25% Cash,17% Utilities,20% Long G'Bonds propel Bruce Fund, BRUFX, just short of all time high and a 5.76% Y T D gain.Today's close $ 525.13 +1.71 +0.33%
All time high 526.55 on 06 /09/16
http://www.thebrucefund.com/files/documents/Bruce33116FormNQ.pdf
https://secure.ultimusfundsolutions.com/PAWeb/FundInformation/FundPrices.aspx
http://portfolios.morningstar.com/fund/summary?t=BRUFX&region=usa&culture=en_US

If an investor utilizes an empirically derived, systematically based, risk managed process with a diversification over varied asset classes, then long term results and investment decisions are less affected by geopolitical events and emotionally driven financial news.

I keep thinking of the Japanese.
http://finance.yahoo.com/echarts?s=^N225+Interactive#{"range":"max","allowChartStacking":true}
And the S&P with its double tops
http://finance.yahoo.com/echarts?s=^GSPC+Interactive#symbol=^GSPC;range=my
Eventually, 'this time is different' happens.
I don't think the Brexit will do it. I think will be acknowledging deflationary pressures will be the cause. We are not there yet. And it is a difficult idea for the news media to see and understand.

Only a handful of geopolitical events have led to / accompanied major market corrections. One factor that has repeated over time has been the slowing of market activity / dry up of liquidity, the increase in market volatility because of exogenous events during the summer / fall months, and favorability of earnings reports, pick up of volume/liquidity and institutional allocations into equities in the fall / winter / spring months. If an investor utilizes an empirically derived, systematically based, risk managed process with a diversification over varied asset classes, then long term results and investment decisions are less affected by geopolitical events and emotionally driven financial news.
For example, investing in a blend of small cap value and emerging small cap from Nov 1 to Apr 30 and then switching to utilities sector or cash equivalents ( depending on "high risk" signaling instruction from risk profile variable * ) from May 1 to Oct 31 of each year, forward 5 year total returns periods after 10 major geopolitical events over the last 60 years have produced: > 100% in 7 periods and 50% - 100% in 2 periods with no losing periods.
A higher confidence of an investment process' returns involves a review of 5 year total returns after market peaks and then subsequent market corrections of > 5%.
Since 1954, forward 5 year total returns periods for the small cap value / emerging small / utilities / cash process after the "peaks" have produced > 100% in 11 of 24 occurrences, between 50% and 100% in 8 out of 24, with no losing periods with median 5 year return = 87% vs. 43% for S&P500 buy & hold. Median 5 year return periods outside of correction occurrences = 114%.
In summary, market corrections and geopolitical events are temporary. An investor who has utilized a robust tactical investment process combined with superior asset class selection, and has been disciplined and patient for at least 5 years has been well rewarded.
* quantitative price based variable # 2 https://docs.google.com/document/d/1u5PjMjpeLICy8fa-34c89oHqV6bghPTipGO_0IY3VRc/edit?usp=sharing

https://www.sec.gov/Archives/edgar/data/912036/000119312516632251/d191503d497.htm
(too long to post)

https://www.sec.gov/Archives/edgar/data/1023391/000089853116000863/fmif-497e.htm
497 1 fmif-497e.htm FMI FUNDS SUPPLEMENT TO THE SUMMARY PROSPECTUS AND PROSPECTUS 6-27-16
Filed pursuant to Rule 497(e)
1933 Act File No. 333-12745
1940 Act File No. 811-07831
FMI Funds, Inc.
June 27, 2016
Supplement to the Summary Prospectuses and Prospectus
each dated January 29, 2016, as supplemented to date
FMI Large Cap Fund and FMI Common Stock Fund Re-Opening to All Investors
The FMI Large Cap Fund and the FMI Common Stock Fund (together, the “Funds”) have been closed to new investors. The Board of Directors of the FMI Large Cap Fund and the FMI Common Stock Fund recently voted to re-open both Funds to all investors. The FMI Large Cap Fund and the FMI Common Stock Fund will both re-open to all investors effective June 30, 2016. All references to the FMI Large Cap Fund and the FMI Common Stock Fund being closed to new investors are hereby deleted from the Summary Prospectuses and the Prospectus effective as of June 30, 2016.
* * *
The date of this Supplement is June 30, 2016.
Please retain this Supplement for future reference.

