IMHO, market neutral funds may or may not work in bear markets. Emphases on may not. And they surely do not in any other market. Hence, no need for any fund called market neutral. They all sport different magic and any of the processes used in these funds only work under specific conditions. Any other condition deems them useless. A marketing scheme for the tepid investor. If you don't believe they are a marketing scheme, count the number of these funds today versus 5 or 6 years ago.

No bashin Cashin today. Gotta show some respect. :)
Hope he had a swell 50th!

"The Board of Trustees of the Birmiwal Investment Trust......has concluded that due to the relatively small size of the Fund, it is in the best interests of the fund and its shareholders that the Fund cease operations."
The fact that BIRMX has lost 55% of its value while the S&P 500 index has doubled over the past five years couldn't have something to do with it, could it ??
Just asking.

http://www.sec.gov/Archives/edgar/data/1527446/000116204414001548/hagin497201412.htm
497 1 hagin497201412.htm
HAGIN KEYSTONE MARKET NEUTRAL FUND A series of Cottonwood Mutual Funds Supplement dated December 30, 2014 to the Prospectus and Statement of Additional Informationeach dated June 30, 2014 (as supplemented from time to time)
The below information was provided to shareholders of the HAGIN Keystone Market Neutral Fund (the “Fund”) on or about December 16, 2014. Effective December 30, 2014, the closing date of the liquidation of the Fund is changed to January 15, 2015. All references in the below information to December 30, 2014 are hereby replaced with January 15, 2015.
* * * * * * * *
The Board of Trustees (the “Board”) of Cottonwood Mutual Funds (the “Trust”) has approved a Plan of Liquidation (the “Plan”) relating to the HAGIN Keystone Market Neutral Fund (the “Fund”), effective December 16, 2014. HAGIN Investment Management, the Fund’s investment adviser (the “Adviser”), has recommended to the Board to approve the Plan based on its representations of its inability to market the Fund and the Adviser’s indication that it does not desire to continue to support the Fund. As a result, the Board has concluded that it is in the best interest of the Fund’s shareholders to liquidate the Fund.
In connection with the proposed liquidation and dissolution of the Fund called for by the Plan, the Board has directed the Trust’s principal underwriter to cease offering shares of the Fund immediately as of the date of this Supplement. Shareholders may continue to reinvest dividends and distributions in the Fund or redeem their shares until the liquidation.
It is anticipated that the Fund will liquidate on or about December 30, 2014. Any remaining shareholders on the date of liquidation will receive a distribution of their remaining investment value in full liquidation of the Fund. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1.877.257.4240.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated June 30, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated June 30, 2014 have been filed with the Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1.877.257.4240.

http://www.sec.gov/Archives/edgar/data/1215881/000141304214000349/birmiwalcls497.htm
497 1 birmiwalcls497.htm
Birmiwal Oasis Fund
(BIRMX)
Supplement dated December 30, 2014 to the Prospectus dated August 1, 2014
____________________________________________________________________________
The Board of Trustees of the Birmiwal Investment Trust, on behalf of the sole series of the Trust, the Birmiwal Oasis Fund (the "Fund"), has concluded that due to the relatively small size of the Fund, it is in the best interests of the Fund and its shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all remaining outstanding shares on January 30, 2015.
Effective December 30, 2014, the Fund will no longer pursue its stated investment objective. The Fund will begin liquidating its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Any required distributions of income and capital gains will be distributed as soon as practicable to shareholders and reinvested in additional shares, unless you have previously requested payment in cash. Shares of the Fund are otherwise not available for purchase.
Prior to January 30, 2015, you may redeem your shares, including any reinvested distributions, in accordance with the "Instructions For Selling Fund Shares" section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, any redemption is subject to tax on any taxable gains. Please refer to the "Taxes" section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO JANUARY 30, 2015, WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE, AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1-800-417-5525 or the Fund’s adviser, Birmiwal Asset Management, Inc., at 1-206-542-7652.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated August 1, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated August 1, 2014, have been filed with the Securities and Exchange Commission, and are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1-800-417-5525.

