From @Old_Joe

Unfortunately we were much too early for index funds, but we did the shoveling away into American Funds and American Century predominately large cap and balanced funds. An S&P 500 index fund, had such a thing existed, would have worked even better.

The fact is, (well not really a fact, just what I believe), is the mistake most investors make, those investors that semi think they can beat the market by going to cash at just the right moment or stay they in cash because a pull-back just has to happen, they are the ones who's returns over the long run suffer. The investor who keeps switching funds or buying the new or hot fund is the loser. I also believe, to @Junkster's point, this is true of many a MFO investor. Nothing to do with index or managed.
By the way, this is being said by someone who in the past thought he could win the timing game and who could never settle on the perfect mix. Now 1/2 my money is in a robo invested at 60% equity at all times, and the other 1/2 self managed using Old_skeets equity range method. juuuust my 2cents.

"They got that way they say by shoveling every spare penny maxing out their retirement accounts during their working years in S&P index funds."
Unfortunately we were much too early for index funds, but we did the shoveling away into American Funds and American Century predominately large cap and balanced funds. An S&P 500 index fund, had such a thing existed, would have worked even better.

I agree with you. At least since the market bottom in early 2009 I have seen scant evidence MFOers have beaten a buy and hold in the Vanguard S&P 500 fund. Or for that matter come remotely close. Lots of international and emerging market investing and love for cash rich funds as well as alternative funds. The latter out of fears of another 2008.
Edit; Yes, I know it has been a relentless move up the past 8 years and 8 years may not be a long enough period to make any kind of judgement. But I know countless passive investors who are now set for life thanks to those 8 years. And isn't that what it is all about??

I'm not disagreeing with your basic conclusions, but I've never really agreed with using the S&P 500 as a benchmark of an investor's portfolio. While I doubt everyone will agree on what would be a better benchmark, I think that a Balance Composite Index would be a closer measurement. Some people consider cash to be part of the portfolio. That would include a rainy day fund, as well as holding cash as an alternative asset. While I'm sure that there are people who are 98% in equity, I doubt the number of investors who do is very high, unless you own part of the family business.

I can't necessarily disagree with you regarding the benchmark. I guess I am just biased from meeting so many retired multi- millionaires in my various hiking groups. They got that way they say by shoveling every spare penny maxing out their retirement accounts during their working years in S&P index funds. And in some of the younger groups I hike with they seem to be doing the same thing and far ahead of where I ever was in my younger days. Which reminds me of an article I saved from the WSJ 7/7/97 titled Waking Up Rich. It detailed how suddenly many investors are finding themselves millionaires from their employee sponsored retirement accounts by being in funds that mimic the S&P.

http://www.investors.com/etfs-and-funds/mutual-funds/fidelity-slashes-online-stock-etf-commission-to-4-95-a-38-cut/
Schwab matched Fidelity's huge cuts in online brokerage trading commissions today. Other brokerages are left in the dust.

Hmmm ... I've been writing about individual funds, between FA and here, for just about 11 years. There are two profiles, both from FundAlarm days, the thought of which still makes me queasy. By worst the worst were the Utopia Funds, launched by a small advisor in Michigan. They had go-anywhere portfolios with remarkably low minimum initial investments and reasonable expenses. Five funds, ranked from "Income" to "Aggressive." They were based on a really successful set of separate accounts that thrived because they were small; they picked up bits and pieces of "orphan" investments that larger advisors found too small to be worth the effort. Those ranged from regional micro-cap stocks to called bonds. In practice, the funds started okay then sank into the average-to-bad range. Not "awful," but clearly "bad" when judged by their ability to maintain the targeted risk level. Then, without warning, they closed and liquidated. When I tried to contact them to ask about the decision, I got silence in return.
That was useful to me and, arguably, profitable to you because I stewed a lot about what contributed to the mistake. Part of the lack of a mutual fund record, as opposed to an SMA record and part was that the two managers executing the fund strategies were only assistants on the SMA strategy. Both of those conclusions helped me tighten the criteria for funds I've written about. That played out in the case of Auer Growth (AUERX), where the senior Mr. Auer managed his retirement account to something like a 10:1 advantage over the broad market over some ridiculously long time; the junior Mr. Auer talked him into launching the strategy as a fund. I was, I hope, clearly skeptical about it. A one-star fund with bottom 2% performance followed.
The only queasy interval was Nakoma Absolute Return, which was managed by one of the guys at the U of Wisconsin's famous securities analysis program. These guys cranked out a string of first-tier managers and ran a very successful long-short hedge fund which they eventually offered to the public as a mutual fund. I 'fesseup to the problem with the fund a long time ago (07/11) in a discussion started by Vintage Freak:

The general problem is that Mr. Pickett has been skeptical about the US market for much of the decade, has maintained about as many short as long positions (bad idea in a rising market) and has been repeatedly wrong in security selection. None of which I would have predicted. Indeed, none of which I did predict.