I fear we will not know the full impact of the Brexit decision for many years, and that this impact may be much more that stock market fluctuations.
Putin has been consolidating power recently, and a less united Europe plays into his hands. This is probably my biggest fear. I think the folks arguing to leave were sold a bill of goods, and are suffering near term buyers remorse. The larger impact may indeed be down the road with a destabilized Europe.

That is true. Look at the middle east. The world is reaping what was decided in WWI!
http://www.bbc.com/news/world-middle-east-25299553
But as I posted in another thread the EU was going against the historical trends. We can expect more countries to leave the EU in favor of localized government.
Longer term Europe will build stronger ties with Russia and it will not be a bad thing for them. And it will be going back to what it was historically - Russia, just another western European country. Russia is not the USSR, it is facing the same problems as the western European countries.

Only a handful of geopolitical events over the last 50 years have produced major forward negative returns.
If an investor utilizes an empirically derived, systematically based, risk managed process with a diversification over different asset classes, then long term results shouldn't be affected by news driven, geopolitical events.
For example, investing in a blend of small cap value and emerging small cap from Nov 1 to Apr 30 and then switching to utilities sector or cash equivalents ( depending on signaling instruction from risk profile variable * ) from May 1 to Oct 31 of each year, forward 5 year total returns periods after 10 major geopolitical events over the last 50 years have produced: > 100% in 7 periods and 50% - 100% in 2 periods with no losing periods.
A more compelling test of an investment process' returns involves a review of 5 year total returns after market peaks and then subsequent market corrections of > 5%. Since 1954, forward 5 year total returns periods for the small cap value / emerging small / utilities / cash process after the "peaks" have produced > 100% in 11 of 24 occurrences, between 50% and 100% 5 year total return periods in 8 out of 24, with no losing periods.
* quantitative price based variable # 2 https://stockmarketmap.wordpress.com/2015/11/14/market-map-model-tactical-asset-allocation-using-low-expense-index-etfs-2015/

Puddn,
In retirement I am a big believer in serious simplifying and in true diversification. Nothing wrong with leaving as is. But if you backtest and compare 2/3/5/7/10y, and more, you may see that your diversification spirit has not really added much (if any) value.
I did not mention FLPSX, NICSX, or AKREX in lieu of GLBRX plus augmenting existing bond funds because I didn't want to add good MC choices; I think there is too much of that going-overboard 'add' spirit going around.
For example, I bet there is a lot of bond overlap w Vang, Pimco, DoubleL, and James.
PRBLX is not really narrow; again, look at what 40 or so good LC stocks has gotten you historically compared with 500.
You may have sleep@night and obsessing factors involved, of course; I do. But I am trying to boil my holdings down to DSEEX and PONDX, and some RE, with a little fooling around on the side in SC, MC, and foreign funds. Plus some foolish individual loser stocks.

If you want to avoid the TF buying GLRIX, Fido will convert GLRBX to GLRIX on request once you own at least $50K.

“Forecasting is the art of saying what will happen, and then explaining why it didn’t”. The data show that market forecasters are well practiced at that art.

Love it.
Thank you MJG.
I fear Brexit is another example of "scorched-earth" politics, but one that actually succeeded. Hard to believe that such an important national decision could be decided with just a simple majority, instead of say two-thirds.
(Another example of such politics is the refusal to vote on Supreme Court nominee Merrick Garland.)
Financial sectors hammered Friday, since so-called passporting rules, which I believe allow banks based in London to operate seamlessly in other European countries, are now up in air.
Might read the brilliant and perhaps more disturbing piece published in The Atlantic recently, entitled "How American Politics Went Insane".
Thanks again.
Hope all is well.
c

Hi rjb112, Hi catch22,
Thanks for reading my post. I was trying to lighten the mood.
Catch, you presume correctly. I wrote the brief paragraph emphasizing that the world economy one day before the Brexit vote was essentially the same as the day after the vote. It was a little tongue in cheek. I do expect some adjustment over a longer timeframe, but then a new normal will be established that has a relatively minor impact on the US stock market.
I have little confidence that my future guesstimate will be accurate. I'm just having some fun. My forecasting record likely equals that of the experts. It's equivalent to a 50/50 coin toss.
Best Wishes.