Once or twice a year, I try to find something comparable to FLPSX and fail (at least according to the metrics that matter to me, such as cost, portfolio, etc).
The portfolio is value-leaning, non-large cap, low turnover (12%), 1/3 foreign. IMHO, it's that last factor that explains the relative underperformance the past few years. It's a global stock in all but M* classification. Which is not a bad thing if that's what you want. For that sort of fund, it's doing quite well.
I think I finally did find a possible alternative. Polaris Global Value (PGVFX). But here's the thing - it is classified a global stock, and is somewhat more heavily foreign weighted (60/40 foreign/domestic).
Having more foreign stocks, it doesn't match FLPSX in performance - but it does tend crudely track the same performance curve, and it helps if one wants/needs a bit more foreign exposure. (Since domestic stocks have been outperforming foreign ones, a person's portfolio could easily have tilted "too much" toward domestic.)
It's more tax efficient (both relative to FLPSX, though this may be because it is still sitting on losses from 2008-2009 (per website). On an absolute basis), it falls into the same mid cap value box (though with slightly higher average market cap). Same low turnover (14%).
This has been a fund on my radar for years, but I always considered it too expensive (and in the past have been disinclined to buy global funds). But it has temporarily lowered its ER (it remains to be seen whether the temporary reduction will be renewed).
Finally, unlike FLPSX, one can benefit here from a foreign tax credit. The rule is that if a fund's portfolio is more than 50% foreign, then the fund is allowed to pass the foreign taxes through to you. FLPSX, at 1/3 foreign, can't do that. (Funds are not required to pass through the taxes, but they usually do.)
Just an offbeat thought on a replacement or complement to FLPSX. I'd say it was thinking outside the box, but part of the appeal is that it falls within the same style box.

+1 to msf. I would leave well enough alone, suck it up in April, and certainly not bail on Danoff and Tillinghast based on the last few years, nor even necessarily switch from Fido to Vang (though the CG points are noted). But your position is popular among some, even in the 15% bracket, and I recognize that this might sound argumentative.

Hi David - I appreciate your comments even though I may not agree with all of them. Let's take FLPSX, for example. Tillinghast is very well respected as we all know. However, he is slowly easing away from managing this fund and will not be there forever. If you compared FLPSX with a Vanguard Mid Cap Index fund, say VIMAX, then Tillinghast's fund loses on tax adjusted returns over the 1, 3, 5 and 10 year time periods. Not bad for an index fund. FLPSX loses to VMVAX as well although the latter is a newer fund. Both index funds are more tax efficient as well. UMBMX doesn't come close to either index fund in terms of tax-adjusted returns.
I am in the 25% tax bracket, BTW.

+1 to msf. I would leave well enough alone, suck it up in April, and certainly not bail on Danoff and Tillinghast based on the last few years, nor even necessarily switch from Fido to Vang (though the CG points are noted). But your position is popular among some, even in the 15% bracket, and I recognize that this might sound argumentative.

Thanks for the reply, MSF. Some of the funds I've mentioned have had a record of paying out big distributions, such as FLPSX and UMBMX. Neither one of those funds have performed well over the past three years, either. FCNTX was particularly bad this year as well with a huge distribution. My point is that I would rather settle for slightly lower returns and not get hit with big distributions rather than the other way around. That's just my preference. With the size of my portfolio, I don't need to hit home runs with funds - singles or doubles will suffice. What I don't like is cutting a larger tax check than necessary every April 15.
Your points are well taken and I will certainly take a look at some of those Vanguard ETFs and indexes.

Keep in mind that this year is a bit unusual in terms of distributions.
2013 was a fantastic year. If funds were still sitting on realized but undistributed losses going back to 2008, they all but surely used them up that year. (Funds are required to distribute substantially all of their net gains each year, but if they have losses, they can't distribute them. Instead, they are allowed to use them against gains in future years - I believe for up to ten years.)
Follow that with an above average 2014 (domestically, anyway), and you've got the makings of disproportionately large distributions. It pays to keep things in perspective. For example, FMIJX (FMI Int'l) is in the 2nd percentile for 3 year after tax returns (excluding this year). And this is a very concentrated fund (29 stocks, plus some other securities) - do you want to replace it with a fund that has a gazillion holdings?
Don't overreact to one year's taxes and lose sight of the objective - net return, not minimizing taxes. The latter is easy - don't make money.
If you sell your shares, you'll wind up paying more taxes now (gains on the shares). If you want to make some moves, you might consider taking the distributions in cash, and investing them in newly selected funds.
I would be more inclined to use Vanguard than Fidelity for broad based stock index funds. They tend to have lower cap gains distributions (e.g. Spartan 500 made cap gains distributions this year and in 2007), Spartan Total Market made cap gains distributions in 2007-2010). You don't see these in the Vanguard funds. (Also, the Vanguard funds have ETF shares, so they have the tax advantages of an ETF, with no bid/ask spread.)

