I was invested through 1994 when Fed (Alan Greenspan) raised rates 6 times. Bond lost 3% that year, BUT all asset classes rocketed from 1995 to 2000 when tech bubble.
Remember that we have a very different Fed Chairman today, Janet Yellen. My opinion is that I don't anticipate 6 rate hikes this year. Thus I will continue to keep moderate % to bond - intermediate and high quality. Also stable value fund is a better choice than money market if you have access to it.

This is the best thing that's happened to retirement accounts and its owners. Imagine people everywhere day trading ETFs. Their already disastrous investment results would become worse.
Any libertarians out here who want the "freedom" to do this in their 401ks?

FYI: ETFs comprised 0.02% of 401(k) assets.
Regards,
Ted
http://www.marketwatch.com/story/retirement-accounts-a-holy-grail-that-remain-out-of-reach-for-etfs-2017-02-06/print

Thank you all. I'm looking at Balanced and Global Balanced at this time. They seem to have deliver the smoothest ride. F1 shares are still cheaper than other like funds. Options at TIAA are limited in NTF space.

It's apocryphally repeated among English majors that when, in the late 1950s, some professors (Yale, I believe) drove up to the Hartford accident and indemnity insurance company where the great poet Wallace Stevens had worked for 40y until his recent death, to collect papers and other pertinent whatnot from his VP office, his longtime secretary responded to their introduction with "Wally? Poetry?"

Hi @BobC
From Mr. Gross.......the expansion of central bank balance sheets from perhaps $2 trillion in 2003 to a now gargantuan $12 trillion at the end of 2016 is remarkable. Not only did central banks buy $10 trillion of bonds, but they lowered policy rates to near 0%
and in some cases, negative yields.
>>>Apparently the notations from Mr. Gross regarding central bank balance sheets and related central bank thoughts from Mr. Gross, have no barring upon anything we investors should concern ourselves.
The phrase of the day going forward thus becomes: "Please move along folks, there is nothing to see here."
Regards,
Catch

@Old Skeet said, "use to own WASAX (Ivy Asset Strategy) years back when it was nimble enough to reposition from time-to-time towards the faster moving market currents"
@briboe69 WASAX had $35 billion in assets a few years ago, and now is down to $5 billion - wow! There is nothing a manager can do when the outflows are that large.
@kevindow had a good thumb nail on WASAX's former manager's new fund in this post from last week
@TSP_Transfer,
Thanks for the tip on CCAPX, which is an interesting global allocation fund, but really not in the ALT space. The CCAPX manager, Ryan Caldwell, served as the assistant manager of WASAX when it was on top of the world (1/2007 - 6/2014), and during his tenure, this fund beat the heavy hitters like MALOX and SGIIX, and even the wannabes, like WGRNX.
Test trading for CCAPX indicates that it is not available at Scottrade and Wellstrade, but it is available in TDAmeritrade and Fidelity retirement accounts with no minimum + TF. At an actual 1.15% expense ratio, this fund has very reasonable expenses.
Kevin
https://www.chironfunds.com
https://www.chironfunds.com/Data/Sites/3/media/docs/Chiron_FactSheet.pdfhttps
https://www.chironfunds.com/Data/Sites/3/media/docs/Chiron_Portfolio_Composition.pdf
http://www.mutualfundobserver.com/discuss/discussion/comment/84694/#Comment_84694

What's an investor to do ?

@Derf - 80% of the time: nothing
10% of the time: buy low and sell high
10% of the time: sell high and buy low
Just my humble opinion. Good luck!

Hi Guys,
I want to especially thank Hank and Lewis Braham for their thoughtful and thought provoking posts. I fully understand and appreciate the time commitment and deep thinking required to produce such excellent submittals. Their perspectives might not totally agree with all MFOers, but the diversity of opinion is what makes MFO so useful.
Data is the bedrock for investment decisions. Braham especially emphasized the market conditions when active fund management might add Alpha to a portfolio. SPIVA reviews the relative performance differences between actively managed funds and Index outcomes. Here is the SPIVA Link to their 2016 end of year report:
https://us.spindices.com/documents/spiva/persistence-scorecard-december-2016.pdf?force_download=true
It's a tough uphill road for active management and persistence is particularly challenging.
MFOer msf and I have been discussing John Neff's fund management performance in a running exchange on this thread.
It appears that he and I would choose to assess a fund manager's lifetime performance differently. That's not surprising since an assessment set of criteria was never established. Some measurement standard needs to be defined.
Based on his submittal, he would elect to evaluate a manager's lifetime achievements over several selected timeframes. I would choose the manager's overall record.
If you were a potential investor in 1985, it would have been difficult to ignore Neff's VWNDX performance of 20 years up to that point. It was superb. His relative record did slip a little thereafter but it was far from a disaster. Most importantly, projecting future returns is impossible. It's not a bad idea to cut a little slack for a proven winner if he subsequently stumbles. Slumps happen.
That policy paid dividends for me during Sumday's Super Bowl game. Tom Brady is a proven winner. I believed he and the Patriots would be winners before the starting kickoff. Brady had a miserable first half. The odds against a Pats victory lengthened and I took them. As you all know, Brady and the team rallied in the second half. Great for him and good for me. Recovery happened.
Do you assess his performance on the distinctive two halfs or for the entire game? The completed game is what matters. The final score and not the quarter-by-quarter scoring matters completely. Taken over multiple games, it's the total cumulative record that counts in winning a league championship and not a single game. The same is true in the investment world.
Best Wishes.

All ratings have been updated on MFO Premium site, including MultiSearch, Great Owls, Fund Alarm (Three Alarm and Honor Roll), Averages, Correlation, Dashboard of Profiled Funds, and Fund Family Scorecard.

What's simple about the three index portfolio is the costs--both management fees and trading costs. There is no question this is an advantage over higher cost actively managed funds. But in other respects three total market index funds are not so simple as they appear. Consider how complicated a portfolio of thousands of stocks or bonds is and understanding the various micro and macroeconomic factors driving those securities. Perhaps it is not so simple as an old-fashioned actively managed fund with fifty stocks picked based on valuation/business prospects--micro--and economic trends--macro--the rationale for owning those specific securities the manager explains--or should explain if he/she is decent--in shareholder letters.
Just saying with an index fund "I get the market's return" is fine and "simple" so long as markets are rising. During that period, you don't have to care what the factors are driving that performance. But meanwhile the portfolio in your index fund is shifting dramatically. The Russell 3000 index of January 2000 during the dotcom bubble was vastly different in its sector composition and stock weights from the Russell 3000 of January 2003 after the stock bust. And until the crash occurred you didn't have to care. But there's nothing really simple about the underlying dynamics of index funds.
This leads me to my second point on a more practical level. There are certain environments where total market index funds will invariably shine versus actively managed ones and understanding those environments can help with your investment strategy:
1. When large cap stocks are beating small, total market stock indexes will beat active managers as these index funds are market cap weighted so the largest companies drive their performance. Active managers tend to buy smaller companies.
2. When stock markets are rising it's harder for active managers to win as they generally hold some cash and their fees act as a drag on top of that. The longer the stock market rises the worse the comparison between active and passive will be. So now we're in February of 2017--eight years into a bull market that began in March of 2009. Of course, total market index funds will look really strong right now.
3. The narrower the breadth of the stocks rising in a rising stock market the worse the comparison between active and passive will be. This is typically what happens as bubbles reach their peak. Just a handful of bellwether stocks--in 1999 it was Cisco, Worldcom, Intel, etc.--drive the market higher. Active managers--especially valuation conscious active managers--that don't hold those stocks lag. This is when you should be looking at stats like the advance/decline ratio.
4. Stock dispersion and correlation also can affect active managers. If stocks are all moving in the same direction and have similar daily variation in returns--so not only if the stock market is up 1%, do all stocks go up but all stocks go up about 1%, it is harder for active managers to differentiate themselves. So if we're in a low dispersion/high correlation market--all stocks rising and falling together about the same amount--it is virtually impossible for active managers to beat index funds after deducting their fees.
So as you can see, this is a tough game, not simple at all, from both an active or passive side. But simply buying and forgetting about a three index fund portfolio in 2017, after an eight year stock market rally, with valuations stretched and with interest rates near historic lows and set to rise--not to mention a heightened level of geopolitical risk-- seems a fool's errand. What's going on underneath the hood of those index funds is immensely complex.

From review of the chart ...
Interesting ... Seems a lot of Edward Jones advisors must be pushing their firms Bridge Builder Small/Mid Cap Value Fund through selling their firms Advisor Solutions Program.
Seems, Jones is on the move towards managed money. As I understand, this fund can only be purchased through thier advisor; and, only if you opt to be a part of their Advisor Solutions Program. To me, this fund, as well as other Bridge Builder Funds, could potentially suffer from asset bloat.
I use to own WASAX (Ivy Asset Strategy) years back when it was nimble enough to reposition from time-to-time towards the faster moving market currents without market dislocations. Overtime, this fund, because of its good performance, became asset bloated and began to falter. So, I moved away from it into another world allocation fund years back after the 2010 Flash Crash where Ivy Asset Strategy allegedly flushed a large number of S&P E-Mini contracts into the system. When buyers dried up the flash crowd computers began massive sells and the markets crashed. Now, it seems, others are moving away from the fund. Currently at 5 Billion in assets I'm thinking it is still too large to run the type of strategies it did when I owned it. I might invest in it again if it were to reach a size where it could become more nimble moving back towards a more aggressive style of positioning.
And, what's up with folks moving away from Dodge & Cox Stock Fund? Is it asset bloat?
And, furthermore, seems likes Americn Funds has some good funds getting kicked to the curb as well.
Perhaps, too many investors chase good performance rather than position for it.
Makes me wonder?
Skeet

C-class shares should be outlawed. NO ONE except the broker benefits from these. If this is the only way some investors can eventually get to F-class shares, go somewhere else. It wasn't very long ago that folks who were sold C-class shares were told "these are no-commission funds". Yeah, no upfront load. Just a killer annual 12b-1 that goes to the broker-dealer and salesperson.

The Study: The author (Ben Carlson) based his article on a newly released NACUBO Study of Endowments (NCSE).http://www.nacubo.org/Documents/about/pressreleases/2016 NCSE Press Release FINAL.pdf
Overview:
Over the past 10 years the Vanguard Portfolio (an index-based model comprised of 60% equities and 40% bonds) beat the performance of the average college endowment studied by about 1% per year (6% yearly for the Vanguard model and 5% yearly for the average endowment).
Unlike the Vanguard model, the endowments invested substantially in alternative investments. The amount so allocated varied by size of endowment, and was highest (58% of invested assets) for endowments over 1 billion dollars.
Author's Conclusions and Assertions:
(1) The author states that he was surprised by the results because the endowments are considered more "sophisticated" than the Vanguard balanced index. (He seems to equate using alternative investments with "sophistication").
(2) He notes that the higher costs of alternative and actively managed investments partially explain the underperformance of the endowments.
(3) He concludes that "sophisticated" investments (i.e. alternative and actively managed investments) do not work as well as "simple" investments.
My Observations:
- 10 years is a very short time on to base such sweeping generalizations. The past decade was marked by both generally positive equity and bond markets. In particular, the rate on the U.S. 10-year Treasury bond fell from around 5% in 2007 to 2.45% at the end of 2016. (Interest rates and bond prices are negatively correlated.) Thus, the balanced index fund was helped by the dramatic fall in interest rates.
- Indexes don't think. So they didn't have to consider the damage a sharp rate reversal would have imparted on their value. But human investors do think. By diversifying into alternatives the endowment managers were mitigating risk (away from bonds). From a gambler's perspective those sticking stodgily to a 40% bond component were the true gamblers.
- Since indexes don't think, they didn't have to consider the damage a prolonged bear market in equities would have imparted on their value either. Human investors, as already established, do think. By diversifying into alternatives the managers were mitigating risk away from equities.
Use of Alternatives:
- Alternatives are much maligned. What are they? Broadly defined they are investments not thought to be closely correlated with equity or bond performance. One common alternative is hard assets (real estate, commodities, energy, precious metals). While not necessarily expensive to own, these investments are highly volatile. Commodities, as defined by the Goldman Sachs Commodity Index (GSCI), endured one of their worst bear markets in history over the 10 year period covered by the study, off more than 50% from their peak at one point in 2016. Another popular alternative is short-selling. This approach also suffered over the past decade as equity prices were generally positive (excepting 2007-2008). Additionally, short selling and various forms of derivative investing are quite expensive. By owning these alternatives an investor is in-effect buying "insurance" to protect against a steep market decline.
Final Thoughts:
- Generally, a 100% equity based index should outperform most alternatives (including bonds) given a long enough time frame (but 10 years is painfully short). By logical extension (given a multi-decade time frame) lower cost index funds should prevail. I've no argument there - if one wants to assume the risk inherent in equities. I suspect that under normal circumstances the 60/40 Vanguard Portfolio represents significantly less risk than an all-equity portfolio and would be a prudent investment for many. However, in an era of ultra-low interest rates the risks were (and remain) considerably elevated.
- Think of what the endowments did during the decade studied as hedging their bets. They bought insurance to protect their portfolios (and institutions) against potential steep declines in equities and/or bonds. It cost them about 1% per year (compared to the Vanguard index) to carry this insurance. Indexes don't think. So, they'd never perceive a need to carry insurance. Over the past decade the unthinking won out over the thinking. That's my take-away.

Sigh.
"He underperformed in his final year."
Neff underperformed over the period from 1984 to 1995 - the final eleven years of his career, as I documented.
"Speculating, that [final year] might well have been a major influence on why he retired."
Bzzt. "Effective at year-end 1995, Mr. Neff will retire and Mr. Freeman will assume the position of portfolio manager of the Fund." That was from the Feb 23, 1995 prospectus for which I provided a link. Neff's retirement was planned well in advance.
Now, let me point out something I didn't write. In the thread on greatest investors, I did not say that Neff didn't belong in that list. You might think, "well, I wasn't critical about anyone mentioned, so that doesn't prove anything." Take a look, I specifically and in some detail criticized including Icahn.
So you didn't have to go digging up quotes to show me what a wonderful overall record Neff had. But ... the fact that he had a great couple of decades doesn't offer any insight into finding or sticking with active managers.
You wrote that you walked away. Why? How long did you wait before bailing? Was it bailing or something else? By emphasizing his career record and ignoring his last several years (calling out only his final year), are you tacitly suggesting that people should have ridden him all the way through those lackluster years? Even though they would be giving up some of the earlier excess gain?

Hi msf,
Thanks for your comments concerning John Neff. Certainly his illustrious investment career does not end with a bang, but more with a whimper. He underperformed in his final year.
Speculating, that might well have been a major influence on why he retired. Perhaps his time had passed and he recognized that he lost that magic feeling. But one year a career does not make.
I was definitely not rating the man on only the final years of his long tenure with Windsor. I did own that fund for some fraction of that period. I based my statement that he was a legondary fund manager on his entire tenure. I sure didn't know his complete record so I extracted it from the Imvestopedia website.
Here is the paragraph from that source that convinced me that he truly earned his reputation:
"John Neff\'s average annual total return from Vanguard\'s Windsor Fund during his 31-year tenure (1964-1995) as portfolio manager was 13.7%, against a similar return from the S&P 500 Index of 10.6%. He showed a great consistency in topping the market\'s return by beating the broad market index 22 times during his tenure and was regularly in the top percent of money managers."
If it interests you, here is a Link to that website:
http://www.investopedia.com/university/greatest/johnneff.asp#ixzz4XxnIh8Xn
I was presenting John Neff's complete total performance record. I hope the summary data presented by Investopedia was accurate. It was part of their greatest investor series. They quoted the CFA Institute as the source. You might be motivated to check it. I am not.
Best Wishes

From my most recent post here

"Vanguard actively managed funds have been and are managed by some famous investors. For a very long period legendary John Neff directed the Windsor Fund to outperform his benchmark until his recent retirement. He's just one of several examples."
Actually not so much. He did have an outstanding two decade record. Unfortunately, he managed Windor for another 11 years, "recently" retiring at the end of 1995.
Over the first ten of those years 1984-1994 (using fiscal years ending Oct. 31), he underperformed the fund's benchmark, the S&P 500, a bit, 14.5% vs. 14.8%. His final year was a relative (albeit not absolute) disaster, with a total return of 17.8% vs. the S&P's 26.4% (for fiscal 1995).
Those of us who became aware of him at the end of his career wondered what all the hubbub was about.
1995 Prospectus (for ten year records, 1984-1994)
1994 Prospectus (for 1995 record, and 10 year record 1985-1995)

Hello,
For those interested, linked below is information on American Funds different share classes.
https://www.americanfunds.com/individual/investments/share-class-information/share-class-pricing.html
Click on the F shares to view the different type of F shares available and details about these shares.
And, below is another link that covers frequently asked questions about fund shares.
https://www.americanfunds.com/individual/service-and-support/other-resources/share-classes-pricing-options.html
Click on the C share conversion tab for more information about C shares converting to F-1 shares.
I think this should posture my comments made in this thread earlier and clear the confusion that some might have.
Best regards,
Old_Skeet

Hi Guys,
There has been much discussion of Vanguard Index products (the Bogle Model) on this thread. The exclusionary emphasis has been on Vanguard Index funds. That's not too surprising given that Vanguard emphasis that segment of their business.
But Vanguard actively managed funds are worthy of portfolio consideration. There are a ton of them, and many have superior performance records. Personally, I own a healthy mix of both their Index and actively managed funds.
Vanguard actively managed funds have been and are managed by some famous investors. For a very long period legendary John Neff directed the Windsor Fund to outperform his benchmark until his recent retirement. He's just one of several examples.
A fellow named Dan Weiner has been monitoring Vanguard for quite some time and publishes a rather expensive newsletter. He also shows up at Money Show events. Here is a Link to an interview with him that was conducted a couple of years ago that might be of MFO interest:
http://www.kiplinger.com/article/investing/T041-C009-S002-dan-wiener-likes-vanguard-actively-managed-funds.html
I certainly follow one rule that he identifies in the referenced interview: " I’m not a buyer of mutual funds. I’m a buyer of managers ". So am I. For an actively managed fund, the name of the game is insightful and skillful managers.
Thank you all for your participation.
Best Wishes.