FYI: Of course he's a fan, he sell haystack funds.
Regards,
Ted
http://blogs.marketwatch.com/thetell/2014/05/22/charles-schwab-himself-is-a-big-fan-of-index-funds/tab/print/

Just a note.
http://online.wsj.com/article/BT-CO-20140522-710429.html#printMode
http://www.businessweek.com/printer/articles/736694?type=bloomberg
TIP LTPZ STPZ

>>>So you do this with mutual funds, which have min holding periods?<<<
Most certainly (it's just a $17 charge to exit before the three months) but rarely/never with a fund that has short term redemption fees.
>>>> PS. Doing 4.5 mile hill run just about every other day. On "off" days, long walks in local canons and beaches.<<<<
That's great Charles! Lucky guy having access to the beaches. In my case I am running less but hiking more than ever and out there about every day.

FYI:
Regards,
Ted
http://www.marketwatch.com/story/4-things-doom-and-gloomers-got-totally-wrong-2014-05-22/print?guid=E0A22414-E123-11E3-AEFD-00212803FAD6

Thanks for sharing Junkster.
I do struggle with setting right exit level: 3%? 6%? 9%? 6 mo MAXDD? On single equity holding. Depends on category volatility certainly, as Scott instructs. Where it is against 10-mo SMA. How much money it has made or lost me. Whether rationale for holding has changed.
It does seem that unless you have (or believe you have) a true edge, hard to justify hanging on watching a stock holding drop...regardless of investment horizon.
As for funds, however, I know you suggest the exit levels should be tighter. Here though I'm inclined to go with the PM. If I believe (ha!), I hang in regardless. If I don't, I exit. But I try to allocate such "buy and hold" plays accordingly in my portfolio.
Just me.
Hope all is well.
PS. Doing 4.5 mile hill run just about every other day. On "off" days, long walks in local canons and beaches.

Well. 5y sure is superior, 10y nothing to rave about if you compare with other v v good funds (FLPSX, PRBLX, YACKX). Note that 5y is sooo superior because their 09 dip is so horrific and the bounceback so long, 4y, unlike the others mentioned. In other words, one wonders what the so-called investor returns are. Who would not have bailed sometime 08-10?

There are about 5000 stocks currently listed in US stock markets (though this keeps varying). Fund managers don't need to own only the stocks outside the index.
For the "mathematical guarantee" of the zero sum game assumption to hold, you cannot have the fund managers owning ANY stock outside the index because the argument that the gains in any stocks held by the active manager is captured by the index itself and at the expense of another active manager doesn't hold.
If a manager strikes rich with an IPO allocation or a distressed company coming out of bankruptcy, then it is not necessarily at the expense of any other manager because new value is being created. In fact, in the latter case, in theory, the gains could have come out of the losses in the index funds before that company was thrown out after locking in the losses!
If a company held by an active manager is included in the index resulting in a pop in its price from the announcement, then the active manager realizes those gains not necessarily at the expense of any other manager nor is that gain captured by the index.
Finally, by definition, the active managers must be fully invested with no cash for the zero sum assumption to hold. Otherwise, if the active managers, in theory, market time perfectly, and go to cash before a crash with the loss in value from such sales captured by everybody including the index funds, then the active managers can ALL beat the indices by staying out of the marker for the crash. The mathematical guarantee of zero sum game doesn't hold in this case.
The point is that the theoretical framework in which this mathematical guarantee is provided doesn't model the real world but some theoretical unrealistic world with a lot of constraints on the managers and the definition of the market.
Note that all of these arguments have nothing to do with whether managers can achieve this in reality or whether they under or over perform as measured empirically in some period. They claim to "prove" the average active dollar underperformance mathematically. Only IF the assumptions above model reality. Without it, they make no assertions one way or the other.

Thanks @charles
Your comments highlight the problem with meaningfully interpreting results of a search like this.
Shouldn't there be a primer somewhere on the site that explains how to use the data for fund selection or portfolio allocation? Otherwise, people may make inappropriate conclusions based on numbers and colors.
Information like what is the "margin of error" in these rankings (for example based on the day to day or month to month variability in returns that may rearrange the order any day you look at it)? Is risk group 4 or 5 to be avoided or a risk group 1 to be picked over any? If so why? Etc.
Perhaps there is such a document there already and I have missed it.
The only relevant data in those tables for the point of this thread is the potential drawdown in this category to make them unsuitable for a conservative portfolio and hence the short term high yield as an alternative category to look at for diversification.

