@Shostakovich OSTFX had a huge position in Valeant Pharma before analyst Andrew Left's take-down of it last Fall. I think OSTVX also had a significant chunk in it, too. They dumped it right away, before things got worse (as they have), but considerable damage had already been done.
http://www.benzinga.com/analyst-ratings/analyst-color/16/02/6508179/valeant-gets-closer-to-lefts-50-target-after-new-account?curator=thereformedbroker&utm_source=thereformedbroker
Combine that with the HY bond exposure in the fixed income sleeve, and a presence in MLPs, and you pretty much have your under-performance explained.

Hi, OJ!
Uhhh, I would imagine that investors rather like investing in a market that has an airbag. That might be quite enough to keep them home.
As to valuations, perhaps they're not all that comparable? See, for instance, http://www.starcapital.de/research/stockmarketvaluation. To the extent there's convergence, perhaps the fact that markets are global leads to broadly similar valuations? Perhaps the fact that 2500 foreign stocks trade on US markets as ADRs has a similar effect?
Just pondering,
David

David's post suggests that Grantham's estimate- "...US stocks are overpriced by 50-60% right now", is based on the Fed's actions coupled with the pursuit of short-term selfish interests on the part of management.
Question: If the suggested overvaluations are confined to US equities, then wouldn't value investors have turned en masse to an alternative and presumably more accurately priced market, Europe, for instance?
Granted, the EU central bankshave more or less paralleled the Fed with respect to trying to stabilize the markets since 2008 or so, but surely not prior to that? And is Grantham suggesting that short-sighted management is also responsible for elevated valuations of major European stocks also? That's surely a whole lot of world-wide short sightedness.
How do we explain the near equivalency in value/pricing for European stocks "since the days of Alan Greenspan"? Surely Greenspan's influence didn't significantly drive the European markets, yet their price/value ratios were and are comparable to ours.

By way of a backhanded compliment, they have simplified their website a bit. (I'd not seen one more complex than theirs.)
Before, if you had the usual type of accounts (e.g. 403(b), or anything else using the TIAA-CREF annuity structure), and you also had "external" accounts (e.g. a taxable brokerage account), these showed up in different places on their website, and you had to navigate through them differently. Now, all the statements are in one place. An improvement, albeit a small one.
But the company structure is just as complicated as always. Still with the three share classes that charge IRAs the most. Still with a bank that's somewhat off to the side. Still without statements online for aftertax annuities. It took me 4-5 clicks and scrolling down each of the pages to get to the aftertax annuity performance (worse than before, at least because of all the scrolling required).
Still can't find any info about what funds they offer NTF (via their brokerage). There's just one link to Nuveen funds (which they own). It's not under the drop down menu (What We Offer), but at the very bottom of the page (as you scroll down for miles), where you see it under "For Financial Advisors". So you can get these NTF at other brokers but not at TIAA (formerly TIAA-CREF)?
Lipstick on a pig is too kind (and I do think TIAA-CREF is excellent for some purposes)

>> Grantham's observation that stocks have been overpriced about 80% of the time over the past 25 years.
May it continue.

Hi Dex, Hi BobC
Thanks for your commentary. Perhaps from this dialectic exchange a useful synergy will emerge. That often happens.
I take no issue with the general rules that you both advocate. I too use them. But they are motherhood and apple pie. If your mother and father did not lecture them as a practical gospel before teenage, your parents were delinquent. That advice is accepted wisdom; it just does not go far enough for retirement planning purposes.
Those guidelines simply do not yield a yardstick to measure retirement planning progress against, and do not help in a final retirement decision. Some metrics are needed. A Monte Carlo approach is a perfect tool given the uncertain nature of future portfolio performance. Monte Carlo methods were specifically developed during World War II to address uncertainty, especially when a boatload of data are accessible.
Napoleon said: “Nothing is more difficult, and therefore more precious, than to be able to decide”. Information gathering, data interpretation, hypotheses testing, and flexibility to adjust are essential elements in any ongoing retirement planning process.
Without numbers and expectation estimates, a potential retiree is lost at sea. Without credible estimates any retirement consultant is similarly lost at sea, and is not providing a full service. Convenient, easy to use, and fast Monte Carlo simulations fill many of the gaps, at least in a probabilistic sense. That’s as good as it gets.
For example, use the PortfolioVisualizer Monte Carlo tool. In a few minutes it runs 1000 random cases for the input parameters. Those input parameters are easily changed to explore what-if scenarios. Those what-if scenarios test the robustness of any assumptions. Time span is changed with a single input.
Output includes a likely median end wealth portfolio value, a portfolio survivable probability, and the 25 and 75 percentile portfolio value likelihoods. All this is good stuff and informs both the sagacity of the ongoing savings process and any final retirement date decision. These outputs can be updated over time, and yield retirement guidance. And it’s all free for the doing.
Note that the Monte Carlo simulators that I recommend do not operate in a vacuum. They are just one tool in a retirement planning toolkit. Adopting that tool does NOT preemptively require discarding all the other elements discussed in these exchanges. These are not mutually exclusive planning devices. They should be used in tandem.
Monte Carlo simulators have become a more or less standard tool in financial planning circles. An early version was developed by Nobel Laureate Bill Sharpe. He still runs that service as part of his Financial Engines website. Like all tools, the everyday American wisdom is to “use it or lose it”. I’m at a loss to construct an alternate way to generate any meaningful projections for the survivability of any retirement war-kiddy.
Your suggestions are welcomed and encouraged.
Best Wishes.

FYI: Financial planning and everything associated with it can be stressful and complicated, even off-putting. For a financial services brand like TIAA—which just dropped the "CREF" from TIAA-CREF—that can present a marketing challenge.
Regards,
Ted
http://www.adweek.com/news/advertising-branding/why-financial-services-company-shortened-its-name-and-changed-its-logo-169807
Mutual Fund Wire.Com Slant:
CREF-Less:
http://www.mfwire.com/common/artprint2007.asp?storyID=53520&wireid=2
TIAA Website:
https://www.tiaa.org/public/index.html
M*: TIAA Fund Family:
http://quicktake.morningstar.com/fundfamily/tiaa-cref-asset-management/0C00001YVW/fund-list.aspx

Hi, guys.
I know that Grantham is sort of a divisive figure here, with a bunch of folks describing him as some combination of failed and a perma-bear. There are two drivers of his failure to join the recent party. His firm's discipline is driven by mean-reversion. Their argument is, first, that stock valuations can be weird for years, but not weird forever. They keep reverting to about the same p/e they've held in the long-term. Why do they revert? Because stocks are crazy-risky and, unlike The Donald, most investors aren't willing to risk multiple bankruptcies on their way to great returns. Expensive stocks are riskier, so their prices don't stay permanently high. And, second, that profit levels can be weird for years, but not weird forever. Why do they revert? At base, if you're making obscene profits, competitors will eventually come in and find a way to steal them from you. More companies competing to provide the same goods or services drives down prices, hence profits.
Sadly, it hasn't worked that way for a long while. Grantham's argument is that price reversion has been blocked by the Fed since the days of Alan Greenspan. What happens when the market begins to crash? The Fed rushes in to save the day. In effect, they teach investors that pricey stocks aren't all that risky which encourages investors to keep pursuing higher priced stocks. Leuthold noted, for instance, that valuations at the bottom of the 2007-09 crash were comparable to those at the peak of most 20th century cycles. The problem with relying on the Fed is that pretty clear. And he argues that profit reversion has been blocked by a shift in executive compensation: executives are personally (and richly) rewarded for short-term stock performance rather than long-term corporate performance. If an executive had a billion to spend on a new warehouse distribution system that might payoff in five years or on dividend checks and a stock repurchase that plumped the price (and their bonus) this year, the choice is clear. In 2015, S&P 500 corporations put over $1 trillion into stock buybacks and dividends - economically unproductive choices - while is more than double what they'd done 10 years before.
Both of those factors explain Grantham's observation that stocks have been overpriced about 80% of the time over the past 25 years. His current estimate is that US stocks are overpriced by 50-60% right now.
Good news: that's not enough to precipitate a market crash, though "a perfectly ordinary" bear market is likely underway. Vanguard's Extended Market Index Fund (VIEIX) hit bottom on February 11th, down 25% from its June high. That matched, almost to the dollar, the decline in the emerging markets index. Both have rallied sharply over the past 10 days. Regardless, most stocks have been through a bear. Really catastrophic declines, though, rarely occur until market valuations exceed their long-term average by two standard deviations. The current translation: the S&P 500 - about 1900 as I write - at 2800 would be bad, bad, bad.
Bad news: you're still not going to make any money. GMO's model projects negative real returns on bonds (-1.4%), cash (-0.3%) and US large caps (-1.2%). Vanguard's most recent white paper on valuations, using different methods, leaves bonds at zero real return, stocks modestly positive.
Better news: the best values are in the riskier assets, which I hinted at above. US small caps are projected to make 1.5% real, emerging debt is at 2.8% and emerging equity at 4.5%.
For what that's worth,
David

Filing for the reorganization:
http://www.sec.gov/Archives/edgar/data/935015/000119312516472686/d144281d497.htm

@DavidV: Thanks for the question which is very bond specific. As you suggest, with bonds there are many variables in terms of credit quality, duration, structure and place of issuance (in the case of foreign securities). I find it best to invest in broader income-focused or asset allocation funds and let an expert sort this all out. T. Rowe Price's summary and annual reports for RPSIX (available on their website) probably should be required reading. The fund is not for everyone, but its composition offers insights into how someone might structure an income based portfolio. There's many other fine funds with similar objectives but different approaches. Max mentioned some.
My take on RPSIX's current approach is that the fund is pretty much avoiding bonds further out than 10 years duration and also underweighting government bonds in favor of mid-grade and lower quality corporates. The near 50% weighting in BBB and lower is most interesting. I don't think Price is including the fund's near 20% equity stake in their credit analysis, so that needs to be taken with a grain of salt.
(I attempted to cut & paste some relevant features from their summary page. But the fund's approximately 20% stake in equities made presenting an accurate representation too difficult.)
View Summary: http://www3.troweprice.com/fb2/fbkweb/composition.do?ticker=RPSIX

@DavidV & MFO Members Here are some suggestions.
Regards,
Ted
Suggested Bond Time Period Allocations:
25 Years + To Retirement:
11-25 " " "
1-10 " " ":
Retirement:
:
http://www.seninvest.com/article13.htm

@Dex @MikeM @MJG
As noted by Dex.....these first four
- know how to budget
- track your spending
- pay yourself first
- spend less then you earn
>>>If the person can not be involved with or control any of these, there will be no need for anything related to the Monte Carol machine.
Probably more so today than with my generation, there is a high likelihood that a college graduate today, or anyone employed has not a clue as to where they will find their arse on retirement day.
But, one thing is written; in that if the 4 items in the list above can not be properly controlled, the retirement roadmap will not exist to any value.
I know from 2015 the same type of budget information I know from 1970; as to how much and where monies travel in the broad budget categories. Tis not difficult to track.
Catch

@sligo & MFO Members: Fund opened on 11/1/13 @$10.00 and closed last Friday @$8.58, 74%, in cash, and a ER of 2.33%, just say no to Renee !
Regards,
Ted
Renee Haugerud:

Using a 4-5% withdrawal rate, the 100-age allocation could be very problematic, as it always has been. Unless there is simply more savings/investments than will ever be used, folks could find they are eating up principal much faster than their longevity will allow. Of course, not having a mortgage when retiring is a game changer, as is receiving a public pension. No mortgage AND a pension are huge. There is no 'rule of thumb' that should be applied here. It is very individualistic, and each household should spend a good amount of time planning just what 'retirement' looks like, both in terms of cash flow and life activity.

Anything to back that up or is it from your life experience?

"Many clients are spending a minimum of $3,000 a month once they stop working on basic necessities such as property tax, car payments and federal taxes, Ulin said."
- move someplace cheaper
"What you can control is saving early and often ..."
- all that really needed to be said
$2 million is a ridiculous number and trying to save $20,000-30,000 a year on the average Americans take home income of $35,000 has me wondering just who this article was written for.

Look out below! The average weighted price of bonds in Vanguard's Long-Term Treasury VUSTX is $110.58. If that is not a recipe for disaster somewhere down the road, I don't know what is. The average coupon is 3.67%. The actual 30-day yield is 2.29%. It doesn't take a rocket scientist to see the potential problems here. Just moving to intermediate-range bonds in VFIUX brings the average price down to $100.41, but there is still some disconnect with the average coupon at 2.97% vs. a yield of 1.29%. Still much safer than long-term treasuries.

Using a 4-5% withdrawal rate, the 100-age allocation could be very problematic, as it always has been. Unless there is simply more savings/investments than will ever be used, folks could find they are eating up principal much faster than their longevity will allow. Of course, not having a mortgage when retiring is a game changer, as is receiving a public pension. No mortgage AND a pension are huge. There is no 'rule of thumb' that should be applied here. It is very individualistic, and each household should spend a good amount of time planning just what 'retirement' looks like, both in terms of cash flow and life activity.

TurboTax Delux is available for $50 at Costco. The last of 1099-Div and 1099-B arrived this week and our 2015 return is now completed.

With the lack and disappearance of "steady" job prospects, ( compared to the boomer generation ) innovation in alpha producing investments, and lack of planning help available to young investor, they will have to be more DYI going forward. Robo advisors, buy and hold index investing, and 60 / 40 "glidepath" funds won't help in the accumulation of the millions of dollars needed for survival either.
One of the best steps that a young investor can take, is the opening and funding a ROTH IRA, and then investing in small cap value * . Applying a quantitative tactical model to a portfolio of small cap value, long bond fund and cash equivalents has taken a smaller investment stake and produced risk alpha above the buy and hold of small cap value **.
* https://docs.google.com/document/d/1kToqLWLISRk4n4YnSzv1hT5kBN54l5CvhwGgDwJKPJI/edit?usp=sharing
** https://docs.google.com/presentation/d/1pQuBfbPd18ca0G-KiZc5FIWNMx0pNa87INgsLjEwuzY/edit?usp=sharing
https://docs.google.com/presentation/d/1C37CJypoxHWHB09e3g25ewOGjP83wDZhj5j6tlrLJoA/edit?usp=sharing

@Lawler & MFO Members: Thanks for the reminder, here is the article. (Click On Article At Top Of Google Search)
https://www.google.com/#q=What+Recession?+GDP+Set+to+Grow+3%+barron's