Interesting short read. I turn 70 in a few months. Based on my current health status and the life spans of my parents and grandparents, I currently have my investment time horizon set at 21 years. I would be 90 years old at that point. Its been set at 90 since 2014 when I added an annual review of my planning horizon to my annual year-end portfolio review process. So, the chart makes sense to me.

FYI: Investors are puzzling over the apparent paradox presented by the combination of stocks trading at or near all-time highs and a Federal Reserve that appears ready to deliver an imminent rate cut.
A look back at history shows that the Fed has been willing to cut rates with stocks at or near all-time highs in the past, but it’s a phenomenon that hasn’t been seen in more than 20 years. Market analyst Charlie Bilello last week noted on Twitter that since the Fed started targeting the fed-funds rate in 1982, it has delivered rate cuts with the S&P 500 SPX, -0.12% at an all-time high seven times — the last such cut occurring in January 1996.
Regards,
Ted
https://www.marketwatch.com/story/rate-cut-with-stock-market-at-all-time-highs-its-been-done-before-2019-07-15/print

FYI: Investment time horizon is a critical concept in building wealth. Most investors have very long investment time horizons, typically decades or more. Investment managers also require long time horizons to deliver on their investment thesis. Finally, stock market volatility diminishes substantially over time, with a 75% decrease in variability for 10 years versus one year. As a result, developing patience and a long-term perspective are key to building wealth. We are living longer and need to invest appropriately. Even at age 70, the investment time horizon is more than 20 years.
Regards,
Ted
https://www.advisorperspectives.com/articles/2019/07/15/long-term-is-longer-than-you-think

It has been an amazing year for bonds. So much so that MAINX lags iin its category (emerging markets bond) and in the 75th percentile. One of the best in that category over the past three years has been Vanguard’s VEMBX and it is up over 14% YTD.

I don't own it, but track it. Up ytd by +9.18%. That's totally, ridiculously amazing. Teresa Kong at the helm. MAINX. Will this fund beat its inception-year performance? (+13.62%.) Is it not also limited to Asian bonds? The Matthews house only does Asia.

@MFO Members: MJG & Hank: Rambling Men
Regards,
Ted :)

From a slightly different perspective: You can’t determine how much to set aside until you figure out where you’re heading after retiring. I agree in playing with different simulators as an educational experience. I sure did in the last 2 or 3 years before jumping ship and retiring, and also for 2 or 3 years after retiring as things were still falling into place. I did a lot of experiments with compound interest calculators and with the numerous suggested allocation models that existed online back than. Most fund companies had one of their own or had access to one. American Century’s proved especially helpful to me. Surprisingly, back than suggested allocations for those in or near retirement differed quite markedly from model to model. So in the end, a lot was left to the individual to work out. One suggestion for those facing retirement in the near future is to “look under the hood” at some of the “funds of funds” (like at T. Rowe) and observe how their managers allocate various assets for different life scenarios (generally expressed in a range of options from conservative investor to aggressive investor).
The simulators mentioned by both the article and @MJG and others all sound very useful in this regard. After you’ve been retired for several years you should have a good handle on how you’re faring, so I think simulators become somewhat unimportant. Rule #1 - Don’t quit a good paying and relatively secure job to transition into retirement unless you’ve run some simulations and are confident you have “all your ducks lined up”. Generally it’s better to err on the side of working longer and spending less in retirement than the other way around.
There’s much you cannot simulate ahead of time: Will you still be healthily enough or feel like working part time during retirement? What will taxes be? Will you or your spouse encounter unexpected health expenses? What will the inflation rate be? What type of returns will bonds and equities be yielding during retirement? What will your equity stake in your home be worth? How high will interest rates be if planning to use some of your home equity? What standard of living will you be comfortable with? And the “granddaddy” of all - How long will you live? Still, the unknowns persist. Few could have foreseen the financial collapse of ‘07-‘09 and the long term consequences for financial markets and investors. And how many models work with both the Traditional IRA and the Roth IRA (as well as a combination of both) during retirement to anticipate your outcomes? There’s a big difference between the two in how your standard of living eventually evolves.
I think a lot of simulators are “bottom up” in approach. They look at what your needs will be and than attempt to arrive at an investment strategy during retirement. I tend to focus more on a “top down” approach. With that approach one pays close attention to shaping an all-weather portfolio and financial plan that has a good chance of keeping pace with or outrunning inflation. That means that if inflation is running at only 1-2% during certain retirement years, you’ll be earning less on your investments. However, should it run at 7, 8 or even 10% your investments will by and large keep pace and protect you as much as possible. Caveat: Don’t trust the greatly understated government inflation numbers. It’s your inflation (as actually experienced) that counts. Not theirs.
@MJG - you were once known for rather verbose submissions. I assure you I’ve greatly outdistanced anything you ever achieved in that regard with this rambling (possibly nonsensical) one. :)

I wish something like a “10% Rule” was common knowledge when I started working in the 1970s. Nobody talked about saving for retirement then, and the stock market was considered a risky gamble. You could earn 12% interest from a money market account and my friends were more concerned about buying a car or house before prices went up again.
I didn’t start saving for retirement until my mid-30s when my employer started a 401k Plan. I contributed the amount that my employer would match, probably about 3% of my salary. I invested it all in cash and bonds because— again— stocks seemed like gambling. My employer provided no guidance or education about investment options, diversification, etc. Fortunately bonds did well during that period and even money markets paid 5-6%.
I finally got educated about investing when I left that job and rolled over my 401k and pension to an IRA. I was about 40 by then and immersed myself in financial literature. I invested the bulk of my savings in a diversified collection of stock funds, with a few bonds for safety, and never looked back. I increased my savings to about 10% of my salary including the employer match, and it all turned out OK in the end. For the last 20 years of my career, my employer had a pension but I kept contributing to a 401k, so my savings were closer to 15-20% of my salary— through my own ignorance because I didn’t realize that the pension was equivalent to saving about 10%.
Bottom line, for young workers or older ones who aren’t saving yet for retirement, the 10% Rule is a pretty good guideline for getting someone started in investing.

The article isn't too bad, as far as facts and figures. Perhaps it will cause a few readers who stumble across such a write to be more involved with their financial future.
So, before folks run to a "SIMULATOR" to determine the yet unknown they first must have a "STIMULATOR". Without a stimulator to help with motivation to save, there will be no need for the simulators.
So, let us count the ways. I've been pushing folks for 40 years to invest some of their wages; including the current campaign of setting up minor ROTH IRAs.
The "stimulator" has been in place with simple facts and figures.
The results have always been disappointing.
Boomers always seemed to want other stuff for "today's wants". Their children were not much different. In both of these groups, at least most were married and dual income households. But, the remaining free monies for investments (401k, 403b, simple IRA and then Roth IRA) were few.
The overwhelming response was the "markets" were too complex and they were not willing to use small pieces of their time to learn.
More recently, being since the market melt; finds remaining damage to household finances and problems finding jobs that pay a decent wage. This current period also contains those who do not trust market investments.
So, there are those households who have the monetary ability to invest; but still do not take any actions.
Ten percent of base pay seems are reasonable and easy path with which to begin; but I still don't see enough takers among educated and well paid 50 year old folk today.
Pretty sad and frustrating to and for me.
Good evening,
Catch

The article simplifies the problem to the point of absurdity. The "set aside" part is not a bad start, subject to the observations of msf (above).
The harder part is what does one do with that "10% set-aside". Just leaving it molder in a savings account isn't going to help much.

The rule given, to save 10% (including employer contributions) for retirement, is a bit simplistic, as even the writer acknowledges:

Of course, there will be times when you’re between jobs or you need your money for a pre-retirement-age emergency. In those cases, ...
Of course, everyone’s situation is and will be different, so 10% is a guideline, not a guarantee. (Furthermore, if you start later in life, 10% won’t be nearly enough.)

Still, one had better have a single number in mind. Otherwise, your employer is going to pick one for you when it automatically enrolls you in its 401(k). How do the tools you suggested help a 25 year old determine how much to set aside for retirement?
The column references an EBRI model that "estimates the risk of running out of money after retirement by taking into account many more factors than the usual online calculator: contributions, market changes, Social Security benefits and salary growth, as well as a range of health outcomes and longevity prospects."
It's a little ironic, criticizing the idea of identifying a target savings rate number as too simplistic, while praising a tool for its simplicity that essentially says: for this asset allocation and retirement spending rate, here's the magic dollar number you need to survive.
As I've said before, simulation tools (regardless of the underlying technology or simplicity) are better than a stick in the eye. By the same token, so is the suggested 10% savings rate guideline.

To me, the key takeaway is the futility of predicting interest rates. Last fall, it was considered gospel truth that the Fed would continue hiking interest rates through 2019 with some so-called gurus predicting rates as high as 5-6%. That scenario quickly unraveled over the winter.
Now the “experts” are predicting big cuts in interest rates. I’m not convinced, as that scenario could dissolve if inflation indicators start rising. Tariffs, low unemployment rates, and barriers to immigration could all contribute to inflation.

I agree with rforno and now is not the time.
PDI is selling at a 10.7% premium to NAV but one could substitute in PCI at a 1.9% premium and expect similar return results. The funds are identical in many respects. I own both in mass quantities but bought both at large discounts.
THW a worldwide healthcare fund is selling at a near 7% discount to NAV mostly because healthcare has been taking a beating pretty much everywhere this year. I own a sister fund THQ.
OXLC is a high-yield, double seatbelt fund selling at a 57% premium. Enough said.

The other link to this story seems to have been deleted now. Myself, Ol Skeet, msf (and perhaps others) had commented on it. As I mentioned on that thread, interest rates have pretty much been trending downward since the early 80s when Fed chair Paul Volker jacked up short term rates to stop runaway inflation. The 10 year treasury topped out north of 15% around than. As we know, declining rates increase the value of longer dated bonds, while rising rates work against bond values. So we’ve had nearly 40 years of favorable rate trends for bond investors (more than half the lifetimes of many of us).
Paul Volker didn’t do this alone. There was the financial crisis and global market meltdown of ‘07-‘09 which compelled central banks to push rates lower by assorted means. Inflation has been subdued thanks to retail giants like Amazon, less powerful labor unions and relatively cheap energy - due to fracking and other advances. Low inflation generally translates into lower interest rates (and improving bond values). Additionally, upward pressure on rates from the baby boomers buying first homes in the 70s and 80s has abated - helping drive rates lower as well. All good if you invest in longer dated high grade bonds.
The lower-quality bond market (ie: junk) has been helped by a record 10+ year U.S. economic expansion and bull stock market which finds itself 3 or 4 times higher than it was only a decade ago. Since lower rated bonds react (favorably or unfavorably) to overall economic conditions (and secondly to long term rates) junk and corporates have tended to follow the stock market higher.
The article is correct that the past 6 months have been “spectacular” for just about any type of bond / bond fund. Missing in the headline, but critical to the article, is that many prognosticators predicted rising interest rates for this year - while in fact rates have trended lower with the 10 year getting below 1.95% recently before closing above 2% at week’s end. I have no major criticisms of the article. However, unless you butter your bread on both sides by trading in and out of bonds - particularly the lower rated ones (as @Junkster does very well) - you probably shouldn’t be too focused on your 6 month bond return. Anything other than cash and ultra-short IMHO is best suited for terms longer than a year or two.
I’m glad Ol Skeet liked the article and kicked it over to the discussions + part of the board.

I own and like POLRX. Then again, why? Frankly, and this may apply to you, it shows up on lists of high performing funds. I track my funds on StockCharts.com and note that this fund is up 122% in five years (unfortunately, I haven't owned it for 5 years). I like that it is often in the top quartile of performing funds in its category. (TRBCX, another fund I've owned, is up 107% in five years). I just checked Morningstar which credits POLRX with having a formula that focuses on stellar high growth companies with little or no debt. Morningstar says this approach is intended to limit risk. We will see. On the caution side you should note that it has a portfolio of only 20 stocks (not a lot of diversification if they choose the wrong stocks). And note that the list of their stocks includes the same big name growth stocks that almost every other fund seems to own (Microsoft, Facebook, Alphabet, etc.). In summary, this is a high flyer that may flop big time if we hit a brutal decline in the market.

https://www.nytimes.com/2019/07/12/business/safe-invest-rally-gold.html
In the Search for Safe Assets, Investors Detour Around Gold
Everywhere, it seems, the world has been steeped in turbulence and strife, and that might seem to be the perfect setting for a major rally in gold, long considered an investment haven.

Bought into BIAWX on 28 May, 2019. Already way up in '19. On fire. But I've caught a +8.99% profit already. Take a look. Up ytd 28.43%. TRBCX is up fabulously, too. Mentioned by @Ted. I personally hate doing business with the most famous, most common domestic growth names. But some days, it seems that you just can't possibly avoid them. (Amazon, Boeing, Microsoft, etc.)

FYI: Make sure you understand leverage, each fund a lot)
What’s better than a portfolio that will pay you a $117,000 salary every year in retirement?
How about one that delivers a consistent paycheck each and every month that you can plan all of your regular expenses around?
I’ll show you how, via with three already-diversified high-yield monthly dividend stocks. But first, let me show you how most income investors get it wrong.
Regards,
Ted
https://www.forbes.com/sites/brettowens/2019/07/13/this-diversified-3-click-portfolio-yields-11-7-pays-monthly/?ss=etfs-mutualfunds#303cd9e81ad2
M* Snapshot THW:
https://www.morningstar.com/cefs/xnys/thw/quote.html
M* snapshot PDI:
https://www.morningstar.com/cefs/xnys/pdi/quote.html
M* Snapshot OXLC:
https://www.morningstar.com/cefs/XNAS/OXLC/quote.html

FYI: “Eventually, I’ll stop working.” Most of us think that and know it will happen, but millions of us worry whether we’re saving enough to live on once we do. We want to know: How much of my earnings should I set aside? What’s the magic number? 3%? 5%? 10%? More?
What your financial adviser won’t tell you:
Regards,
Ted
https://www.marketwatch.com/story/the-new-math-of-saving-for-retirement-2019-05-22/print

Exactly. PAUIX's 20% short SPX position in a raging 'bull' market back then definitely dragged hard on it. I held it for a while during/after the GFC but dumped it once I realized they had no plans to reduce/exit that short position as the world around them changed..

Hi, Catch.
Two versions of the fund: All Asset and All Asset All Authority. Both have a contrarian bent (i.e., more value than momentum hence less US and more foreign than their peers). The difference is the All Asset All Authority is permitted both leverage and shorting, which I warned folks about many years ago.
The vanilla version has substantially and consistently outperformed the souped-up on. Peer comparisons are hard because M* has changed All Asset's peer group three times in 10 years but, in generally, it has been a very solid performer (a little below average to substantially above) except for one period of about 30 months (in 2013-15). All Asset All Authority has kept the same peer group, has never excelled and has frequently stumbled. I'm guessing, though without detailed examination, that that's the cost of leverage and shorting.
For me, that is brief.
David