Amazing 15, 10, 5, 3 year performance record.
The 5 year return has to be some sort of record for the record books.......
Who are these people?
Will need to look into this a bit

"So there is a large umiverse of stocks that are not in the index."
++++++++++++
I'd like to understand this better.
The Vanguard Total Stock Market Index Fund has 3,684 stocks in it.
By my estimation, it should contain the full universe of U.S. Mega caps, large caps, mid caps and small caps, and only be lacking some of the micro cap stocks in the market. It currently has 2.55% of it's stocks as microcap stocks, so I'm sure there are quite a few microcap stocks that it doesn't cover due to liquidity reasons and size constraints. But not a lot of mutual fund managers are purchasing stocks in the microcap universe.
If you are correct, that the active managers are buying stocks that are not in the total market's 3,684 stock universe, then certainly it is true that the math stated by William Sharpe and Bogle does not apply. But I'm not convinced that a significant amount of microcap stock is being purchased to invalidate their arguments.

@mrdarcey will provide his own rationale.
The problem I have with these "zero sum game" arguments is that they assume the index literally contains every stock in the category which is not true of any index or in the case of Sharpe, the market is defined by him as only those stocks that are in the index and the active manager in his framework is constrained to only buy from those stocks.
The reality is different as you can imagine. S&P 500 is only 500 stocks and the total stock market is only about 3000 and because of the selection criterion the latter overweights large caps in its composition. So there is a large umiverse of stocks that are not in the index. If the active manager buys stocks in his category (no style creep) that he believes are undervalued but not in the index at the time, the zero sum arithmetic argument assumptions don't apply. Sharpe has no results applicable to this case.
Note that these arguments including Sharpe state that their conclusions follow only from arithmetic (of zero sum game) and not from empirical results of performance studies. But for that to be true, the active manager HAS to buy only those stocks that are in the index. A theoretical argument, not of much value in practice.
Of course, indexologists explain away any over performance when an active manager overperforms with the equally fallacious argument that he picked stocks that were riskier (even if they are classified in the same category) than the index and therefore the index was not the right index for that fund!
In other words, the average active managed dollar (not any particular manager) cannot win by definition in these theoretical framrworks. :-)

Matthew 25 - Do unto others as you may them to do unto you. Something like that.
I have owned this fund off and on for the longest time. I have been lucky to buy it and sell it always with a profit and have used it repeatedly to offset losses on the books. I currently own a small position in the fund, the shortest I have ever held. I plan to add to this in market corrections.

Early bird catches the worm. ;)
http://www.mutualfundobserver.com/discuss/discussion/13596/josh-brown-on-seasonality-sell-in-may-and-go-away#latest

Hi cman.
I took a closer look at funds in the High Yield Muni category since HYD inception.
There are 31 funds that have been around 61 months or more through this March. HYD is the only EtF in the bunch. The few other EtFs in this category are younger.
Many of the funds are loaded and/or impose early redemption fees.
Honestly, most have done pretty well and rather small values (versus say equities) can move the risk adjusted return rankings.
Here is summary sorted by annualized return...all metrics, including risk and return rankings based on performance since Mar '09.

Here's same list sorted by Martin:

