What does uncle Jeffrey say about this? DLFNX is holding 16.53% in cash. DBLTX holds 13.56% cash. (If we can trust that number from Morningstar.) I do think JG knows what he's doing. I remember an interview on Bloomberg tv a few years back. He simply said that he was "exploiting inefficiencies in the Market..... I wish I could teach it." With that latter phrase, he sounds like me, but I don't claim to know the Markets the way he does, though! I'm what you might call a RANK AMATEUR.

Hi LLJB,
Thanks for the link to J P Morgan’s 4th Quarter 2014 Guide to the Markets. Indeed good and useful information is to be found here. I plan to save the link.
I like your idea and it seems very sound to me. As a matter of fact my late father favored dividend paying stocks over traditional fixed income investments. He did carry some bonds for diversification purposes but felt a good dividend stock the better choice as it would over the years, most often, grow its dividend over time plus, in most cases, provide capital appreciation. And, I have not moved away form this concept either as my spiff is paying me a good dividend while I carry it and more so than a short term bond fund would but not what a high yield bond fund would pay.
One of his favorite strategies was taking advantage of the traditional fall and winter stock market rally which I now have now put in play, during the recent October swoon, and have named this special investment position “spiff.”
Putting this spiff into play has tilted my asset allocation somewhat along with the fact that many of my hybrid funds found in the growth & income area of my portfolio are also a little light in bonds and combined has made me light in bonds within my overall portfolio’s asset allocation ranges that I generally follow. My neutral allocation to bonds is about 30% and with me currently managing bonds at the 25% range has already put me at about 5% light. Now, I am at about 22% to 23% in bonds and wanting to work back towards the 25% allocation which I’ll do over the next few months, or so.
According to my quick review of the “Guide” it seems equities are the place to be.
Old_Skeet

Just wondering with no opinion because my choice during the summer was to eliminate bonds from my portfolio, but wouldn't there be an option to allocate some of the fixed income portion of a portfolio to dividend focused funds or etfs? I read in JP Morgan's Q4 Guide to the Markets that there's a positive correlation between stock prices and 10 Yr Treasury interest rates up to 5%. I've linked the guide and the page I'm referring to is page 12.
https://jpmorganfunds.com/cm/Satellite?UserFriendlyURL=diguidetomarkets&pagename=jpmfVanityWrapper
I think the current yield on the 10 Year is about 2.3%, which, in general terms of course, would suggest to me that we should have a decent opportunity in stocks for a while after rates start to rise.
If managers are reducing bond holdings and moving to shorter durations, my assumption would be the yields are also going down. I think, based on M*'s X-ray of my portfolio and reverse calculating, that the dividend yield on the S&P 500 is around 1.7%, which isn't great, but presumably a case could be made that the total return on a dividend focused strategy could match or beat the total return on shorter duration fixed income up to a 5% 10 Year yield if fixed income is losing on the price side.
I haven't gone through all the details enough to convince myself one way or the other (clearly its influenced by the particular stocks chosen) but thought its at least worth throwing it out there as an idea.

Hi Catch and others,
I am working on the coffee this morning too.
Seems, to me, when investors become faint at heart and rush for the exits in an attempt to build their cash positions asset valuations drop. This is one of the reasons Old_Skeet holds ample amount of cash to take advantage of these buying opportunities that usually take place several times a year.
I usually, build my cash position by selling equities into stock market strength. And, I may do this again and lean towards carrying a high level of cash. Currently, I am about neural in cash at about 15%, a little light in fixed income area and heavy in equity area. Come January, I am thinking of starting a sell down process in my equities if the market continues to advance and raise my cash by about 5% above neutral, buy a little fixed income to square the bond allocation to about the 25% range and then bubble equities a little on the light side through the sell down process as we move through the first and second quarters of 2015. I'd like to enter summer being a little light in the equity area by about five percent, or so.
In this way, come fall I can then begin to load equities and reduce cash by starting the "special investment spiff" process all over again to take advantage of the traditional fall and winter stock market strengths. Usually, stocks are the strongest in the fall and winter months and fixed income is strongest during the summer months with a transition period happening in between. However, the central banks have a lot to say about this tradition.
Anyway, this is Old_Skeet's thoughts as we move into December and start to close the year out as I am collecting all mutual fund capital gain distributions in cash. Come January, I’ll revisit this and most likely govern by my late father's old investment playbook.
I wish all … “Good Investing.”
Old_Skeet

Howdy @Old_Skeet and @JohnChisum
Are the equity managers of the groups mentioned in the ariticle also attempting to conclude what they will do if and when their equity holdings also encounter a "liquidity" event?
If high yield bonds and bank loans become illiquid to the point of "folks being scared"; will this not affect the equity sectors, too?
I remain with questions about the October 15, 10 year Treasury yield taking the big plunge. The below link is for your reading pleasure, including the comments section.
Note: You should be able to read this WSJ link with your first linkage. After that (a second read), not unless a subscriber or clear all browser history.
Hey, why did the 10 year T yield drop like a rock on October 15? Dunno, eh?
Other Google search links related to October 15
The musical chairs of investing remain in place.
More coffee please !!!
Catch

regarding MAINX, I found it interesting in the geographical listings that Cayman Islands is number 2 with 18.51% of the portfolio.

Hello, JC! Reassuring, thanks. And your final remark helps me understand why MAINX is not tracking so much higher, along with some other bond funds. M* has it in a "World Bond" category. I think they just didn't bother to look under the hood! My EM bond fund is PREMX, + ytd 6.75%. My domestic bond fund is DLFNX, up + ytd by 6.28%.

Morn'in @Ted
Thank you, and this CN post from Nov 11:
CN ETF

A little overdone on the headline,but an issue to contemplate:
Fund boards, management go on high alert around bond liquidity
BY JESSICA TOONKEL Reuters.com
NEW YORK Mon Nov 24, 2014 1:05am EST
The concern is this: As the Federal Reserve begins to raise rates, which many expect will begin to happen next year, investors will rush to sell bonds as their value drops in a rising interest rate environment. Historically Wall Street banks have been the buyers of these bonds, but regulations and capital requirements imposed since the financial crisis have forced these firms to slash their inventories.
"I look around and ask 'at the end of the day how easy would it be to sell what I own?', and the answer is it is much more challenging," said Jason Brady, a fixed income portfolio manager at Sante Fe, New Mexico-based Thornburg Investment Management, which has $70 billion in assets under management, $17 billion of which is in fixed income.
In the end, however, the best way managers can get comfortable with liquidity concerns is to be prepared to hold on to the bonds in their portfolio for the long-term, said Margie Patel, senior portfolio manager at Wells Capital Management, speaking Thursday at the Reuters summit.
"Liquidity is illusory for most bonds," she said. "The only time you need it is when you can't get it."
http://www.reuters.com/article/2014/11/24/funds-bondholders-alert-idUSL2N0TA1CH20141124

@Bee,
I'm just playing devil's advocate here, I know you've done very well with your LT Tsy investments, that was a great call, and because of you I intend at some point to buy EDV to hedge my stock market investment, but here is a possible other scenario:
1. Since the movement you describe has been widely trumpeted, it is maybe already priced in to current bond prices, and any surprise (say, an acceleration of growth in the Eurozone, an agreement by Germany to loosen fiscal policy, etc.) will send prices falling
2. The US economy hits lift off mode, but Yellen keeps to her promise to stay dovish for too long, so LT interest rates start rising with inflation fears: a Eurozone bond paying 1.5% when inflation there is 1% may appear more attractive than a US Tsy paying 2.5% when traders fear inflation in the US will hit 3%.
I'm not predicting this scenario, I've realized I'm not smart enough to time the bond market, but it's possible, no?

@john: (Click On Article Title At Top Of Google Search)
Regards,
Ted
https://www.google.com/search?newwindow=1&site=&source=hp&q=the+bulls+not+done++barron's&oq=the+bulls+not+done++barron's&gs_l=hp.3...1775.12646.0.12978.28.27.0.1.1.0.277.2089.24j2j1.27.0....0...1c.1.58.hp..10.18.1414.mA3EC-a3Rhg

The nice thing is that if you had purchased pretty much any of these funds 15 years ago you'd be very happy today even if you hadn't chosen the absolute best one. Likewise, if you think you can tell me which one will have done the best 15 years from now, please tell me so I can, well, think about it. :) I own both HQL and PRHSX, have been very happy for a while now and expect to continue investing when there are dips. The one thing I prefer about PRHSX over PJP or IBB, and actually I prefer it over HQL as well but I like the venture capital, is that for a very small increase in expenses you get someone to work for you. Of course that doesn't mean they'll do better, but at least there's some thought to the process, and its cheap management compared to what you have to pay most fund managers compared to a passive alternative.

FYI: Stocks can keep climbing next year, tacking even more gains onto their phenomenal run of the last five-plus years. Just don't expect them to be as big -- or to come with as little heartburn -- as before.
Regards,
Ted
http://bigstory.ap.org/article/daf4168d2e074966bfd5bb898da2cb3e/2015-stock-outlook-good-not-great-and-bumpy

Why not use the Lipper ratings directly instead of using the munging that WSJ contracted Lipper to do?

I would hope that Lipper is not fudging the numbers for the WSJ, but rather presenting a streamlined performance comparison from their more complete fund ratings.

Here you go:

FAIRX Fairholme Fund performance over various time periods:

Dear Mark,
Thanks a lot for this reply, it is an interesting explanation. Can you also plot HQH and HQL versus PJP and IBB which you can trade instantaneously? Of course, past performance does not guarantee much, but during the last 5 and 10 years PJP (pharma) and IBB (biotech) performed better than HQL and HQH. Both IBB and PJP are very tax efficient. How about HQL and HQH? I would really like to know it, I could not find this information in M*. Usually closed end funds are very tax inefficient, but maybe this rule does not apply to these funds?

Another way of looking at this is, what's a better investment a mutual fund or the mutual fund company's stock?
Of the two best stock performers:
Here's PRWCX vs. TROW:

Here's MCCPX vs BLK:

@Bee
My two cents' worth:
1. Yes
2. It depends on whether growth and inflation in the US accelerate enough to compensate for QE and sluggish growth abroad.
In Ted's link, there was this link with a pretty good summary of the bear case on LT bonds: http://business.financialpost.com/2014/11/19/bond-markets-to-get-rude-awakening-in-2015-cibc/
That said, I don't know who's right, and with so many people calling for LT bonds to fall, it certainly would be a contrarian trade to bet on their continued appreciation.

Might be good for mutual fund companies stocks...TROW, JPM, BLK. Here's a chart which includes a few other mutual fund companies that offer shares of their company (Legg Mason, Federated, Franklin Templeton and Alliance Bernstein). BLK is a standout.