Hi guys!
Thank you for your input. Will retire at 61. The company will pay me to leave. At 62, I will get pension and social security. All things paid: house, cars, college, etc. As far as an estate, what is left will go to an only child. We would like to leave him the house, for sure. After that, it's just gravy. As far as overseas, it is concentrated. Friday showed me that. I guess I should spread it out more.....maybe an index fund, but no more %-wise. Europe is a mess, and I don't see it getting better. I think soon it will be China again. I like home better.
As for right now, my 401k is with FIDO---also a brokerage account. The only fees I've paid were for Wellesley ($75.00). This portfolio is not all set up yet.....it's a build in progress.
As far as other houses, I really want to stay with FIDO. I like their website and understand it.
Risk tolerance is conservative. 3% would be fine. My wife works at the Post Office and will be working for about 4 years after I retire. She will get pension and SS, also, along with a 401k (Thrift Savings Plan - TSP).
So, all income I want to go to MM fund to be used to buy more shares or for spending as we see fit. This portfolio does not have to outlive me......a house is enough, I think, for now.
Also, I have WAVIX and PTIAX as two (2) that might go along also.
God bless
the Pudd

Part of VMVFX's outperformance (relatively speaking) can be attributed to the fact that it is currency hedged. To put this in perspective, TBCUX fell 5.17%, while TBGVX fell "just" 3.51%. Still significantly more than VMVFX, but a lot closer than its unhedged sibling.
"ARIVX isn't really a fair comparison here - it's like 88% in cash, according to M*."
That's true so far as comparing the magnitudes of the changes (i.e. mostly cash by definition dampens volatility). But the fact that the change was positive speaks to the portfolio. Specifically, that its top three holdings (half of its non-cash) are in gold and silver.

It's hard to make constructive suggestions without knowing more about your situation...
What percentage you plan to draw (and will SS kick in before or after you start, which could affect weightings), are you looking to leave an estate (which would argue for more equity, since that's invested for a longer lifetime), etc.?
So here are a few comments and observations on the edges:
- This is weighted about 50/50 - including 30% in equity funds, 40% in Wellesley (1/3 equity), 20% in Golden Rainbow (1/2 equity). Might be okay for a shorter time frame portfolio, but for 30+ years, a tad more equities might be in order, especially given the low yields in bonds now and likely for several years.
- It's somewhat light on foreign exposure (about 8% of portolio), though not exceedingly so (i.e. as a percentage of equity, it's about 1/6).
- The domestic funds are very diversified (except PRBLX), while the international holdings are highly concentrated (28 stocks in Lazard, 32 in FMI). Intentional or an artifact of the fund selection?
- Share classes. If you're buying through Fidelity (a reasonable guess, given two Fidelity funds), you might look at buying the TF institutional share classes. Especially for a retirement portfolio which you expect to be selling off (no fees). That saves you a lot in fees over the years.
Specifically: DBLTX ($5K min in an IRA), and if you've got over $250K in your portfolio (total), GLRIX ($50K min = 20% of $250K portfolio).
If you're not averse to having investments in multiple places, you could buy VWIAX directly from Vanguard ($50K min = 40% of a $125K portfolio). Scottrade appears to give you access (with $17 TF) to PIMIX with a $100 (not $100K) min.
Just some minor thoughts. All in all, a nice portfolio.

Hi Guys,
Much worry, much overreaction, much uncertainty, many diverse predictions from market prophets, and likely not much change whatsoever. I hesitated to contribute to this MFO dialogue that focuses on the Brexit event because I believe it will be modest in scope, in magnitude, and in timeline.
Over the world map, our population has not changed, our consumption characteristics have not changed, our entrepreneur cohort is constant, our wealth level remains at a high level, and the event will be spread over a generous timeframe.
As Alfred E. Newman arrogantly said: “What, Me Worry?” Here is a short music video that documents Newman’s famous saying:

On a far more serious note, here is a Link to a 10 minute Charlie Munger video that emphasizes the wisdom of staying the course during market disruptions:

Stock markets are a rollercoaster ride. We must be flexible enough to absorb all dislocations; they happen frequently enough. The long term history of various stock markets clearly demonstrate the robustness of our industrial revolution.
Yes, the British decision will promote some reordering and redistribution of who does what and who makes what. But the marketplace does this all the time anyway. Often, it's identified as progress.
As I reported earlier, I am not making any change to my portfolio. Sometimes, it’s a challenge, but I am committed to sitting on my investments.
Experts fail at the prediction game. Most experts predicted that the Brexit initiative would not be accepted. They were wrong about that; they will likely be wrong about the impact of that decision also.
As Lao Tzu observed: “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.” An anonymous source adds that “Forecasting is the art of saying what will happen, and then explaining why it didn’t”. The data show that market forecasters are well practiced at that art.
Given the cumulative cataclysmic world events that we have survived, recovered from, and finally prospered from, the Brexit vote hardly deserves to qualify for that list. I don’t sweat it and plan to stay the course. Naturally, I encourage each of you to locate and follow your own North star.
Patience and commitment will be rewarded. Don’t trust me; trust the market historical data sets. Calm carries the day.
Best Wishes.

I wonder if you guys could give some advice about this preliminary portfolio. I'm trying to draw one up for retirement.....it's still some time off......but I could use some more perspective and ideas on this. I would like to keep the number of funds down to a dozen or less, if I could:
VWINX - 40%
GLRBX - 20%
PONDX - 5%
DLTNX - 5%
FUSVX - 10%
PRBLX - 5%
FSCRX - 5%
GLFOX - 5%
FMIJX - 5%
What would you change? Funds? Percentages? Or both???
God bless
the Pudd

ARIVX (up .09%), ICMTX (down 2.30%), AUENX (down 2.57%)

Hi @FundStudent,
Neither did Old_Skeet get sucked in either.
Being a retail investor, and not a trader, by my valuation matrix indicates stocks, in general, are still to expensive as of Friday market close for the S&P 500 Index (2037) for me to increase my allocation in equities. I am thinking we still have a ways to go before a bottom is reached. Currently, I am looking somewhere around 1950 on the 500 Index before I open shop, during the summer, and devote much time towards my investing endeavors. With this, I am not following the markets during the day but I still do a daily and weekly portfolio close. My overall asset allocation bubbles as follows: cash 25%, bonds 25%, stocks 45% and other 5% according to my latest Instant Xray analysis of 6/03/2016. Please note, this is an adpative allocation, of sorts, that allows for some asset movement (upward or downward) within the allocation, from time-to-time, based upon market climate and my read on the markets. Currently, my range for stocks is 45% to 55% and was up above 65% a few years ago; but, as P/E Ratios have climbed, over the past couple of years, I have reduced my allocation to them.
I wish all a good summer ... and, most of all, "Good Investing."
Old_Skeet

My low volatility funds for 6/24: BLVAX was down 2.08%, VMVFX down 2.52%, JRSTX ("managed" volatility fund) was down 1.26%, and I'll throw GDMZX in the group (defensive strategy fund) which was down 2.27%. Given the S&P 500 was down 3.59%, I'm not too disappointed with how they performed. I was concerned VMVFX was going to go down more than it did as it is a global fund, and foreign markets got pummeled.

Once upon a time investors thought active managers would protect them from a bear
market that idea seemed wrong to a large extent in 2008 and then 2011 was the last straw. When active managers failed to beat the S+P in 2011 it was time to be convinced by Vanguard ads. Almost as important were taxable investors being buried by unwanted capital gains in 2014 and 2015 distribution which was followed by a move to ETFs , Full disclosure my portfolio has been affected by this trend especially when long term holding Sequoia let me down really hurting the case for active management..