Hi Guys,
I too believe that the referenced article undervalues the likelihood of a market meltdown. How quickly we forget 2008.
I particularly disliked the article’s assertion that Bear markets are “relatively rare” events; it is especially at odds with the historical data. The referenced work is utterly devoid of supportive statistics. It reflects a probability blindness. Where is their data to backstop this flamboyant claim?
We need probabilities. In golf, what is the likelihood of making a hole-in-one? What is the probability of marrying a millionaire? What are the odds that shape a market meltdown?
The answers to the first two questions can be found in Gregory Baer’s book “Life: The Odds”. It is an excellent fun and informative summertime read that often illustrates that we folks are terrible at guesstimating life’s odds. That’s especially so when estimating the odds and the payoffs of low probability events.
For a PGA professional, the hole-in-one odds are roughly 2,500 to 1. For those of us in the amateur ranks, the odds vary greatly from 10,000 to 1 to about 15,000 to 1, depending on hole distance. The professionals have improved their odds over time.
The marry a millionaire odds are approximately 215 to 1. Baer provides guidelines on how to improve those odds. With that tease as a motivating factor, you’ll have to read the book to get more information.
To rectify the market meltdown statistical deficiency, I defaulted to Sam Stovall’s recent Las Vegas MoneyShow presentation. In that presentation, he included relevant market overall crash stats.
Of special interest is the historical frequency at two levels of market disruptions: a 10% to 20% Correction and a Bear market loss greater than 20%. Stovall’s S&P 500 data from 1945 recorded 19 and 12 downturns for these categories, respectively. Since the data set incorporated 68 annual returns, the likelihood of a Correction is 28 %, and the probability of a Bear market is slightly over 17 %. This is not rocket science, but I don’t rate these probabilities in the “relatively rare” happenings group. These are scary numbers and demand attention.
The average negative downward thrust for the Correction and for the Bear markets were about -14% and -28%, also respectively. That’s not peanuts and must be worrisome for most investors.
For the Correction markets, the crash duration was 5 months followed by a 4 month recovery period. Overall, the complete cycle was 9 months. That’s bad enough, but likely manageable from an emotional perspective.
For the full Bear market category, the S&P 500 tailspin duration was 14 months with an elongated 25 month recovery phase. That’s a stomach churning and patience testing total of 39 months; wow, over three years of anxious agonizing. That’s a draining experience both from an emotional and from a portfolio wealth depleting perspective.
Indeed No! Bear markets are surely not “relatively rare” happenings. Defensive portfolio diversification, and some careful watching of those market and economic signals that potentially foretell a Bear market must be continually monitored. InvesTech’s Jim Stack and others do a good, but imperfect, job at providing candidate signals. Investing is never without risk.
The developing behavioral finance science has made measured progress at establishing and explaining our mental deficiencies in properly assessing stressful life and investing scenarios.
For example, the 911 disaster killed about 3,000 folks. Because of the manner in which the terrorism was executed, people abandoned air travel in favor of auto travel, even though air travel is statistically far safer than car trips. During the following one year when this fear persisted, it is estimated that the extra auto travel killed an additional 1,500 folks. We do not make rationale decisions for uncertain, low probability events. Typically, we overrate the frequency of occurrence and also the final impact of the event.
The referenced article summarized the development of what Daniel Kahneman called our fast-acting System 1 brain component (the Gut instinct), which was necessary for survival eons ago, but not so efficient for today’s market investment decision making. In contrast, the slow-acting reflective System 2 brain component (the Head instinct) should be more fully exploited in our decision making process. When investing in mutual funds, speed is not an essential element.
Best Regards.

Ted: Just to clarify that Matthew 25 has nothing to do with the fine Matthews fund family. The name of the fund is a bible verse.

FYI:
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/5/21/some-high-multiple-stocks-on-the-rebound.html?printerFriendly=true

I am passing on an experience I recently had with this fund. The fund is 5 stars at Morningstar with only 28 stock holdings and 7% turnover with an expense ratio of 1.06%. It will sometimes hold high percentage positions in its portfolio as it currently has a 13% position with Apple. I attempted to purchase this fund online through T. Rowe Price Brokerage a few days ago. At one point in the process a message popped onscreen to inform me that the fund was not available to be sold in my state and I was unable to complete the transaction. I called the mutual fund to verify that it was available in my state and then called T Rowe Price to try to get the transaction completed, which ultimately I was able to do. But the reason for me writing this message is the fact that later that afternoon I got a call from Matthew 25 re-confirming the fund's availability and the call came from Mark Mulholland, the portfolio manager. I wasn't even a shareholder yet, but it was the portfolio manager who called me back to handle a customer service issue that I had raised. I was impressed with this level of followup by Matthew 25 and thought it deserved a mention on this forum when we are all so used to robo-calls and an inability to actually reach a human when calling with a complaint or question.

FYI:
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2014/05/21/fund-doh-only-8-of-large-growth-managers-are-beating-the-index/tab/print/
In case you didn't know the meaning of D'oh: Homer Simpson: