explain your disagreement.
https://www.bloomberg.com/news/articles/2017-10-05/this-is-how-to-create-the-top-emerging-markets-etf

The word "value" doesn't appear once in that article.

explain your disagreement.
https://www.bloomberg.com/news/articles/2017-10-05/this-is-how-to-create-the-top-emerging-markets-etf

@AndyJ Yes. There was an overall nod in favor of developed ex-US. In that regard, I am currently considering increasing my overall allotment to foreign stocks by a few % in 2018 via a chicken little approach and have set up a chart to track FMIJX vs SPHD performance as 2018 progresses. A nod in favor of FMIJX will probably cause me to decrease or eliminate SPHD and increase FMIJX (FMIJX is close to 20% cash and 15% US right now hence the "chicken little" part of my thinking).

Alarming is the fact that so few people have a written investment/retirement plan.
"• Calculating retirement savings needs. Forty-seven percent of workers who provided an estimate for their retirement savings needs did so by guessing, a survey finding that is consistent across the three generations of workers. Only seven percent have used a retirement calculator.
• Formulating a written strategy for retirement. Sixteen percent of workers have set forth a retirement strategy in writing. Ironically, Baby Boomers (12 percent) and Generation X (15 percent) are less likely than Millennials (20 percent) to have a written strategy."
While a written investment strategy is useful, it lacks a good deal of meaning until you estimate what you’ll actually need for retirement.
Some simple calculations (expenses and income) will tell a person where they are and what they may need to achieve in order to reach a Retirement Number that will provide them with a decent retirement. While there are many calculators that can be used to shortcut this calculation, I’m of the opinion that actually WRITING these numbers on a piece of paper will prove more meaningful.
After adding up your monthly expenses, you subtract your expenses from your monthly after-tax income. In most cases you will have a deficit.
You will need your investments to make up for the deficit.
Multiply the deficit amount by 25 (representing a 4% drawdown percentage) then divide by your tax bracket percentage (a 20% tax bracket = .80 – a 28% bracket = .72, etc.)
The final number is often called your Retirement Number or your Magic Number.
This is not a wishful number or some pie-in-the-sky number. It represents the amount of money that you should seek to protect – a number you don’t wish to fall below when you reach retire. Of course, as your income and expenses change over time, you will want to recalculate your Retirement Number.
If your investments fall below this number you should consider cutting your expenses or increasing your income – or both.
As I’ve said many times (and I won’t repeat myself) the trick is not just buying and walking away but also learning when to sell. Avoiding market crashes is the surest way I know to protect your Retirement Number.

For most tax purposes, all traditional IRAs are lumped together into a single total. So segregating nondeductible contributions into a separate IRA doesn't simplify taxes. You're nontaxable fraction of an IRA distribution, as calculated on Form 8606 is:
total of all nondeductible contributions across all trad IRAs / total value of all trad IRAs
There is a rational desire not to "eat into principal". You don't want to deplete your assets that generate future dividends and growth. That said, it should make no difference whether you harvest your profits (while leaving principal untouched) in the form of interest, dividends, or capital gains.
Own a bond, and you get interest while the principal remains intact (though shrinking in real value).
Own a bond fund, and you get that same interest, but for legal reasons payments are called "dividends".
Own a stock, and you get cash dividends while keeping the same number of shares (which may go up or down in value).
Own a stock fund, and you those cash dividends passed through to you as fund dividends.
Buy 100 shares of a stock @$20 ($2000 principal), sell 20 shares when it goes up to $25, and you've got $100 in cap gains and also your original principal (80 shares @$25).
If that stock is in a fund and the manager sells those 20 shares, you get the $100 cap gains in the form of a fund "dividend", and your fund shares are worth what you paid for them (no change in principal).
If the fund manager doesn't sell and distribute the profits, then the fund shares go up 25%. You sell 20% of your fund shares, get the same $100 capital gain, and your remaining fund shares are still worth what you paid originally (no change in principal).
All of these retain your principal investment - whether you get interest, dividends, cap gains dividends, or take capital gains yourself. Yet somehow it feels different when the fund manager sells a stock (generating a cap gains div) vs. when you sell a fund share yourself.
I'm guessing that therein lies the source of differing perspectives.

Use the SEC site. For old (semi)annual reports, do a search on form N-CSR.
Specifically:
1) Search for the fund by ticker (e.g. PRWCX) on this page:
https://www.sec.gov/edgar/searchedgar/mutualsearch.html
2) Click on the left hand side link to get all the docs for that fund (and unfortunately, all its siblings in the trust that contains the fund). For PRWCX, that takes you to:
https://www.sec.gov/cgi-bin/browse-edgar?CIK=S000002070&action=getcompany&scd=filings
3) Enter N-CSR in the Filing Type box and click on the Search button. That will retrieve all the N-CSR (annual) and N-CSRS (semi-annual) reports.

I was trying to locate a 2 or 3 year old fund report for PRWCX to refresh my recollection of their strategy back than (2014 or 2015). Can only locate the most recent annual and semi-annual reports on their website. Is there a way to go back in time and see what a fund’s manager was saying a few years ago?
(I realize that with some fund managers the tune never changes. :))

Just finished reading 'The Wizard of Lies' aka Bernie Madoff, and got to wondering if PRWCX could be a.....nah? Or could it.....nah.

It’s a small niche mostly mid-cap fund that morphed into a bloated large-cap mostly blue chip fund than transformed itself into a pseudo hedge-fund trading options on its equity positions for defensive purposes. Some call it balanced. Price says it’s closed - but otherwise isn’t saying exactly what it is.
Who was Madoff? Did money beat a path to his door?
—
Appendix: I struggled to uncover the options trading in which PRWCX engaged at one point. Geez - had to go way back to their December 31, 2011 Annual Report to locate it.
FWIW - “Before we review the portfolio, we want to briefly discuss the Capital Appreciation Fund’s covered call overwriting strategy, which we have employed for more than three years. Covered call overwriting involves buying a stock and then selling a call option—a contract whereby we agree at a future date to sell the stock at a predetermined (strike) price if the stock is above the predetermined (strike) price. In return for selling this call option, we are paid a premium (typically 3% to 6% per annum) that provides extra income to the fund and its investors. While this strategy caps our upside in an individual stock (usually 10% or higher), it provides incremental income that can enhance total returns and lower our downside risk. Over the last three years, this strategy (return combination of underlying stocks, call income, and dividend income) has generated a stronger return than the fund itself and has done so with materially lower risk. As of December 31, 2011, a little more than 20% of our equity holdings have calls written against them. Given the excellent returns and even more excellent risk/reward profile of this strategy, we believe it will continue to play a meaningful role in your fund.”

@msf, your point is well taken. As I at least have learned from MFO, it would have been smarter for me to focus on taking the one with the least negative volatility since that's what we're more sensitive to. Nonetheless, there's no doubt in my mind that some people would prefer your first option and others would prefer the second- if we were ever in a situation where you knew what the future would bring. If we don't know the future then those spikes might scare me more out of fear the bounce back wouldn't happen each time.
I also think your last point about splitting the portfolio into buckets or sleeves with different "goals" and different approaches is a smart way to do things. We're told to keep much more than a one month cushion in "cash" and we all have to be able to deal with the unexpected from time to time (I had my car inspected in October and ended up with a new muffler) so hopefully most people aren't walking a tightrope every month.
@MikeM, I think by definition if you own something that's an insignificant portion of your portfolio then it's not going to make much difference. One caveat, though, is that it's not really about the individual fund, its about the totality of your portfolio. I think, at least for myself, I'd be far more willing to put 20% in a balanced fund or several of them because I feel like I understand them better, I've read a lot more about the benefits of a "balanced" portfolio over many years and in most cases alternative funds aren't going to tell you enough about their process/algorithm to understand it at a level that might make you feel comfortable enough to make a big allocation. Funny enough, we don't actually know the details of how a balanced fund makes it's decisions either but I feel like I know more than I really do.
I certainly don't want to give anyone advice and this isn't what I'm doing with my own portfolio, but there's no reason you can't have both balanced funds and alt funds in a portfolio. They'll do different things for you depending on the type of alt fund(s) you choose but the combination could provide better diversification than just relying on balanced funds or a combination of stock and bond funds.
You mentioned early on that you like to compare these alt funds against a balanced fund like PRWCX. It might also be worthwhile to compare it to a very simple alt strategy like SMA10 or SMA12. You pay a lot for these complicated algorithms and if they can't beat something that you could do on your own with very little effort then they'd have to have something else really special to keep me interested. That could be a super smooth ride, far better tax efficiency or even the potential to generate positive returns in a big downturn, but in a lot of cases complicated isn't better.

Dogs of the Dow is an early rules-based strategy. Quant has come a long way since then.
I ran a simulation back to Jan 1999. One-year holding periods, rolling on a weekly basis. So 938 "years" were tested.
Dogs of the Dow (5 lowest priced Dow stocks from top 10 Dow yielding stocks) averaged 8.63% per year return vs 6.85% for SPY. Dogs beat SPY 57% of every year tested.
But the standard deviation from holding just five stocks was higher. So the average Dogs Sharpe and Sortino ratios were lower than SPY. And average Dogs max drawdown was higher than SPY.

VT
Vanguard Total World Stock etf VT is a solid one-stop choice for exposure to global stocks. It accurately represents the global investable universe and is well diversified.
morningstar.com/etfs/arcx/vt/quote.html

@LLJB - you identified the crux of the matter that I was trying to address: "what return do you need, what's your risk tolerance and what's your time horizon?"
ISTM that investing for income is one response to this question. People in retirement need a certain minimum amount of cash monthly, they have a higher need for cash to more than barely get by, and beyond that want cash to enjoy their retirement. The more assured the cash stream is, the lower the expected long term result (and less money expected for that third tier - cash to have fun). That's what I was trying (apparently unsuccessfully) to illustrate with bonds.
I also mentioned annuities as a way to address some of the risk aversion. An annuity that pays out enough to meet just the first tier of needs (survival cash) can allay some people's concerns about having an adequate cash flow. As with most risk/benefit tradeoffs, that comes with the expectation of lower total returns.
Now to get into the weeds :-) One can remove reinvestment risk from bonds by purchasing long term bonds (say, 30 year Treasuries). If your retirement lasts longer than that, well, congratulations!
Would one automatically take the less volatile investment if two investments had the same expected long term returns? Not necessarily. Volatility is not identical to risk, and volatility (std dev) may not always be a useful figure. Since we're talking in the abstract here, I'm not going to worry about whether there are real world investments that behave as follows:
One investment returns 2%/month 50% of the time, and 0.0098% 50% of the time. You don't know which one for each month, but over the course of a decade it returns 230% (that's basically 1% compounded 120 times)). The other returns a rock steady 1%/mo, except for a random spike (down 50% one month, up 104.02% the next month).
The std dev of the first investment is 1.00 (since the monthly return each month is 1 ± 1). The second investment's std dev is 10.53. Yet I'd take that investment. All I would have to do is wait out the dip (crash?) for a month and I'd have a smoother ride. Keeping a one month buffer is all I'd need.
So much of this is subjective. Given two investments that you somehow know will have the identical performance over, say, ten years, and you will not be selling over that period of time, their paths to that return (volatility) don't objectively matter.
Which gets us back to addressing sequence risk. Some people will bifurcate (or trifucate) their portfolio into buckets to manage that risk, drawing from the most stable bucket and disregarding the volatility of the other bucket(s). Others will prefer investments that try to temper downside movements. It sounds like KCMTX might serve them well, at least if it provides the downside protection you described.

@Junkster, @PBKCM et al...
I recently tried to digest an Alt strategy which suggested shorting or buying puts of HYG (Junk Bonds).
I believe the strategy would pair the shorted or put position of HY bond (HYG) along with owning an equity position and /or puts of the equity (IWM is mentioned below).
Is this one of the possible strategies that an Alt Funds would employ?
From one link:

The bottom line: for those worried that the current blow off top "Icarus rally" will end some time in the next few weeks, as BofA's Michael Hartnett predicted yesterday, ignore S&P puts (or selling calls), and just buy either outright gold calls, or 6M gold strangles, which as noted above, have never been cheaper. Wary of gold? Then buy HYG puts/put spreads to hedge a coordinated bond+equity sell-off, or alternatively, own IWM puts against HYG puts, "a strategy that at current pricing has offered a highly asymmetric risk-reward."

BOA Analysis Report reference by ZeroHedge:
it-has-never-been-cheaper-hedge-market-crash-using-one-trade

@randynevin, Thanks for mentioning this fund.
Seems like the perfect example of where cost matters.
Each share class charges a different set of fees (Expense Ratio & Loads, 12-b1, etc) causing most of this distortion in the NAVs of the same fund over time. Not sure if this "split" is in the best interest of the shareholder or the marketing department.
The advisor share class NBGAX (1.35% ER) is almost 80% more expensive as the institutional share class NBGIX (0.86% ER).
There is a share class NBGSX (R6 shares) that has an ER of 0.75%.
Share Classes:

Looked at over the last 29 years (1988- 2017), a $10k invested in the same fund but different share classes would have netted the following:
NBGIX = $313,098 (over 12% more in the investors pocket than NBGAX Advisor share class) The Advisor "share" was 12% more than Institutional "share"
NBGAX = $274,324
NBGNX = $301,654
NBGEX = $298,384

Finally, This fund seems to manage downside risk very well so you pay for that and this fund seems to have a track record to prove it can manage downside risk better than many of its managed peers and especially the index (VISGX).
Also, over the last five years PLTIX seems to have exhibited some positive "Factor Based" results in the Samll Cap Growth space.
Over the last 10 years 3 other funds that compared well against NBGSX (PRDSX, VRTGX, and CCALX):

@randynevin
You are correct.
See this November 17, 2017 filing:
https://www.sec.gov/Archives/edgar/data/44402/000089843217001047/a497.htm

Good analysis @LLJB. Which takes me back to this fund, KCMTX and funds like it.
So we have a down turn and this fund adjusts and performs admirably, meaning it loses less than maybe a balanced fund would. Now the positive effect of that safety on your portfolio is only felt if you have significant skin in the game, right? If you have 1, 3 maybe 5% in the fund, how does that protect your over-all portfolio versus maybe what a balanced fund would do? Own 10, 20, 50%... now you will profit in a down market with an alternative fund's benefit (if it works) .
Really just pondering about ownership of alternative funds in general I guess. Especially if you don't have enough ownership to significantly mean something to the whole. As I've said earlier, I've been burned before with this type of fund. I now would rather trust a well managed balanced fund and my own allocation to equity-bonds-cash. To each there own though. Sure looks like a very good fund, in an up market anyway.

What happened with Neuberger Berman Genesis (NBGNX)? The NAV shot way up on Dec 11, almost like a reverse 1-for-2 split, but the numbers don't quite line up. Have there been any announcements? I couldn't find anything on nb.com. Thx!

FWIW, NTF at Schwab with $100 min.

FYI: IF YOU’RE WORRIED THAT INDEXING threatens the smooth functioning of the stock market, it’s helpful to spend an hour chatting over coffee with Charles Ellis—which is what I did last week when I was in New Haven, Connecticut. Ellis is one of indexing’s most eloquent advocates, including in his bestselling book Winning the Loser’s Game and in his latest tome, The Index Revolution.
Regards,
Ted
http://www.humbledollar.com/2017/12/worse-than-marxism/

FYI: Wall Street may not be paved with gold, but sometimes it sure feels that way. Amazon was recently trading at almost $1,200, versus a split-adjusted $1.50 when it went public in 1997. Apple’s stock is at $170, compared with $12.19 at year-end 2008. Bitcoin soared toward $18,000 in December, up from less than $1,000 a year ago. Getting rich—and outperforming the market averages—has rarely seemed easier.
Regards,
Ted
http://creativeplanning.com/news-article/easy-money/