Note in the article's pie chart which asset allocation from conservative to aggressive had the best returns over time.
Regards,
Ted

Thanks for the article Ted.
Here's an approach I would like others to comment on if you would be so kind.
For simplicity, I propose using Retirement Dated Mutual Funds to help a retiree properly allocate their overall retirement distribution needs during 30 or more years of retirement. Retirement Dated Mutual Funds have a built in mechanism that, over time, allows them to follow an "allocation glide path" from aggressive growth to conservative allocation at a specific date in the future. This eliminates the need for an individual investor to "manage" their retirment portfolio. Allocation decision are built into the overall protfolio by virtue of fund selection. in addition cost as low to resonable dpending on the fund selected.
I propose that these Retirement Dated Funds be thought of as Distribution Dated Funds. The date would coincide with the start date of a 5 year distribution period during retirement. As each five years period end another Distribution Dated Fund would be gliding into position to help fund distributions for the next five years of retirement.
If a retiree were able to determine what periodic distributions they would need (adjusted for inflation and in addition to their retirement income pension, SSI, annuities) and (over each five year period of time in retirement) they could then work backwards and determine initial funding levels using historical performance data as a guide.
So, for example, if one were to retire in 2015 at age 65 their retirement distribution portfolio might look something like this:
Retirement (Distribution) Dated Funds
2015 - Will provide distributions from age 65-70
2020 - Will provide distributions from age 70-75
2025 - Will provide distributions from age 75-80
2030 - Will provide distributions from age 80-85
2035 - Will provide distributions from age 85-90
2040 - Will provide distributions from age 90-95

Thanks guys. I haven't done the math yet, but it makes sense to me that even with commissions I'd be saving money and collecting more of the dividend stream over PRBLX, VDIGX or even VIG.
Just at a glance I really like the QCOM rec. Solid expansion of dividends and earnings for a decade witn low payout. Is there something specific about MAT you don't like?
Thanks much for the feedback.

Happy to help! :)
Qualcomm remains a fairly significant holding for me, with a long-term view. I believe the company can make inroads into new areas, such as retail (their beacons, which I think have a lot of potential for a wide variety of uses) and health. They recently raised the div quite a bit.
As for Mattel, I just don't really love the industry. I grew up as a kid in the '80's with Transformers and GI Joes and Starting Lineup and all those things. A kid today doesn't want an action figure, they want an IPad/Iphone and an XBOX One (or Sony PS4). Kids today probably don't know GI Joe, but are more than aware of "Halo" and Master Chief (which is owned by Microsoft/MSFT, which are coming out with more "Halo" games (see below) and a "Halo" series produced by Steven Spielberg.)
Board games? I don't know, it would seem those are on the way out, as well. Although, EA games is happy to sell you various Monopoly games on mobile, as well as other board games. Either the game is for sale, or it's difficult to get far in the game without buying additional in-game money online.
Microsoft also has money rolling in (it certainly does from me) for XBOX Live subscriptions. XBOX Live also has money coming in from users streaming media and buying downloadable content for games. Obviously, XBOX is not a large part of Microsoft as a whole, but when it comes to discussing what kids want these days, they want XBOX (and Playstation.) Additionally, Microsoft's handling of the "Halo" franchise (they created a studio to handle video games, novels and other products) is an example of how video game companies will likely to continue to have successes that will roll into other products (toys, books, movies, etc.)
When I was a kid, I loved going to the arcade. Then I went to an arcade where you could play against other people in the same room and that was amazing. Now I can play on XBOX Live against someone in another country. I think online gaming and mobile are just huge pulls away from the traditional toy industry as I knew it when I was a kid.
The video game industry was - I think - revolutionized by online gaming. The video game business is going to continue to do well with new avenues, especially micro transactions.
Game company Take Two has said that these transactions are "the gift that keeps on giving." "For Take-Two's quarter ended December 31, the company reported that net revenue from digitally delivered content grew 42 percent year-over-year to $132.8 million. This was led by GTA Online, Zelnick said at the time."
"GTA V has shipped 32.5 million copies and some 70 percent of all users have played Grand Theft Auto Online. Take-Two is keeping the all-important ARPU (average revenue per user) figure a secret, but from the enthusiastic way in which Zelnick talks about GTA Online, it wouldn't be surprising to learn that the online mode is performing quite well monetarily."
(http://www.gamespot.com/articles/gta-5-s-online-mode-is-the-gift-that-keeps-on-giving-take-two-says-about-its-monetary-opportunity/1100-6418882/) Whether gamers like it or not, I think there will be more of "you buy the game, but if you want xyz, that's another cost."
From MSFT's latest quarterly conference call: "Xbox Live members continued to embrace the service with transactional revenue growing 17%."
Hasbro and Mattel will probably keep doing fine - there's certainly licensing money for these companies - but you really have to hope that these companies continue to innovate and understand the changes in the way that they have to reach their target audience as times change and technology has really taken attention away from physical toys that dominated for so many years. Browsing through Hasbro's 2013 annual report, they at least seem to be saying the right things.
Long-term though, I guess I just don't think the toy industry is very compelling.
"Toys R Us" has not done well at all, although that's certainly due to a good degree from Amazon competition.
http://blogs.reuters.com/great-debate/2013/02/20/why-the-toy-industry-isnt-having-any-fun/
Halo 5:

hi all, in the last few issues of Barron's, I have noticed insider buying for PIMCO dynamic credit income (PCI) and PIMCO dynamic income fund (PDI). the discount to NAV has narrowed recently: PCI -5.7% (vs. 3 year avg of -7%); and PDI -1.4% (vs. 3 year avg of -5.1%). Not sure if Gross and co are banking on lower interest rates in the future or if the yield is tempting? Total distribution rate for PDI is 7.1% and PCI 8.1%. I have thought of buying but held off too long as discount has narrowed. Wondering what your thoughts are.

Since I happen to own both PRBLX and a number of individual stocks, since the 1970,s and 1990,s, why not own both? It has served me well and now I'm 80 and my wife and I have enjoyed our retirement with a portfolio that will take me to age 95+ but don't expect to make that age. good luck. I like my stocks but also that PRBLX portfolio and management, who is the best there is

"An American man who’s reached age 65 in good health has a 50% chance of living 20 more years to age 85, and a 25% chance of living to 92. For a 65-year-old woman, those odds rise to a 50% chance of living to age 88 and a one-in-four chance of living to 94."
Ouch!

In my opinion T. Rowe Price has a lot going for it.
When I compare TRP fund's to other funds in their category they seems to exhibit a better combination of higher alpha and lower beta in up and down markets making it easier for an individual investor to hold on through market gyrations.
Secondly, T. Rowe Price is an asset management company that is publicly traded ( as TROW) which makes it somewhat unique for a mutual fund company.
Here's an interesting long term chart of TROW and PRWCX:

Some investors might prefer to invest in the management companies that manage investments (mutual funds) of companies and TROW might be a consideration. I might suggest that when these asset managment companies under perform their Balanced funds (i.e. PRWCX compared to TROW) they are a great buying opportunity.
Right now TROW is trading at a 5.4% discount to PRWCX:

Here's an Article on the topic on Publicly Traded Assets Management Companies:
Buy The Fund Managers, Not Their Funds

To echo what Charles said, this is down to M*'s system which takes a snapshot of results at 10, 5, 3, and 1 years, weights those results, and compares them with the group the fund belongs to. VDIGX, VIG, PRBLX, et al suffer in stars because they deal in areas of the market that lags where the bull market, specifically last year's, was strongest.
It's sort of an apples to oranges comparison. Div growth funds are all still relatively predictable wealth compounders. But they're going to lag in strong upmarkets.
Edit: also keep in mind that VDIGX changed its mandate in 2003 from a utilities fund to a broader market fund. Similarly PRBLX changed from a balanced fund in 1998. Those changes aren't really reflected in ranking systems. I believe both are great owls, or as close to it as can be, taking that into account, fwiw.