I've become more cautious about hedge fund conversions as a result; my experience is that those often end up as being okay funds but mostly shadows of their former selves. Why? Rekenthaler made a good argument this month: hedge fund conversions are cherry-picked and we don't know anything about the rest of the crop. A hedge fund manager might have 10 funds, nine of which smell like the beach at low tide and one of which has had (maybe, "has lucked into") eye-popping results. The existence of the nine dogs doesn't have to be disclosed so we falsely assume that the one winner is representative of the managers' skills. While that's not always the case - that is, some hedge fund conversions produce reputable mutual funds - it's something that we need to approach with skepticism.
--
I'm mostly able to sleep at night when I consider the other funds we're written about. Mostly. Some have been spectacular successes, which is nice, but I draw more comfort from the fact that most of the managers (including Mr. Cinnamond) have invested heavily in their funds and have done precisely what they said they were going to do. That is, they were disciplined and true to that discipline. Mr. Barbee (AVALX) told you he was going to stay fully invested, at all times, in the tiniest and cheapest stocks in existence. It's been clear from Day One that that's a rocket-and-crash discipline. The fund made a mint during the 2000-02 bear, dipped by 65% in the 2007-09 one, and is beating the competition by over 300 bps since. Its cumulative (i.e. compounded) advantage since launch is huge. That said, I'd never invest in it since I much prefer not to have my long-term returns punctuated by apocalypse. But I'm perfectly comfortable with what we wrote about it.
For what that's worth,
David

The 5Yr avg returns on S&P 500 will cross 15% soon. Marketing is already going up and will into overdrive when we reach 15%. I'm going to take money of the table, or even sooner, if that happens. At a minimum, good time for rebalancing or eliminating some trading holdings.

@BobC. Totally agree. When you buy triumphs what you buy 9/10. However, with SCMFX I'm much to blame to let myself be influenced.
The real problem is who buys a 1* fund? Everyone wants to by 5* funds. I think the *s influence people in a way simply "top performing fund" wouldn't. I can guarantee most of the people looking at M* and at fund companies touting the star rating received from M*, take this to mean more than just a performance based rating when it is really just that.
Finally it is hard to know when someone was lucky or just good or both or neither. MFLDX started in 2008. Perfect timing for a L/S fund. I'm glad I sold because it stopped being NTF at Scottrade.

Best and Worst sometimes has a lot to do with timing...when you buy a fund. For example, WASYX had a fantastic run until it ran into problems with asset bloat and big management changes. Those folks who owned it from 2007- 2013 and sold it for whatever reason probably loved it. Even with some stinker years, especially the last 3+ years, its 15-yr average return is about 8%. But this is why WHO runs an actively-managed fund is so critical, as is asset bloat and the problems it might cause.
Investors often are late to the party with funds, getting if after the big gains. Once the fund gains large numbers of assets, it may be unable to continue using its unique strategy. Certainly MFLDX is a good example of this. Spectacular numbers from inception 2008 through much of 2013 (assets ballooned from $35 million to almost $16 billion), then running of the tracks and crashing, not recovering even as assets dropped to $370 million. Here there was no management change. In hindsight, the small fund's purchase by a large fund company was likely a big mistake.
I would urge caution about labeling relatively new funds "Best". "Best" can mean different things to different investors. While I personally own SIGIX because of its manager's track record, the fund is barely 5 years old. I own it because I believe it is a good compliment to a higher-volatility index like SCHE. It may not have the best long-term total return numbers, but I am ok with that.

FYI: Fidelity Investments is returning fire in the online brokerage industry's price war. Fidelity, which lays claim to the mantle of largest online brokerage firm with its 17.9 million accounts and $1.7 trillion in total brokerage client assets, on Tuesday slashed its base online retail commissions for U.S. stock and ETF trades to $4.95.
That was a $3 per-trade reduction, or 38%, and Fidelity's first commission cut in 7 years.
Regards,
Ted
http://www.investors.com/etfs-and-funds/mutual-funds/fidelity-slashes-online-stock-etf-commission-to-4-95-a-38-cut/

Good morning,
In checking the markets this morning as I write Asia-Pacific is mixed with China and Japan being up Europe is mostly up with the exception being Germany. In the States stocks look to be down and government bonds flat to up. The three leading sectors yesterday in the 500 Index were energy, financials and real estate. The three leading commodities this morning are lumber, feeder cattle and live cattle. For the latest data you might wish to check the links below because often times things change throughout the day.
http://markets.wsj.com/usoverview
http://finviz.com/futures.ashx
Yesterday, Jeffrey Saut of Raymond James posted his weekly commentary which I feel is worth the read. Its theme ... is that ... it is sometimes best to just sit.
https://www.raymondjames.com/wealth-management/market-commentary-and-insights/investment-strategy
In addition, Brian Gilmartin of Trinity Asset Management published a piece titled "Financial Sector Estmates Still Show Favorable Trends" that is well worth the read. Seems, there are some revisions already taking place within forward estimates.
http://fundamentalis.com/?p=6729
Old_Skeet's market barometer still has a read of 131 indicating that the 500 Index is overbought. I wonder how the markets will be effected tomorrow after President Trump's speach this evening? And, I am indeed looking to see what the resulting barometer reading will be. It is interesting that all of the feeds are at (or below) their floor scoring readings with the exception being earnings. The earnings feed is comprised of both reported TTM earnings and forward estimates so if forward estimates get revised downward this will indeed have a negative impact on the feed's reading as well as faltering reported earnings. The barometer has a floor reading of 120 and a ceiling reading of 180. So, you can see we are currently well into the overbought zone and 11 points from the barometer's floor reading of 120. Please remember, a lower reading indicates there is less value to had in the 500 Index while a higher reading indicates more value. The zone indicators on the barometer are overbought, overvalued, fair value, undervalued, and oversold. Currently, 131 scores as overbought with the other feeds at or below their floor readings. With this, the strong earnings feed reading is all that is keeping the current barometer reading off it's floor. For me, this indicates the market is indeed extended and I look for a nearterm pullback and/or some sideways range bound price movement within the Index. I'm thinking that the markets are looking for a good message from our President this evening and this is currently already priced into stock market valuations. I see the markets as being very vunerable at this time!
As in the card game of bridge ... Anybody wanting to double?
For me, I going with Jeffrey Saut's sugguestion ... "I'm just going to sit" as I am towards the upper limit within my asset allocation for equities along with I am thinking that the stock market will continue to climb the earnings wall although there could be a nearterm pullback. Got some cash and will most likely become a buyer of stocks in a stock market pullback perhaps to the upper limit of their allocation within my portfolio. But, I need to see the barometer score some good value can be had first. That would take one heck of a movement on the barometer.
The primary reason that I am overweight equities, at this time, is because of a seasonal investment strategy that I follow where I load equities in the fall and generally keep their weighting towards their upper limit within my equity allocation until spring. I then begin a process to trim equities back towards a more normal weighting. March historically has offered up some good returns for stocks so, at this time, I going with the calendar over the barometer.
Thanks for stopping by.
Have a great day ... and, most of all ... I wish all "Good Investing."
Old_Skeet

Gambling is not a word I want associated with my retirement portfolio.
"Would MFO exists if everyone indexed?"....I wish someone would have forum posted me senseless years ago about the virtues of indexing. It would have made me a lot more money.
I respect your right to invest as you see fit with your money.

I agree with you. At least since the market bottom in early 2009 I have seen scant evidence MFOers have beaten a buy and hold in the Vanguard S&P 500 fund. Or for that matter come remotely close. Lots of international and emerging market investing and love for cash rich funds as well as alternative funds. The latter out of fears of another 2008.
Edit; Yes, I know it has been a relentless move up the past 8 years and 8 years may not be a long enough period to make any kind of judgement. But I know countless passive investors who are now set for life thanks to those 8 years. And isn't that what it is all about??

For the love of. ....!!!!
I agree with the both of you. Just saying keeping talking about it makes no sense. It is not making any difference. A better way to keep people from going active maybe to highlight highly index co-related "star" funds instead so people can see an index fund works as well. Need to change the "psychology" to make a difference.
All newsletters are not publishing buffets comments because they have any interest in getting people to index. M* stock would be not worth 2 cents if everyone started indexing. Every other day someone laments active management and there is an article and then every one has a link to it to get hits. No one listening to you and me.
PS - Please don't say active investing is gambling. Buffet himself is a gambler then.