Take a look at Vanguard's Tax-Managed Balanced Fund (VTMFX). It is split 50/50 between U.S. stocks and municipal bonds. Good after-tax performance and low expense ratio (0.12%). I replaced VWIAX in my taxable account with VTMFX. Bear in mind, VTMFX is a bit riskier.
Mike_E

Thank you, Mike. Yes, VTMFX is on my radar for sure.

Avoid high turnover funds, funds with taxable bonds. This is about all I do. I have a few stocks that pay qualifed dividends. I am in 15 % tax bracket with most of investement in IRA and Roth. I have a small annuity with no tax issues.

Take a look at Vanguard's Tax-Managed Balanced Fund (VTMFX). It is split 50/50 between U.S. stocks and municipal bonds. Good after-tax performance and low expense ratio (0.12%). I replaced VWIAX in my taxable account with VTMFX. Bear in mind, VTMFX is a bit riskier.
Mike_E

FYI: Wall Street legend Art Cashin will ring the opening bell today to mark his 50th anniversary on the floor of the New York Stock Exchang
Happy New Year,
Ted
http://www.businessinsider.com/art-cashin-50th-anniversary-2014-12
http://video.cnbc.com/gallery/?video=3000342714&play=1
http://video.cnbc.com/gallery/?video=3000342713&play=1
http://video.cnbc.com/gallery/?video=3000341905&play=1

FYI: If you’re reasonably bullish on the global economy – or at least not in the Crash Camp – Europe may present you with a nice set-up.
Regards,
Ted
http://thereformedbroker.com/2014/12/29/buy-europe/
European Stocks Could Rise 10%: (Click On Article At Top Of Google Search)
https://www.google.com/search?newwindow=1&q=europe+shares+could+rise+10%+Barron's&oq=europe+shares+could+rise+10%+Barron's&gs_l=serp.3...9721.11081.0.12347.2.2.0.0.0.0.53.97.2.2.0.msedr...0...1c.1.60.serp..2.0.0.B2Kfo2sz2OE

Hi Guys,
In contrast to the main theme of the referenced article, I do not find that the active investment world has been turned topsy-turvy. The active fund management performance this year is just a slight outlier from its normal dismal record. It is part of the nominal statistical data scatter.
The historical data suggests that active fund managers outdistance their passive equivalent benchmarks only about 30% of the time on an average annual basis. This year, that statistic will likely degrade to a mere 15%. That’s mostly noise and not a seismic shift in the tide.
The 2014 performance of active fund managers is yet another data point that buttresses the wisdom of passive Index investing. Managers who believe they can project primary asset class yearly incremental return changes or, on a finer level, return distributions as a function of sector classification, are chasing a shadow.
By overweighting their forecasts, active managers add to the standard risk of broad market return variations. This is doubling-down in the risk dimension. It is unnecessary.
The evidence that strongly suggests that this is an unfathomable forecasting task is embedded within the historical data sets themselves. It is contained in the various Periodic Table of market Returns. Here is a Link to the famous Callan Periodic Table:
https://www.callan.com/research/files/757.pdf
Here is a Link to the slightly less famous MSCI Sector performance Periodic Table:
http://www.msci.com/resources/factsheets/MSCI_USA_Sector_Indices_Returns_and_Volatilities.pdf
The obvious, outstanding takeaway from these presentations is the completely random character of the annual returns. Predicting these annual position changes with any accuracy is simply not possible.
The commitment that active management makes to their dubious projections explains a significant fraction of their performance challenges. Management and trading costs add to those challenges.
So, I take issue with the articles title “2014: The Year that Nothing Worked”. Some things have worked quite well. Overall, the markets are returning rather normal rewards in various pieces.
Active market investment wisdom seems ephemeral. Those few who enjoy some annual success seem to be one-trick ponies. It is tough to repeat superior excess returns. This too has a firm statistical basis. Market heroes over time are a very rare breed. The unpredictable nature exhibited by all sorts of Periodic Investment Tables illustrate why this is so.
These data support the need for broad market diversification. These data document the folly of active fund management once again, however, this time with an exclamation point for emphasis.
Best Wishes for the coming New Year and beyond.

