXL. Through Jul 2016, the ETF portfolio produced a ~23% higher cumulative return with a slightly lower volatility.
Similarly, SPMIX could have been substituted with an ETF portfolio of ~46% IJK, 44% IJJ, 5% FTC, 3% FNX, 3% IVOO, which by Jul 2016 produced a ~2% higher cumulative return with a slightly lower volatility. See goo.gl/2Z3V5Q

From Aug 2013 onwards, you could have substituted MSCFX with a fixed portfolio of ETFs: ~34% IJR, 15% PSCT, 13% KRE, 7% SLY, 7% FXR, 7% VPU, and a few smaller positions, of comparable return and smaller volatility. See goo.gl/2Z3V5Q

Cash is a sizeable amount within my portfolio's asset allocation with a range of 15% to 25%. According to a recent Xray analysis it is at its upper limit at 25% without being overweight cash. In the nearterm, it might just become overweight.

Hi steppinrazor,
I agree that reading 500 pages per day is a challenge beyond the reach of most folks. Especially elusive if some comprehension is a target goal. Doubly elusive if, like me, your education and experience are in the scientific or engineering fields.
For most folks a reading speed between 300' and 600 words per minute is the standard. Let's use 500 WPM as a good yardstick. An average page contains 500 words so that makes the calculation easy. It takes 1 minute to read a page. A 500 page reading assignment will absorb 500 minutes or 8.3 hours. That's a heavy load each day. I would fail that assignment.
My job demanded responding to government's Request for Proposal (RFP). Often there was a page limit specified. To say more, we used small type, almost zero margins, and multiple foldout pages. Those tricks increased our word count. I doubt it ever increased the odds of our team winning a contract.
Best Regards.

From the commentary on the advice given to students during a visit to Berkshire Hathaway:
"In a recent visit, Combs apparently suggested to the students that they target reading 500 pages a day."
I read a lot and I consider myself a fast reader, but to read 500 pages a day, even of light potato chip fiction, would basically require that your day job be reading.

Some Roth distributions are federally taxable (e.g. earnings if your Roths are less than five years old). "Any portion of your Roth IRA distribution that is included in your federal adjusted gross income (AGI), is subject to Michigan tax."
http://www.michigan.gov/taxes/0,4676,7-238-75545_43715-154072--,00.html
"if part of the [Roth] distribution is taxable, then Michigan pension withholding would be required on the taxable portion of the distribution."
http://www.michigan.gov/taxes/0,4676,7-238-43513_59451-263747--,00.html
As far as other fund houses go - there are a lot of wrong answers out there. My experience with front line customer reps is that some may give answers without checking details.
Sometimes it's hard to get past front line reps. I once spent six months arguing with an electric supplier because they were charging tax to residential customers, when the city law explicitly exempted residential customers from tax. (They ultimately stopped collecting the tax but said it would take awhile to compute refunds.)
I got an answer from Fidelity earlier this year that I believed was wrong (again, a tax question). It happens. I was able to work around that answer, so it wasn't worth a fight. But I did email them a link to an IRS page directly contradicting what they told me.

Hello,
A good article on rebalancing covering the why's and how to's.
For me, the best thing I did, years back, was to determine an asset allocation consisting of cash, bonds, stocks and other assets with target percentages being set for each asset class allowing for some range movement based upon market conditions, my needs and most important my risk tolerance. Over time, I developed a matrix that helps me determine just how much stocks, the most risky asset class, to hold from time-to-time based upon certain market condidtions but keeping within my asset allocation range for stocks.
Currently, my range allocations are as follows: Cash Allocation range 15% to 25% with target currently being set at 20% ... Income Allocation range 25% to 35% with target currently being set at 30% ... Growth & Income Allocation range 30% to 40% with target being set at 35% ... and Growth Allocation range 10% to 20% with target being set at 15%. In doing a recent Morningstar Instant Xray analysis on my portfolio the results were cash 25%, bonds 25%, domestic stocks 30%, foreign stocks 15% and other assets 5%. With this, I am currently light in my income allocation due to an anticipated rising interest rate environment, neutral in my stock allocation and heavy in my cash allocation. Note, some of my hybrid funds must have recently bought stocks because not too long ago I was light in stocks as well as bonds.
In general, my market valuation matrix determines how much stocks I will hold from time-to-time on the investment positions that I set the allocation on and is based, in most part, on some valuations measures I use to gague the market. These include both technical and fundamental measures along with some room for my other measure that allows for some reasoning and is known, by me, as my SWAG mythology, Scientific Wild Ass Guess, which includes some investment folklore. For the hybrid funds that I own, I let the fund manages determine what assets to hold and how much of each while I determine how much of my portfolio is to be invested in hybrid type funds. In doing this, this allows for some adaptive allocation movement, within the portfolio, through asset movement and repositioning within the hybrid funds held. Currnetly, the hybrid funds make up about 40% of the overall portfolio.
For me, rebalaning form time-to-time has indeed, I feel, been beneficial.
I really did enjoyed reading the article.
Thanks @Ted for posting.
I wish all ... "Good Investing."

Wrote out a lot about this, but not really worth starting a debate- it's MFO, we're aware of index funds, you can argue this one with the Bogleheads. Mairs and Power: long history, great track records for all 3 funds, good stewards, the outperformance is due to active share and their investment process. You can't really compare 5 years of returns, it's not realistic.

A quick search shows virtually every doc saying that Michigan IRAs are considered pensions for tax purposes, and are subject to withholding.
Older folk (those who were born earlier than 1953 or have spouses that old) may be able to avoid some or all of the withholding by filing form MI W-4P. I'm sure you know all this - I'm just reading up on Michigan, since I didn't know that any state required IRA withholding if the taxpayer didn't elect withholding for the IRS.
I suspect no one knows exactly how things will work, but a possibility (check with TRP):
- keep enough in PRRXX (Gov. MMF, formerly Prime Reserve) to cover withholding
- keep remainder in a prime fund earning a bit more interest (TSCXX)
If TRP will cooperate, then you may not have to worry about the redemption fee and/or gating on the prime fund. See if TRP will let you use the PRRXX shares for the withholding, and distribute the TSCXX shares in kind to your taxable account
You could then wait until redemption restrictions were lifted on the TSCXX shares in the taxable account and cash out.
Or you could keep everything in TSCXX, so long as redemption restrictions were not likely. This would entail monitoring the weekly liquidity of the prime fund here. No gates or redemption fees unless this drops below 30%. (It's currently 36.61%)
This would get you an extra 15 basis points - admittedly it may not be worth the effort. Maybe it would be easier to move out of Michigan :-)

My family's never lost money in a MMF either, though my father was an early adopter of Reserve Fund when it was the only game in town.
At the same time, I remain cognizant of the risks (small but nonzero), which is why I expect compensation for the risk. That's why I've suggested keeping taxable cash in 1% bank accounts until MMF yields improve.
But for brokerage- or fund-based IRAs, where moving money to and from bank accounts is problematic, I've pointed to VMMXX and FZDXX. They hit a reasonable balance between risk (small, nonzero), yield (about 0.5%), and convenience. Especially for IRAs where one likely keeps little in cash.

Wow, Hancock Horizon Funds - never heard of them, I'm impressed!
I do think that the heyday of the regional funds was the late 90s or so (the era from which my links came). "Regional stock funds are becoming more popular in the mutual fund industry." Washington Post, March 2, 1998.
If you thought the Golden Gate Fund (focused on the Bay Area) was a bit too narrow, how about Gateway Cincinnati Fund (closed 2003)? P&G and what else?
The funds that hung around for some time did so by broadening their mandates - Franklin Calif. Growth reduced its regional exposure from 80% to 50% before getting rid of it. Safeco NW played games to keep Boeing after it moved its headquarters to Chicago (which I guess makes it fair game for Mairs & Power).
So finding any fund actually focuses on regional companies (as opposed to giving brownie points, i.e. "some emphasis") these days really does impress.
That said, I think that NY Ventures is stretching it a bit - it's more NY because of its name than its portfolio.
Looking at NYVTX (it holds only 57 stocks), the ones in the Northeast I see are :
#5 JPM (Chase)
#8 UTX (United Tech. CT)
#10 AXP (Amex)
#11 BK (Bank of NY Mellon)
#18 PX (Praxair CT)
#31 CB (Chubb NJ)
#32 TYC (Tyco Int'l - US operations HQ in NJ)
#32 DGX (Quest Diagnostics NJ)
#33 CFG (Citizens Financial Group, RI)
#36 PCLN (Priceline CT)
#40 (L Loews)
#43 MCO (Moody's).
Even if I missed a couple, it's hard to consider this a northeast fund.
Kudos on Hancock Horizon, A for effort on the rest.

Separate discussions --- whether the feel of the Midwest starts a few miles east of the Ohio border, and what if anything accounts for M&P performance deltas, such as they are.
Of course start points matter. From beginning of 1980 MAPOX underperforms DODBX and FPURX while outperforming (significantly) 50-70% equity allocation criterion, while beginning at the end of 1980 makes it closer to a tie.
As an owner I read their prospectus many times, and yes, including ND. The 'better idea' thing was always leaned on pretty lightly. (The way other fund families like to talk about being sort of out of it [GLRBX].)
My bond query was at least partly tongue in cheek, but I did figure you might well do the digging.
Jack Kennedy often quipped that WDC was a city of 'Southern efficiency and Northern charm.'

This exchange about what constitutes the midwest is sort of humorous, given that funds invest based on economics, not political lines. The midwest is whatever the fund says it is, no more, no less.
M&P doesn't even say it focuses on the midwest. It says "some emphasis is given to the ... Upper Midwest, ... which the Adviser "considers to be the states of Illinois, Iowa, Minnesota, North Dakota, South Dakota and Wisconsin". Not even Indiana. As always, read the fine, um, prospectus.
As far as the Census Bureau's definition of regions goes (which seems to be what some people here are alluding to), this is the same definition that calls Maryland a southern state. That's not what I was taught in school (i.e. that DC was situated between the northern states and the southern states), nor does it match what most people think, according to a (not too scientific) 538 poll. Only 6% of self-identified Southerners agreed that MD is part of the south.
Regarding the performance of MAPOX: What explains the difference in decades long performance (relative to respective categories) between MAPOX and MPGFX? Keep in mind that these funds were ostensibly managed by the same people. Were they keeping their best equity ideas for the balanced fund (that doesn't seem likely, but I haven't researched), or was the relatively better performance of MAPOX due to its bond sleeve?
Assuming the latter (IMHO a good assumption until justifiably questioned), it's fair to look to that bond portfolio. There are two issues here: (1) how regional is this part of the portfolio really, and (2) how has the fund performed in different bond markets.
To the first question: while MAPOX is currently heavily into corporates, that waxes and wanes. M* writes: " On the fixed-income side, the managers own a mix of U.S. government agency debentures and investment-grade corporate bonds. The allocation has varied over time." In 2006 (per annual report) 59% of its bonds were US bonds (mostly Fannie Mae), not regional. Even today (semi-annual report released this week), with 90% of its debt in corporates, there doesn't seem to be a disproportionate amount in the states named by the fund.
Sure, lots of FoMoCo debt (about 1.4% of the corporates). But 40% of the corporate debt is in financials, and you'd be hard pressed to find a M&P regional company there. Okay, there's Kemper (Ill.) with a tad under 1% of the corporates. Berkshire Hathaway hails from Nebraska, not part of the fund's regional focus. Then you have more financials listed under industrials, like GE Capital (also sold recently), and Dun and Bradstreet (NJ). Big IT creditors include Intel (bigger than FoMoCo), Symantec, Autodesk, Fidelity Nat. Info Services (Fla.) and Western Union, all about 0.8% of corporate debt. Then there's midwest Motorola, with about 0.6%.
To the second question - how did the fund perform if we decompose by bond market? Using 1/1/80 as a starting point for the bond bull (rounding to decades), MAPOX underperformed DODBX by 13% cumulative. Perhaps with the expected return of a bond bear market, MAPOX will once again outperform. Maybe not, since those pre-1980 managers are long gone. As Dan Fuss notes, he's one of the few bond managers around who's had experience in rising interest rate markets.
In short, it doesn't appear that M&P gets any particular benefit on the equity side from its narrow (6 state) regional bias. On the bond side, it's hard to see that there even is a regional bias. Regardless, it hasn't outperformed your reference fund of choice since the 70s, when the bond market was very different. None of this detracts from M&P; it just doesn't support the theory that M&P (like Ford) has a better idea.

Like other active portfolio managers, Artisan Partners Asset Management has suffered: Money has flowed out of its funds, earnings have declined, and its stock has fallen 26% this year, to a recent $26, sharply below its 2014 high of $70. That has given Artisan shares a fat yield of 9% but has also raised questions about whether it can sustain its dividend.
Founded in 1995, Artisan (ticker: APAM) went public in 2013. Today, it has 14 mutual funds investing in U.S. and foreign stocks and bonds. Ten funds have a coveted...
https://google.com/?gws_rd=ssl#q=Finding+9%25+Yields+in+a+Beaten-Down+Asset+Manager

I was thinking about buying this fund early in the year. Fortunately, I never pulled the trigger. YTD performance is in the 98th percentile (only up 0.26% compared to S&P 500 up 8.27%), 1 year performance is in the 95th percentile, and 3 year performance has fallen to the 66th percentile. Prior to 2016, this fund had stellar returns. Since 2011, the fund beat the S&P 500 every year and was at or near top percentile wise for each year. It's value or contrarian style has hurt it lately.
My question is: would this actually be the right time to buy this fund? It holds stocks that as a whole have not gone up with the rest of the market this year, so should be undervalued and may be more likely to outperform if the market is deemed to be expensive or remains flat and people look for bargains. The fund has had an excellent history prior to this year, so surely the managers know what they are doing and have just run into a rough patch. Or is this a case where one should stay away from this fund, as it has finally lost its magic and might not get it back, like other funds have in the past.
I'm also curious if any current SMVLX owners have become frustrated with this fund and are thinking of selling it, or if anyone has recently sold it because of it's poor performance over the last year.

Gosh, I don't know. Does the following go your case's way, since it includes bonds?
From 1961 inception to 1/1/2000, MAPOX beats DODBX in $10k growth by $59k, $446k+ to $387k+. 15% cumulative, maybe not a lot for almost 40y, but not nothing.
So regional bonds too, not just stocks?
From inception to date, almost 55y, it's been 8% edge to MAPOX (cume).
Somehow I don't think anyone has ever thought of M&P like Safeco or Golden Gate. Maybe they shoulda.