Quotes from Article:
index-investor-corner

We live in a world where there are no accurate crystal balls. Thus, the prudent investment strategy is to build a globally diversified portfolio. But that’s simply (not) the necessary condition for success. The sufficient condition is to possess the discipline to stay the course, ignoring not only clarion cries from those who think their crystal balls are reliable, but also cries from your own stomach to GET ME OUT! As Warren Buffett explained, “The most important quality for an investor is temperament, not intellect.”

VT (Vanguard Total World Index Fund) seems to fit the bill for Large Cap exposure.
-2% yield, 7,895 holdings. 51% US / 46% non-US
Any thoughts on global small cap exposure?
I hold MWEFX and small cap is SCHC.

Thanks @Crash, risk characteristic look great, but M* mentions:

Tweedy, Browne Global Value's 2017 struggles are largely cyclical, but concerns about the fund's growing expense gap and the team's future composition are long-term issues.

Yup. True. +1.

@Skeet, LPEFX has 32 holdings. Have you ever thought of creating your own portfolio of these holdings?
2.21% ER seems steep. Also, are you investing in LPEFX in a taxable account? Dividends are more tax efficient in a taxable account where tax loss harvesting could be employed along with the income tax benefits of dividends.

Skeet, as I have noted many times on this board almost all of my investment portfolio is geared toward income be it interest or dividend payments but primarily the latter. I find it interesting that you used the last six years in your investment claims since two of those years had returns of roughly 41% and 27% while the other 4 did basically squat. Furthermore, you use this years projected S&P yield of 1.7% to show disparity rather than it's historic 2.0% average for the last 6 years. Tell me, has LPEFX always had an 8.9% yield? I couldn't find anything in all of the records I was able to locate. I'm glad the fund has worked for you but I think uncle Warren is right for most folks.
By the way, I see that the 10-yr average return of this fund is right around 3.0% so you might want to be keeping a close eye out for the exit doors.

SPY and LPEFX about a draw even for past six years for "total return".
http://stockcharts.com/freecharts/perf.php?LPEFX,SPY&n=1509&O=011000

Thanks @Crash, risk characteristic look great, but M* mentions:

Tweedy, Browne Global Value's 2017 struggles are largely cyclical, but concerns about the fund's growing expense gap and the team's future composition are long-term issues.

Hi @Mark,
Apparently you are not a yield seeker?
One of the things that attracted me to LPEFX is its ability to generate income along with some capital appreciation. With this, it is part of my well diverisfied income generating portfolio. Through the past six years that I have owned LPEFX my average annual return has been better than 15%. So with a current yield of about 9% it, for me, has been better than most income funds. Now what is the yield on the S&P 500 Index? I finding it currently to be back of 2%. Hey, that is a pretty big dividend to yield spread of 1.7% vs. 8.9%. Compared to S&P 500 Index through my years of ownership I probally gave up some total return capacity but gained much more income over what I otherwise would have over holding the 500 Index. Don't get me wrong ... from time-to-time ... I've owned the Index too.
Form my perspective it has been worth it because of its ability to generate income. For others, like yourself, it might not have been.

I didn't address your comment about the problems in valuing illiquid securities because I felt that while that was related, it did not directly address the matter of degrees of liquidity, and disclosure thereof.
Also, I didn't want to go down that path, otherwise I'd have started writing about why I will never invest in Heartland funds. Mispricing, including fraudulent mispricing has been going on for decades, see, e.g.
https://www.plansponsor.com/sec-charges-firm-mispriced-two-junk-bond-funds/
Likewise, while the SEC may be (almost surely is) interested in full liquidation costs and risks, that isn't the focus of the rule or what is being opened for reconsideration.
Would investors in TFCIX really have cared whether some of the securities might have taken seven days instead of three days to convert to cash (i.e. which of the three buckets for liquid holdings the securities fell into)? Or rather would they have cared how much of the fund was hard to sell at a reasonable price (illiquid)? Because that info was already disclosed (one can argue that it should have been more accessible, though).

The fund disclosed, for example, that its so-called Level 3 assets, or securities that are hard to value and trade, were 20% of assets at the end of July [2015]. That was higher than at any other US junk bond fund with at least $500 million in assets, according to a Reuters analysis of fund disclosures. And the fund had 76% of its portfolio exposed to very low-rated "CCC+" rated securities and below, compared with a median level of 22% among similar junk funds, according to analysts at Citigroup

http://www.businessinsider.com/r-hidden-in-plain-sight-big-risks-at-failed-third-avenue-fund-were-clear-to-some-2015-12
Contrast that with Schwab's Yield Plus fund.

It may be debatable whether Schwab lied to investors about the fund [Schwab had marketed the fund as a MMF alternative]. But it is clear that it misled them about a crucial aspect of the fund’s investments. ...
The S.E.C. states that in mid-2007, only 6 percent of the fund’s assets matured within six months. ... That maturity risk would have been obvious to anyone who understands bonds. ... But ... the 2007 annual report ... said that on Aug. 31 of that year, more than 60 percent of the fund’s assets had maturities of six months or less. [And the report's glossary defined maturity] to mean just what it really means: “The date a debt security is scheduled to be ‘retired’ and its principal returned to the bondholder.”
[However, at the top of the list of fund assets, it said that for adjustable rate securities, maturity meant] “the next interest rate change date.”

http://www.nytimes.com/2011/01/14/business/14norris.html
For whatever reasons, most investors don't make use of information already available. It's partly due to accessibility, and partly because people simply choose to ignore what they do have access to. (Keep in mind that the SEC created stripped down summary prospectuses because people weren't reading the information that was already placed in their hands, literally.)
Making information about illiquid holdings easier to find would be great. Slicing and dicing degrees of liquidity (0-3 days, 3-7 days, 7 days but later settlement) not so much. Especially if that fine granularity is created using such subjective (and undisclosed) factors as to render it meaningless.

Quotes from Article:
index-investor-corner

We live in a world where there are no accurate crystal balls. Thus, the prudent investment strategy is to build a globally diversified portfolio. But that’s simply (not) the necessary condition for success. The sufficient condition is to possess the discipline to stay the course, ignoring not only clarion cries from those who think their crystal balls are reliable, but also cries from your own stomach to GET ME OUT! As Warren Buffett explained, “The most important quality for an investor is temperament, not intellect.”

VT (Vanguard Total World Index Fund) seems to fit the bill for Large Cap exposure.
-2% yield, 7,895 holdings. 51% US / 46% non-US
Any thoughts on global small cap exposure?

Given the returns over the last 10 years by the S&P 500 index and the World Small/Mid Stock index why would you even bother. But hey, it's not my money.

@MikeM

I think it is safe to say there are 100's of different schemes or formulas within this alternative category. Which formula or fund will out-perform a balanced fund over the entire economic cycle and which one's will have their shining moments only when the economic stars align? Again a gamble.

I tracked AQR funds for several years and I don't see consistent patterns of out-performance especially during down cycles. Consider the high ER of these funds, a low cost balanced fund such as VTMFX is a better approach.

Once one opens the floodgates to allowing two funds to treat the same securities differently, it seems that metrics fly out the window, and fudging (analogous to window dressing) becomes the norm.

My point is that is already happening with regard to the valuation of illiquid securities that trade by appointment, yet I still think it is a valuable exercise:
https://wsj.com/articles/mutual-funds-mark-down-uber-investments-by-up-to-15-1503443267
Regarding the SEC's interest, I do think they are concerned or were concerned before the recent shift in the agency's makeup about the selling of an entire position, not just the usual trading around the edges funds do on a day to day basis. Yes, funds will differ on how they estimate this liquidity, but having a window into their process for evaluating liquidity is useful info investors have a right to know in my opinion even when there are differences in interpretation. I think investors in Third Avenue Focused Credit would've benefited from knowing how illiquid that portfolio was from the beginning. I also understand that liquidity shifts over time. A large cap stock that becomes distressed and now a microcap will not be as liquid as it once was, but that change of liquidity should be evaluated, recorded and disclosed too on a periodic basis.
I also would add just because the SEC changed the final rule to accommodate larger funds--after I'm sure heavy pressure and lobbying from the fund industry--doesn't mean the final rule is in the best interests of fund shareholders as opposed to fund companies. The fact is, smaller funds have a liquidity advantage over larger ones and that advantage should be disclosed to shareholders. In fact, I would say the reason Mutual Fund Observer exists is in part because of that small undiscovered fund advantage.

Different funds have different amounts of the same security. A tiny fund investing in a microcap stock could have ample liquidity to trade it while a behemoth fund owning more than 5% of its outstanding shares won't be able to get out of the position without having significant market impact costs and liquidity problems.

