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.

Hi @ron,
Not JohnC,
As of 12/30/2016 my average duration within my overall portfolio is 3.4 years with an average maturity of 5.7 years according to Morningstar Portfolio Manager. Within my income sleeve I'm finding an average duration of 2.6 years with an average maturity of 4.6 years.
Since, I am not active on the fixed side of my portfolio like I am on the equity side I plan no changes on the fixed side in my funds; and, I will let my bond and hybrid fund managers determine how best to proceed concerning bonds.
However, if I were to do anything, I would add to my bank loan fund.
Old_Skeet

I will sometimes pare back but still a buy hold type. I still hold stocks owned as far back as 1978 1995, etc. some have merged, taken over but I never sell out a portfolio even during the worst crashes. So I guess I didn't mean when the trend changes I sell out, I've held when down 25- 45% because if I like what I have owned I will still own it. It has often been scary but almost always turns out for the better.

What I was demonstrating was how Hank's quick and dirty averaged total return (as contrasted with your averaged annual) figure compared with the true (geometric mean) annual return.
BTW, the new base was $20K, as the hypothetical started from $10K and doubled each year. To get $25K, you're mixing and matching. You're computing intermediate values based on a multi-year annual rate (150%), and then turning around and using those intermediate values to compute piece-part individual annual rates.
To be fair, that will tend to give a closer approximation of each year's rate. But at the expense of many calculations (each year's approximate value), still leading to an overestimation of annualized rate in most cases. If you're going to all that effort, you might as well look up the real annual rates.
Since I picked a constant rate of growth (each year's rate of growth is 100%), the arithmetic average of those rates equals the geometric average. It's only when rates fluctuate that the former exceeds the latter.

The second year return would be 60%... $15k on the new base of $25k... So the "average" annual return would be 105% ((150%+60%)/2). Either way, "average" annual returns are worthless, IMO.

@Hank, you may need a little coffee this early in the morning. 2/15/12 to today (1/3/17) is a tad under five years, not four. What was that about calculators? :-)
Glad to see you mention that "true" (compounded) interest rate is a bit lower than the (arithmetic) average rate you computed.
For example, if a fund doubles in value, then doubles again, it's going from $10K to $40K in two years; a gain of $30K. That "averages" $15K/year, or 150% of the initial investment each year. But the compound rate is "just" 100% (we assumed an annual doubling).
Like yours, my eighth grade math teacher was also one of my best. I used to stay after school doing math puzzles with my teacher. No, not a crush, I really did like this stuff. Now my 10th grade teacher, that was one to have a crush on. But I'm still miffed at getting my lowest math grade, ever, from that teacher.

Balvenie is my go-to scotch. I prefer the Carribean Cask myself, but they're all excellent.

Hey, guys. I was just checking my MATH, is all. I'm mathematically challenged. I'm holding, not adding. And for the New Year, THIS was a real find:
http://sr1.wine-searcher.net/images/labels/04/46/the-balvenie-doublewood-12-year-old-single-malt-scotch-whisky-speyside-scotland-10560446.jpg

Good year, in 2016. I've been in it for a bit more than 4 years. Is it really up by about 15% in 4 years---or so? Double checking myself.

Lipper shows $10,000 invested in this fund at inception on 2/15/12 to be worth $12,368 today: http://funds.us.reuters.com/US/funds/overview.asp?symbol=SFGIX.O
Here's how I learned to do percentages:
1. Subtract initial value from current value = a difference of $2368 (represents gain).
2. Divide the gain ($2368) by the initial investment ($10,000) = 0.2368.
3. Shifting decimal 2 points to the right gives you the 23.68% increase in value since inception.
4. Dividing above by 5 (approximate years of existence) gives a very rough (slightly understated) return of about 4.74% per year.
You can further refine this by dividing that 23.68% increase in value by 58.5 (the approximate number of months the fund has existed) resulting in a monthly gain of aporoximately .405% and than multiplying that by 12 (number of months in a year) to arrive at an annual average gain over that period of: +4.86%. Geez - Considering the amount of risk assumed in investing in emerging markets, I'm not impressed.
Regarding Balvenie 12-year (from your later post), a check of the store shelf finds that selling for about $50 locally. The best I can afford, occassionally, is Tomatin 12 year, selling locally for $33. Doing the math I find your single malt priced about 51.5% higher than mine. I'm sure you find it better tasting.
I learned my best math from Miss Milton in Eigth Grade back in the late 50s. (She was actually the school librarian.) My high school math teacher, by contrast, was a dork. And, can't remember taking any math classes in college. I'll say, if you needed to do any math back in my younger days before the electronic calculator was mass marketed to the public it was quite an experience - and one you younger folks probably can't remember. :)
** There are several different ways growth can be expressed in percentages. For example, the figure I got is not the compounded rate of growth which I believe would be lower. But I still think my method useful for providing a rough comparison of performance with other funds during the same period. As for SFGIX: This fund is outside my normal risk perameters in retirement. While I might speculate in small amounts on this type of fund for short periods, it wouldn't do much for peace of mind or ability to sleep at night.

Some other taxable fixed-income mutual fund categories, not well represented in the AGG, with significantly different results per M* category return pages: multisector +7.6%, bank loan +9.2%, high yield +13.3%, emerging mkts +10.0%.
Short duration high yield funds (not a M* category): RSIVX +9.9%, OSTIX +11.0%.

Basically you're looking at bond funds whose portfolios land them in the lower left corner of the style box (short term, junk)?
That covers a pretty broad swath of funds. Bank loan funds, obviously. More generally, any floating junk (since the float keeps effective duration small). Also some other funds of interest: DBLTX +2.17%, JUCTX +3.92%, ZEOIX + 4.32%, DFLEX +5.48%, TGBAX +6.61%, BXIAX +14.59%.

@VintageFreak, In the World Allocation space, I would prefer MTOIX, which is available in Fidelity retirement accounts for a $500 minimum + TF according to a test trade I just made.
Kevin

Thanks. Will research. Only Schwab seems an option for me since minimum is $25000 and I'm not going to plonk that much all at once using MTRAX.