http://individual.troweprice.com/public/Retail/Planning-&-Research/T.-Rowe-Price-Insights/Fund-Manager-Views/Asset-Allocation-Striking-the-Right-Balance?placementGUID=em_id_escid444714_COR&creativeGUID=EMHDRHT&v_sd=201412
Neutral Between Stocks and Bonds
Favor Non-U.S. Over U.S. Equity
Favor U.S. Large-Cap Over U.S. Small-Cap Equity
Favor U.S. Growth Over U.S. Value Stocks
Favor High Yield Over U.S. Investment-Grade Bonds
Favor U.S. Investment-Grade Over Non-dollar Bonds
Favor Global Equity over Real Assets

FYI: (Click On Article Title At Top Of Google Search)
The money-management industry’s push to bring hedge-fund-style trading to the masses has suffered a setback.
Investors yanked more than $5 billion so far this year from the largest and most popular “liquid-alternative” mutual fund as losses mounted on bad bets tied to the global economy, according to fund-research firm Morningstar Inc. Assets in the MainStay Marketfield fund have fallen 45% from a February peak of $21.5 billion.
Regards,
Ted
https://www.google.com/search?newwindow=1&site=&source=hp&q=hot+funds+take+wrong+turns++qsj&oq=hot+funds+take+wrong+turns++qsj&gs_l=hp.3...1711.13190.0.13531.31.31.0.0.0.0.76.1725.31.31.0.msedr...0...1c.1.60.hp..13.18.1048.ibd_QpaCRa4
M* Snapshot Of MFADX: http://quotes.morningstar.com/fund/f?t=MFADX&region=usa&culture=en-US
Lipper Snapshot Of MFADX: http://www.marketwatch.com/investing/fund/mfadx
MFADX Is Unranked the The (L/S E) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/long-short-equity/mainstay-marketfield-fund/mfadx
Mutual Fund Wire.Com Slant; http://www.mfwire.com/common/artprint2007.asp?storyID=50446&wireid=2
Bloomberg Slant: http://www.bloomberg.com/news/print/2014-12-29/mainstay-marketfield-suffers-eighth-month-of-redemptions.html

Hi Dex,
Sorry for my long delay in reading and responding to your post. During this holiday season my dance-card has been especially full.
Thank you for your line-by-line review and commentary on the Morgan Housel rules of investing engagement list. I do not agree with many of your observations, but I appreciated all of them.
I really believe that we learn much more from opinions that run contrary to our own than from ones that completely coincide with our thinking. Diversity is good in many areas beyond the investment universe.
But I was flabbergasted by your heavy discounting of the value of reading. I seriously doubt you truly meant your closing statement about reading less and getting smarter.
I too almost totally abstain from viewing the TV business networks. They introduce murkiness and anxiety rather than clarity and calm. They encourage imprudent impatience and unwarranted trading action. I pass on them.
I do much reading from a carefully screened and selected group of market expert writers. I certainly concur that all writers are not equal, and some discriminating criteria need to be applied. I do so.
By way of an unfair comparison, I learn much more. with higher trust coefficient. from this cohort than from the MFO discussions. Often the MFO submittals are far too abridged to secure the required trust level, especially given that the contributor qualifications and incentives are unknown.
Currently, I count Charley Munger among my favorite investing writers.
Please note that both Munger and his partner Warren Buffett are dedicated and committed readers.
By not following that pattern you are choosing to ignore the advice and practice of these two giants. I suggest that you consider adopting their regimented approach. A summary of their method was provided in a 2013 article. It is titled “The Buffett Formula – How to Get Smarter”. Here is a Link to that excellent piece:
http://www.farnamstreetblog.com/2013/05/the-buffett-formula-how-to-get-smarter/
Please access this fine presentation of the Buffett-Munger study routine You could not do much better than to at least give their method a try. It works for them, it works for me, and it is likely to work for you if you give it some serious time. Good luck.
Best Wishes for next year.

Response to Hank:
My bet is that oil (price of WTI per barrel) will be between $70 to $80 by end of 2015. That is why I think buying into energy stocks that are not highly leveraged and energy & midstream MLP ETFs at this time is a winning investment strategy for 2015, with a small but well-defined downside and significant upside.