If 'twere only like that.
Liquidity of a stock is progressive, much as income taxes are progressive. Rich man, poor man, the first $10K of income gets taxed at the same rate. The next $10K gets taxed at a higher rate, but the for both earners, and so on. Same for selling stocks. Big fund, little fund, the first 10K shares put on the auction block have the same liquidity, the next 10K shares are less liquid but the same for all sellers, and so on.
Simply averaging the liquidity of all shares held by a fund doesn't reflect reality. First of all, funds never need to sell all shares, unless they are shutting down. In that case, they can petition the SEC, as TFCIX did, to halt redemptions and liquidate their securities without holding a fire sale.
Secondly, even the Obama SEC recognized that: "evaluating “days-to-cash” was inherently biased against large funds" (p. 346 of Final Rule). So the SEC rule already allowed funds to consider liquidity impact "in sizes that the fund reasonably anticipates trading". Not full liquidation, and not under stress conditions.
Funds are loathe to disclose what they own, let alone what they are trading, not to mention what they anticipate trading. They don't plan on trading positions pro rata (same percentage of each holding to raise cash). They're not going to disclose their trading strategies to the SEC, not to mention the public at large (unless required by regulation - so far I haven't found anything compelling this level of disclosure, but I haven't read the rule in depth yet).
Yet by not disclosing this information, it would be easy for funds to claim higher liquidity than actually the case. They could pretend to have (hypothesize) a plan to sell more of their highly liquid assets and sell less of their illiquid securities. Unverifiable.
Then there's the matter of market conditions. You wrote about stress test data that funds have. But what the SEC wants is liquidity classification of securities under current market conditions. That's something different (and also gets us back to how lines of credit should be evaluated).
Once one opens the floodgates to allowing two funds to treat the same securities differently, it seems that metrics fly out the window, and fudging (analogous to window dressing) becomes the norm. Contrast that with the relatively simple partitioning of securities into liquid or illiquid in order to satisfy the existing 15% cap on buying illiquid securities.
Getting one's head wrapped around two funds being able to say that the same security has different degrees of liquidity means understanding not only how they could possibly put the security into two different buckets, but the consequences of that. Are the results meaningful? If fund X classifies security 1 as moderately liquid, and fund Y classifies security 2 as moderately liquid, are these securities really similar, when we don't know quite how the funds evaluate "current market conditions", or how flexible they are in altering their trading plans?

...a balanced fund wouldn't have the options available to it that an alt fund would and that could change the relative performance.

Where is the evidence for that, other than what is said in the marketing brochure for these funds? And personally I don't want to invest in the word "could change" because the other side of the coin toss is "won't change" or worst "will not be as good as". But that's just me. I wouldn't invest the 10-20% needed to make an impact on the total portfolio anyway.
I think it is safe to say there are 100's of different schemes or formulas within this alternative category. Which formula or fund will out-perform a balanced fund over the entire economic cycle and which one's will have their shining moments only when the economic stars align? Again a gamble.
Not saying there aren't some alt-funds out there that might do the trick. Some of the AQR funds do look appealing at least at this moment. Just saying that picking the winner will be a gamble and that the overwhelming majority will not deliver better returns than a balanced fund.

@Old_ Skeet & MFO Members:: I get my private equity exposure from APO. BX, and KKR.
Regards,
Ted
Yields:
APO=6.01%
BX=7.88%
KKR=3.10%

FYI: America is in the grips of a speculative frenzy. Investment bankers, private investment firms, and even a few dozen recently graduated MBAs labelling themselves “searchers” are calling, emailing, wining, and dining small business owners. Their goal is to translate prosaic small businesses into the poetry of private equity.
The great postcrisis private equity gold rush is on, fueled by cheap debt and enthusiastic investors. A lawn care chain might get half a dozen calls and emails a week from business brokers and “searchers.” A regional bank auctioning off a business with $15 million in profits might pitch two hundred prospects, receive fifty letters of intent, and take twelve separate private equity firms to management meetings, ending in a sale price which the majority of bidders considers crazy. And the greatest prize of all—a software company—could sell for many multiples of revenue, regardless of profitability.
Regards,
Ted
https://americanaffairsjournal.org/2018/02/private-equity-overvalued-overrated/

...after all that why not just own VTMFX:

Precisely bee!!! VTMFX or any other well managed balanced fund will out perform 95% of these magical alternative funds over a cycle.

Maybe @PBKCM would give us some insight on what might change the graph in their favor? The last 10 years have been a lot of good equity returns and most of the time has seen lower interest rates as well, but it wouldn't be a big surprise if there are situations where a balanced fund wouldn't have the options available to it that an alt fund would and that could change the relative performance. I'd just wonder what those situations are and how likely they are? After all, many balanced funds can and have moved to shorter durations to reduce interest rate risk and I'd presume most of them could even hold cash if they wanted.

FYI: A rare interview with small-cap pioneer Chuck Royce on the evolving international and income opportunities in small company stocks.
Regards,
Ted
https://wealthtrack.com/rich-universe-legendary-investor-chuck-royce-is-finding-numerous-opportunities-overseas-in-small-cap-stocks/
Royce Funds Website:
https://www.roycefunds.com//
M* Royce Family Of Funds:
http://quicktake.morningstar.com/fundfamily/royce/10633/fund-list.aspx

QSPRX and QRPIX available through USAA Marketplace. $100k minimum for QSPRX and $5M for QRPIX. Too rich for my wallet.
Screening for Multi-alternatives, I came up with these other choices:
Screened for category:
-low minimum
-high Alpha
-low beta
-High Sharpe ratio
-High 3 & 5 yr return

KCMTX seems a bit different than the other three listed here:

...after all that, why not just own VTMFX:

End of Day for S&P 500 sectors: