I have a 403(b) account at Fidelity with all fidelity only choices and another Employer contributed Vanguard based retirement account.
From 2015, The fidelity account will be moved to Vanguard by the employer, I wanted to send some additional fund suggestions in addition to choices below to see if they will consider adding more choices, This Vanguard account has target funds and index funds.
Bond Funds
PIMCO Total Return Admin-----------PTRAX
Balanced Funds (Stocks and Bonds)
Vanguard Wellington Fund Inv--------VWELX
Domestic Stock Funds
Perkins Small Cap Value L------------JSIVX
T. Rowe Price Instl Large Cap Growth---TRLGX
Wells Fargo Advantage Discovery Instl--WFDSX
Dodge & Cox International Stock-------DODFX
I have large allocation in VWELX and DODFX and consider rest of the choices not that great. On fidelity side I had large allocation in FLPSX, FSICX, FNMIX and FSCRX, That money will need to move to above funds.
Please suggest funds preferably with low cost and group managed(instead of single star manager) suitable for retirement account that I can send as suggestion to the Employer.

@MFO Members: M* ETF Conference: Q&A With Russ Koesterich, BlackRock.
Regards,
Ted
http://www.morningstar.com/cover/videocenter.aspx?id=665610

@MFO Members: M* ETF Conference: Q&A With Russ Koesterich, BlackRock.
Regards,
Ted
http://www.morningstar.com/cover/videocenter.aspx?id=665610

Mr. Koesterich is the chief investment strategist for BlackRock and iShares chief global strategist.
The briefing room was packed. Perhaps Several hundred people. Many standing along wall. The reception afterward was just madness.
His briefing was entitled "2014 Mid-Year Update - What to Know / What to Do."
He threaded a somewhat cautiously reassuring middle ground. Things aren't great. But, they aren't terrible either. They are just different.
Different, perhaps, because the fed experiment is untested. No one really knows how QE will turn out. But in mean time, it's keeping things together.
Different, perhaps, because this is first time in 30-some years where investors are facing a rising interest rate environment. Not expected to be rapid. But rather certain. So bonds no longer seem as safe and certainly not as high yield as in recent decades.
To get to the punch-line, his advice is:
1) rethink bonds - seek adaptive strategies, look to EM, switch to terms less interest rate sensitive, like HY, avoiding 2-5 year maturities, look into muni's on taxable accounts
2) generate income, but don't overreach - look for flexible approaches, proxies to HY, like dividend equities
3) seek growth, but manage volatility - diversify to unconstrained strategies
More generally, he thinks:
We are in a cyclical upswing, but slower than normal. Does not expect US to achieve 3.5% annual GDP growth (post WWII normal) for next decade.
Reasons: high debt, aging demographics, and wage stagnation (similar to Rob Arnott's 3D cautions).
He cited stats that non-financial debt has actually increased 20-30%, not decreased, since financial crisis.
US population growth last year was zero.
Overall wages, adjusted for inflation, same as late '90s. But for men, same as mid 70s. (The latter wage impact has been masked by more credit availability, more women working, and lower savings.)
All indicative of slower growth in US for foreseeable future, despite increases in productivity.
Lack of volatility is due to fed, keeping interest rates low, and high liquidity. Expects volatility to increase next year as rates start to rise.
He believes that lower interest rates so far is one of year's biggest surprises. Explains it due to pension funds shifting out of equities and into bonds and that US 10 year is pretty good relative to Japan and Europe.
On inflation, he believes tech and aging demographics tend to keep inflation in check.
BlackRock continues to like large cap over small cap. Latter will be more sensitive to interest rate increases.
Anything cheap? Stocks remain cheaper than bonds, because of extensive fed purchases during QE. Nothing cheap on absolute basis, only on relative basis. "All asset classes above long term averages, except a couple niche areas."
"Should we all move to cash?" Mr. Koesterich answers no. Just moderate our expectations going forward. Equities are perhaps 10-15% above long term averages. But not expensive compared to prices before previous drops.
One reason is company margins remain high. For couple of same reasons: low credit interest and low wages. Plus higher productivity.
Advises we be selective in equities. Look for value. Like large over small. More cyclical companies. He likes tech, energy, manufacturing, financials going forward.
This past year, folks have driven up valuations of "safe" equities like utilities, staples, REITS. But those investments tend to work well in recessions...not so much in rising interest rate environment.
EM relatively inexpensive, but fears they are cheap for reason. Lots of divided arguments here at BlackRock.
Japan likely good trade for next couple years due to Japanese pension funds shifting to organic assets.
He closed by stating that only New Zealand is offering a 10 year sovereign return above 4%. Which means, bond holders must take on higher risk. He suggests three places to look: HY, EM, muni's.
Again, a moderate presentation and perhaps not much new here. While I personally remain more cautiously optimistic about US economy, compared to mounting predictions of another big pull-back, it was a welcomed perspective.

Ben Johnson, Director of Manager Research at Morningstar, hosted an excellent overview this afternoon on Exchange Traded Fund trends, during a beautiful pre-autumnal day here in Chicago. It's the 5th such conference M* has held.
The overall briefings included Strategic Beta, Active ETFs (like BOND and MINT), and Exchange Traded Fund Managed Portfolios.
We got clearance to share some charts from the Strategic Beta portion, which I also found most interesting and perhaps some of you on the board will too.
Points made by Mr. Johnson:
1. Active vs Passive is a false premise. Many of today's ETFs represent a cross-section of both approaches.
2. "More assets are flowing into passive investment vehicles that are increasingly active in their nature and implementation."
3. Smart beta is a loaded term. "They will not look smart all the time..." and investors need to set expectations accordingly.
4. M* assigns the term "Strategic Beta" to a growing category of indexes and exchange traded products (ETPs) that track them. "These indexes seek to enhance returns or minimize risk relative to traditional market cap weighted benchmarks." They often have tilts, like low volatility value. And are consistently rules-based, transparent, and relatively low-cost.

5. Strategic Beta subset of ETPs has been explosive in recent years with 374 listed in US as of 2Q14 or 1/4 of all ETPs, while amassing $360M, or 1/5th of ETP AUM. Perhaps more telling is that 31% of new cash flows for ETPs in 2013 went into Strategic Beta products.

6. Reasons for the growth summarized here:

These quasi active funds charge a fraction of traditional fees. And, a general disillusionment with active managers is based on recent surveys made by Northern Trust and PowerShares.
M* is attempting to bring more neutral attention to these ETFs, which up to now has been driven by product providers. In doing so, M* hopes to help set expectation management, or ground rules if you will, to better compare these investment alternatives. With ground rules set, they seek to highlight winners and call out losers. And, at the end of the day, help investors "navigate this increasingly complex landscape."
They've started to develop the following taxonomy that is complementary to (but not in place of) existing M* categories.

Honestly, think this is M* at its best.

@Old_Joe: I wish I could say I have a majic formula for successful investing, but that would be dishonest. Generally speaking, I'm, a very aggressive investor and am always looking for investments opportunities especially when there is blood in the water, ie.; investments no one else wants. Two examples are EIX Preferred Stock who's dividend was suspended for eight quarters the share price dropped below ten dollars,(par $25) and GMAC Bonds that no one expect Marty Whitman and a few other were buying at 40 cents on the dollar.
Investing is not a one sided game, never make an investment with the idea of not losing money, invest to make money even though there at times when that will not happen. You cannot walk away from risk, if you can't stand the heat, volatility, don't invest in the first place. If you make a mistake, cut your losses, never get emotionally attached to any investment. Always, run with you winners, Big Mo, two examples NI bought at $8.40
a share and still holding, PFF bought at $16.00 and still holding.
I don't believe in owning too many stocks or mutual funds. You can attain success with the motto 'few is better". Never invest in something you know nothing about.
Regards,
Ted

One ... QRAAX, which is probably a 5 alarm fund :)
I own it and like it going forward. (Please don't ask me to explain why.) My biggest concern is that at now under $100 mil in assets, Oppenheimer might shut it down or merge it into something else before commodities enter their next bull market. It's so hard to run against the current now days.

Hey there Ted-
I got to thinking about you while in the shower this morning (no, not that way!), as I was mentally reviewing your general style with respect to market investing. To the best of my recent recollection at least, my impression is that you tend to be nearly fully invested, aggressively so if you don't mind, and pretty optimistic with respect to the market potential as a whole. And that perspective seems to be working just fine for you.
The reason that I happened to single you out, in addition to your perspective, is that we are pretty close in age- only a couple of years apart, if I remember correctly. Also, I can't ever recall you being at all negative about staying fully invested. So that led me to wondering...
Would you describe your approach as perhaps a "modified buy-and-hold", in the respect that while you may from time-to-time sell some stuff and replace it with other stuff, by and large you are always pretty much fully invested? How exactly do you see your market approach?
Taking that question a little further, I would think that such an approach could be very rewarding over a long time-frame of investing, such as someone in their 30s/50s might be looking at. But at our age, with the markets "scheduled" to take a significant dive "sometime" in the future (who knows when?) is that a good position, given that we are getting up there and that the next major market down/up cycle could take 4,5, or 6 years to play out?
I'd be very curious to know if in your lifetime of experience you have ever attempted to "get out" before something really bad happened, or have you just let the thing roll no matter what?
I hope that you don't interpret this as being too personal- I'm always trying to learn, and you can only do that by listening to folks with ideas and experiences different that one's own.
Regards- OJ

FYI: Stocks rose, with the Dow Jones Industrial Average moving into record territory, as investors were reassured by the prospect of low interest rates for a while longer.
Regards,
Ted
http://online.wsj.com/articles/u-s-stock-futures-pause-ahead-of-fed-decision-1410956625#printMode
http://markets.wsj.com/us

FYI: Oaktree Capital Group LLC (OAK), the world’s biggest distressed-debt firm, is starting its first in-house mutual funds as it joins the largest private-fund managers in raising money from individual investors.
The Los Angeles-based firm filed today with the U.S. Securities and Exchange Commission to sell shares in the Oaktree High Yield Bond Fund and the Oaktree Emerging Markets Equity Fund. The minimum initial investment in each would be $25,000, according to the filing.
Regards,
Ted
http://www.bloomberg.com/news/print/2014-09-15/oaktree-to-start-first-mutual-funds-to-woo-individuals.html

FYI: One index that has done very well over the last couple of months is the Dow Jones Transportation Index. As shown below, while the Dow Jones Industrial Average has yet to make a new high, the Dow Transports index has broken out nicely. In fact, the Dow Transports index is up nearly 17% year-to-date, which is 13 percentage points more than the Dow Industrial's minimal YTD gain of 3.46%. Many investors look for the Transports to lead the way, and the fact that it has done so well is a bullish sign for the major indices like the Dow and S&P 500 in our view.
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/9/17/dow-theory-still-bullish.html?printerFriendly=true

@JohnN: Sorry John, but I linked this article at 5:00 AM this morning, but don't stop, keep on linking.
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/15730/bill-gross-used-45-billion-derivatives-to-lift-gain#latest

Is it the Fed or is it a hyper financial media over speculating and creating hysteria? You decide.
http://www.cnbc.com/id/102005319

Vanguard Total Stock Market (VTSMX) and other broad market averages are putting in extremely high showings relative to other mutual funds for the year-to-date. What might be the reason for this, and what might this portend?
Your thoughts appreciated.

I do think it is remarkable how the broad market indexes, the Total Market Index and the S&P 500, are beating the pants off the vast majority of actively managed funds.
I certainly don't have all the answers to this, but one issue is that small cap stocks are doing terribly this year, and the 2 indexes mentioned above are cap weighted......so they are invested in the large cap stocks that are outperforming, and underweighted in the small cap stocks that are underperforming.
That certainly is not the whole of it. Hank mentioned the cash balances of active funds, but that is more by choice. There are many active funds that have almost no cash. You don't have to have much cash sitting around for redemptions....you could just sell as redemptions come in. But a lot of funds have elected to hold larger than normal cash balances, some as a risk-reduction measure.
I guess a large part of it is expenses......the Vanguard Total Market Index ETF has a .05% expense ratio...as do the Admiral Share class of the mutual fund, which has a 10K minimum purchase. I guess if the market is up 9% and you have a 1.0%-1.25% expense ratio, and brokerage fees on top of that, some losses due to bid-ask spread and "market action" from your purchases [your buying makes the price go up, your selling makes the price go down], you can't compete.
Another reason may be the zero-sum game aspect of it all. If an active fund outperforms the index, some other guy has to underperform. The successful buyer on one end of the trade has an unsuccessful seller on the other end, and vice versa.
I agree with you, the index funds are trouncing the actively managed funds, and there may be some other reasons not given so far. I'd like to know too.

I'm glad Charles went first. Knows a lot more than I do.
On point 1, I'm hoping we're seeing what's known as a "consolidation" stage, and that after a certain period of months stocks will continue higher. I've no scientific or other data to support this. But, where are we without hope? :)
On point 2, it seems to me like there are long stretches (years or even decades) when indexes outperform, and also long stretches when the opposite is true. I think it is partially due to investor psychology and money flows into and out of both categories - but can't nail it down for you in an intelligible way.
A 3rd point is that stock indexes will (almost by definition) outperform the aggregate of actively managed funds over very long stretches. That's baked in the cake. Not just the lower fees, but remember that managed funds are rarely 100% in equities like an index is. They have to hold some cash to facilitate inflows and redemptions. Unless it's a highly aggressive fund, it's also probably holding a significant "cushion" in fixed income for unexpected contingencies (5-15% is not uncommon).

Markets’ Rose-Tinted World Commentary from MOHAMED A. EL-ERIAN
PLENTY of UNCERTAINTY
"This is a rather weighty list of questions. Yet financial-market participants have largely bypassed them, brushing aside today’s major risks and ignoring the potential volatility that they imply. Instead, financial investors have trusted in the steadfast support of central banks, confident that the monetary authorities will eventually succeed in transforming policy-induced growth into genuine growth. And, of course, they have benefited considerably from the deployment of corporate cash.
In the next few months, the buoyant optimism pervading financial markets may prove to be justified. Unfortunately, it is more likely that investors’ outlook is excessively rosy".
Read more at http://www.project-syndicate.org/commentary/mohamed-a--el-erian-asks-why-investors-are-overlooking-six-major-sources-of-global-uncertainty#qor2xgIp358RJKSw.99
Also:
Policy: Economy
New HUD chief: Mortgage credit too tight
By Joseph Lawler | September 16, 2014 | 4:55 pm
"A few years ago, bad loans and risky secondary market products prompted a housing crisis. There was plenty of blame to go around. Some believe it was too easy to get a home loan. Today it’s too hard," Castro said at a housing event hosted by the Bipartisan Policy Center Tuesday. "The pendulum has swung too far in the other direction," Castro added.
http://washingtonexaminer.com/new-hud-chief-mortgage-credit-too-tight/article/2553496?custom_click=rss

Hi again dryflower.
Hmmm.
I hear all the correction talk. And, maybe it will happen.
But I remain cautiously optimistic that things are continuing to improve, though I recognize stupid things can always set us back.
Mostly institutions drive the market.
And, if you are an institutional investor, do you really want to sell some top SP500 companies that may be healthier and perhaps better run than ever?
Do you really want to sell XOM, GE, BRK, AAPL, AA, BAC, DIS...?
To buy what?
Not so, obviously, with companies like SHLD (ouch).
Hard to see better investment options currently.
So, maybe that helps explain lack of volatility. Things are "fairly" priced. Economy continues to improve. Unless something dumb happens. Accommodative fed.
Translate: Let it ride.
I do not think it is apathy. Lots of folks still sensitive to another big drawdown.
On your 2nd point.
I think many funds today evolved during the 2008/9 crisis. All asset. Absolute return. All authority.
And all those funds, and even simple balanced funds, are struggling.
It's a bull market. And when that happens, all hedge strategies lag.
My 2 cents.
Hope all is well.
c

Mike, was looking the other night at what's available at Scottrade among the top funds in that category. Ever since its recent inception, LSFYX has pretty much led the pack here. I've even been in that one once or twice so if push comes to shove and there is no place to hide in Bondland may hang out there. Then again, (and might post on this tomorrow) I've been looking at the relation of Fed funds to money market funds rates. There seems to be a consensus that Fed funds will begin a gradual, albeit sustained rise to the 3.25 to 3.75 range by the end of 2016. A lot of seniors, including me, would jump for joy at what that would to money market fund rates. Give me 2% to 3%+ in a money market fund and......

Hey guys, sorry for the delayed response. I've been out of town. Thanks again (especially to msf and mrdarcey for the great answers! I just have a theory that the funds that don't participate (TF) will do a better over time than the funds that do participate (NTF) as far as performance goes. Yes, lower fees is part of it but I also think there is a higher level of shareholder care with the TF guys. I found it interest that many funds, like Primecap/Mairs and Power are $50 at Fidelity vs Dodge and Cox/Vanguard at $75. I looked at the "other expense" for both and assumed that Prime and Mairs may share more of the expense and, as a result, the client doesn't have to the $75.