Hello,
I am thinking of adding another member to my fixed income sleeve and raise the sleeve's fund count to seven. The fund is LIGRX and it will become fund number 52 within my well diversified portfolio which consist of twelve asset sleeves. This fund carries a M* rating of five stars and has earned a gold medal ranking. This fund has a wide asset base consisting of about cash (5%), stocks (4%) , bonds (83%) and other assets (8%) which are comprised of mostly convertible and some preferred securities. It currently has a duration of 4.6 years with an average credit quality of BBB. I have linked its M* report for those that would like to have a look.
http://quotes.morningstar.com/fund/f?t=LIGRX&region=USA
I am currently of the mind set I'll be cutting this sleeve back to six funds and adding to my equity holdings should equities experience a good pull back in the near term. The current members of this sleeve are ITAAX, LALDX, THIFX in the short term section and LBNDX, NEFZX and TSIAX in the multi sector income section. With the addition of LIGRX the duration of the sleeve as a whole will become about 3.8 years, up from 3.6 years.
I wish all ... "Good Investing."
Old_Skeet

FYI:
Regards,
Ted
http://www.forbes.com/sites/fidelity/2014/04/25/5-ways-to-protect-your-retirement-income/print/

Lots of good stuff in this thread. My take is that it very much depends on the company and your own relationship with it. How long have you been a client? How well do you understand their engrained culture (including hiring, promotion and oversight of managers)? How appropriate are their fund offerings to your potential needs? How broadly diversified among various holdings are their funds? How well do their expenses compare to other families? How have they performed in down markets? Any "red flags" in the news media? And how do they treat you when you call with an issue? If they've earned your confidence over 15, 20 or 25 years, than a sizable commitment is not only justified, but probably wise.

Hi Scout.
Strictly performance numbers...looks like dropped to 4 in December:

Still gets M*'s Gold Metal =).
Looks strong past three years. M* five year risk adjusted returns, which emphasize absolute returns, is a drag on composite rank.

Here's look at MFO risk/return profile on VDIGX:

Interesting here is difference between risk assessments given by the two systems, M* and MFO..."low" for the former, and "4, or aggressive" for the latter.
That's because M* compares only within category, while MFO compares risk against overall market. An important distinction, which I am sensitive to. I worry that novice investors see that "low" and don't realize such good funds, like VDIGX, can drawdown heavy, like the -41.5% it did in 2003.
But if that is your expectation and you've allocated accordingly, steady as she goes...one of best funds in class.

Hadn't VDIGX been a 5 star gold fund for a while? Am I imagining things? It's now a 4 star fund? Why?
Sorry if this has been covered before.

"Family risk" depends on the family.
Structurally, each fund in a family is independent with a custodian. So, neither the family ownership nor a fund manager can harm across the family directly. I consider a single fund risk to limit my investment in any one fund to say 10% of the portfolio or $100k whichever is less. The custodian could fail but typically the fund is watching this carefully.
The biggest "family risk" is sudden outflow of money from investors for reasons related to the family - loss of reputation, fraud, scandal, fear, etc. Families like Fidelity, Vanguard, TRP, etc are at much lower risk than small fund families or any that are dependent on an iconic figure. PIMCO, Strong funds in the past, etc. If I were to invest in funds like the latter, I use the same limits as a single fund limit for the entire family. I have no limits for the former type of families.

cman -- much obliged; great points.
I misappropriated a term, it seems.
I guess what I had in mind was more risk attributable to a firm's overall view of the market, or use of a common core research / analytic staff. Others have alluded to this above.
So, let's say that the portfolios of DODBX, DODWX, DODFX, DODGX, DODIX all have a common bias because they draw upon the same research staff (and have overlapping investment committees, etc.). Then, having 35% of one's portfolio spread across DODIX, DODFX, DODGX might subject 35% of the portfolio to the same degree of misread on the economy and individual companies, and so forth.

FYI;
Regards,
Ted
http://www.bloomberg.com/news/print/2014-04-25/short-investors-exit-health-care-etfs-amid-big-drug-deals.html

"Family risk" depends on the family.
Structurally, each fund in a family is independent with a custodian. So, neither the family ownership nor a fund manager can harm across the family directly...
The biggest "family risk" is sudden outflow of money from investors for reasons related to the family - loss of reputation, fraud, scandal, fear, etc. ...

@cman I'm not sure that each fund in a family should generally be considered separately. In the case of Oakmark funds, (from what I understand,) the family analysts vet a certain set of stocks as investable and then allows fund managers to choose from that list in order to determine which of those stocks they will invest in and to what degree. Here it seems that there is a strong possibility for family risk across or between funds. Similarly where there are managers heading a set of funds, say ARTIX, ARTJX, ARTHX, and ARTWX, with Yockey and crew, I would imagine a similar set of correlated risks.
Myself, I limit it to 25%. (but have a small denominator).

Considering selling PRBLX and just buying individual dividend stocks a la Josh Peters. DE, MAT, F, COH, CSX, CVX, AMNF, BBL, APAM, TROW, INTC, CA, CSCO, ESV, TUP, HCP on research list.
There is still time to talk me out of this foolishness, so fire away...

I can't speak to the qualities of PRBLX, but I certainly wouldn't try to talk you out of a sleeve of good divi payers. I started accumulating these types of equities, also known as "the things my dad would buy" about 5 years ago. They now comprise about 20% of my total portfolio. Frankly, I wish I would have started this 20 years ago. My plan is to reinvest the divi's until I turn on the Social Security spigot, and then let the divi's flow.
Current holdings include AEP, HCN, RPM, JNJ, NGG, PAYX, O, KMI and WCP.

My largest fund family percentage is about 20% of my portfolio and it is with American Funds. There are a good number that follow in about the 10% range. Some of these are Lord Abbett, Franklin, Thornburg and Loomis Sayles. Then, I also have a good number that follow in the 5% range. And, a good number that follow with single holdings only.
I'd say I would not want any more than 25% with any one family.
Old_Skeet

I think the ~ 30% I had in Pimco bond funds for a few years was the most ever. Most now is 15%; there's the 20% in a 401k, but that's all indexes.

If standard deviation is normal (standard) then it makes sense that stocks would have a normal vibration. The market isn't the only thing that effects these vibrations. The currency that the stock are exchanged for also play a part. Stocks that were once traded in gold and silver back dollars are now traded with fiat currencies backed by the faith of central bank credit.
I believe credit and currency valuation has played a bigger and bigger role in these vibrations and apparent upward valuation. Ray Dalio does a nice job of explaining the short term and the long term debt cycle and how stocks are a transactional component of these exchanges.
economicprinciples.org/
Finally, I think a monetary policy that operate outside of constraints can manipulate currency value and over time make stocks appear higher in value, but when these same stocks are priced in a currency that has constraints (gold or silver in the past) stock's (the dow) true value is revealed.

Both TMSFX and HHCCX were going nowhere from January 2011 to mid 2013, so the beautiful figure above does not fully represent them. TMSFX had a manager change a month ago.

The point of the chart is to follow a fund (PRHSX) against an indicator (in this case TMSFX). Short charts can be very telling. They can tell me when to stay fully invested, when to employ hedging, when to scale out, when to take profits, and when to scale in.
This short YTD chart shows how I recently went from being fully invested mode (green comment box and arrows) to when I began scaling back (in this case it could also be called take profits) (top red comment box). The most recent action (lower red comment box) make me believe there is still some downward movement ahead for Health Care. An investor doesn't have to own TSMFX to utilize it as a helpful indicator.
A very short YTD chart with my my three investment decisions (comments):