Hi Guys,
I'll not classify myself as a permabull, but I probably feel market bullish most of the time. Why? The historical market data supports that optimistic perspective.
"The best predictor of future behavior is past behavior". I don't know the origins of that saying and I'm too lazy to research for it. The historical data over a long timeframe encourages my optimism. Is that optimism impacted by current conditions? Of course it is. My level of optimism is dependent on current circumstances and conditions. So I do make adjustments, but these adjustments are done slowly and incrementally.
Although my portfolio is becoming more Index oriented, I still have actively managed elements. How do I select those active elements? To demonstrate my laziness, I'll repeat a portion of a post that I made earlier today.
I do not choose those actively managed products randomly. I exercise a rules based selection discipline. Those rules are easily summarized as follows: low fees, low fund turnover rate, a reliable firm, long manager tenure, manage's own money in the fund, a high ratio of stock holdings that diverge from its benchmark, and some recognition of any downside risk factors.
Note my criteria emphasize consistency on past performance. It's not a perfect predictor of future outcomes but it's a reasonable point of departure. That's especially true if the commitment is short term timewise and subject to constant review.
To appeal to a sports related example, if I needed a single in a baseball game, I would choose a .300 hitter on my bench over a .250 hitter. I might choose otherwise if my .250 hitter had a terrific record against the pitcher and the .300 hitter had a dismal record against that pitcher. Special circumstances do promote exceptions.
History is always at least a partial contributor to any decision, and that includes an investment decision. Is it a full proof approach? No, but nothing is in our uncertain world. Change does happen.
Best Wishes

Aha - thanks for that info, I read that too quickly and didn't make the distinction.

Because he gave that name to his son?
https://www.wsj.com/articles/SB10001424052702303332904579224351143883302
(WSJ article gives you just enough to get the point, even w/o subscription)

Hi Guys,
In recent times I have become an advocate of a portfolio dominated by a diversified mix of Index holdings. That was not always the case. When I initially ventured into the mutual fund world, I filled my portfolio with actively managed products.
I did not choose those actively managed products randomly. I exercised a rules based selection discipline. Those rules are easily summarized as follows: low fees, low fund turnover rate, a reliable firm, long manager tenure, manage's own money in the fund, a high ratio of stock holdings that diverge from its benchmark, and some recognition of any downside risk factors.
I seldom satisfied all these rules, but a sufficient number to satisfice a majority. I still own a diminishing number of actively managed funds, and I still apply the same sorting criteria.
I certainly agree with the observation that investing should be as far removed from gambling as possible. The historical data shows that as the time horizon expands, the likelihood of positive investment outcomes dramatically improves, especially for equity positions. That's goodness for most MFOers who are in the markets for a longer timeframe.
I'm not overly concerned about investors totally buying into the Index strategy. The odds of that happening anytime soon are remote at best. Today, Indexing has indeed become more popular, but the market percentage is only about 30%. Some active investing is needed to establish a fair market price, but experts believe that a fair price can be determined with only a 20% active participation cohort. We're a long way from that threshold number.
That 20% estimate comes from a video that I referenced a few days ago. The video is over one hour long and presents an argument for Index investing. If you have the time and interest, here is the Link once again:
https://www.google.com/search?sclient=tablet-gws&site=&source=hp&q=how+to+win+the+loser+game+sensible+investing&oq=how+to+win+the+loser&gs_l=tablet-gws.1.1.0j0i22i30k1l2.3740.16019.0.23925.20.11.0.9.9.0.411.1982.0j9j1j0j1.11.0....0...1c.1.64.tablet-gws..0.20.2075...0i131k1.hvGA1z_u18U
It includes interviews with industry giants, mostly academics, who strongly endorse a passive, Index portfolio approach. Enjoy! Warren Buffett has been giving the same advice since the mid-1990s. Some of the guys ( EDIT: more properly stated "respected professionals" ) on the video have been doing the same for a much longer period.
Best Wishes

Because he gave that name to his son?
https://www.wsj.com/articles/SB10001424052702303332904579224351143883302
(WSJ article gives you just enough to get the point, even w/o subscription)

Actually the 0.94% is SEC yield, which IMHO is a better indicator of total return. The current yield (as opposed to trailing twelve month) is 0.98%, per Vanguard.
Since this is a tax-exempt fund, for someone in the 25% tax bracket the effective yield (ignoring state income tax distortions) is 1.25% or so. That beats bank rates, but perhaps not so much as to warrant the volatility risk.
Of the funds listed, my favorite would be VMLTX - its significantly higher yield over VWSTX means that in the worst case, you're likely to come out about as well as VWSTX over a year or more. The best comment on the M* article seems to be the first, by Darwinian, who explains some of this.

"The Treasury Secretary said that 50 year and 100 year bonds weren't completely out of [the] question, and that indicates that they are at least thinking they may have to go the deficit route and use those bonds to defray things." (1:20)

*********Spoiler Alert*************
https://www.sec.gov/Archives/edgar/data/1141306/000089180417000156/hend70680-497.htm
497 1 hend70680-497.htm HENDERSON GLOBAL FUNDS
HENDERSON GLOBAL FUNDS
Henderson High Yield Opportunities Fund
Supplement dated February 27, 2017 to the
Prospectus, Summary Prospectus and Statement of Additional Information, each dated
November 30, 2016, as supplemented December 20, 2016
IMPORTANT NOTICE
This supplement provides new and additional information beyond that contained in the Prospectus and should be retained and read in conjunction with the Prospectus.
On February 24, 2017, the Board of Trustees of Henderson Global Funds (the “Board”) approved the reorganization of Henderson High Yield Opportunities Fund (the “Acquired Fund”) into the T. Rowe Price U.S. High Yield Fund (the "Acquiring Shell Fund"), a newly-organized fund in the T. Rowe Price family of funds (the “Reorganization”), subject to approval by the shareholders of the Acquired Fund. The proposed Reorganization will involve transferring the assets and liabilities of the Acquired Fund to the Acquiring Shell Fund in a tax-free reorganization, as set forth in an agreement and plan of reorganization (the “Plan”). If approved, the Reorganization is expected to occur on or around May 22, 2017, at which point Acquired Fund shareholders will receive shares of the Acquiring Shell Fund representing the same total value as their shares of the Acquired Fund.
The Acquiring Shell Fund will commence operations upon consummation of the Reorganization. It is anticipated that the Acquiring Shell Fund will become the accounting survivor of the Acquired Fund and adopt its performance and accounting history. The Acquiring Shell Fund has substantially similar investment objectives, investment strategies, and overall risk profile as the Acquired Fund. In addition, it is anticipated that the Acquiring Shell Fund will be managed by the same portfolio manager, Kevin Loome, and who is expected to be supported by the same investment personnel as was the case with the Acquired Fund.
Under the terms of the Plan, Class A and Class C shareholders of the Acquired Fund will receive Advisor Class shares of the Acquiring Shell Fund, and Class I and Class R6 shareholders of the Acquired Fund will receive I Class shares of the Acquiring Shell Fund, in proportion to the relative net asset value of their shareholdings of Class A, Class C, Class I, and/or Class R6 shares, respectively, of the Acquired Fund. In addition to the Advisor Class and I Class shares to be issued in the Reorganization, the Acquiring Shell Fund will also offer another class of shares called Investor Class shares.
Before the Reorganization can occur, the Plan must be approved by shareholders of the Acquired Fund. Detailed information on the proposal will be contained in proxy materials that are expected to be filed in the near future.
The foregoing disclosure is not intended to solicit a proxy from any shareholder of the Acquired Fund. The solicitation of proxies to effect the Reorganization will only be made by a final, effective Registration Statement on Form N-14, which includes a definitive Proxy Statement/Prospectus, after that Registration Statement is declared effective by the Securities
________________________________________
and Exchange Commission (the “SEC”). The Registration Statement on Form N-14 has yet to be filed with the SEC. After the Registration Statement on Form N-14 is filed with the SEC, it may be amended or withdrawn and the Proxy Statement/Prospectus will not be distributed to shareholders of the Acquired Fund unless and until the Registration Statement on Form N-14 is declared effective by the SEC.
Shareholders of the Acquired Fund are urged to read the Proxy Statement/Prospectus and other documents filed with the SEC carefully and in their entirety when they become available because these documents will contain important information about the proposed Reorganization. The Proxy Statement/Prospectus will contain information with respect to the investment objectives, risks, charges and expenses of the Acquiring Shell Fund and other important information that Acquired Fund shareholders should carefully consider.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUS,
SUMMARY PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE REFERENCE

FYI:
Regards,
Ted
http://video.cnbc.com/gallery/?video=3000596465&play=1

Gambling is not a word I want associated with my retirement portfolio.
"Would MFO exists if everyone indexed?"....I wish someone would have forum posted me senseless years ago about the virtues of indexing. It would have made me a lot more money.
I respect your right to invest as you see fit with your money.

I agree with you. At least since the market bottom in early 2009 I have seen scant evidence MFOers have beaten a buy and hold in the Vanguard S&P 500 fund. Or for that matter come remotely close. Lots of international and emerging market investing and love for cash rich funds as well as alternative funds. The latter out of fears of another 2008.
Edit; Yes, I know it has been a relentless move up the past 8 years and 8 years may not be a long enough period to make any kind of judgement. But I know countless passive investors who are now set for life thanks to those 8 years. And isn't that what it is all about??