FYI:
Regards,
Ted
http://www.cnbc.com/id/101502864/print

FYI:
Regards,
Ted
http://www.etf.com/sections/daily-etf-watch/21557-daily-etf-watch-new-infrastructure-fund.html

Pretty good thought here MJG. Liked the "sky's the blackest" reference. But that's not a slam-dunk because there's no telling whether the sky may get even darker, nor how many months, years, decades that dark sky may last. (Case in point: Japan's experience). And, I don't discount the opposite approach, "momentum investing" (not that you did), as another good method for some - just not my inclination.
I guess my biggest grumble per this and other recent posts (& guilty of it myself) is using words like "luck, fate or fortune" to describe investment outcomes. We all realize, I think, that we're actually talking about "probabilities". Probabilities can be estimated based on knowledge and past experience and can also be precisely calculated using mathematical equations. It's actually ironic I think that the often maligned John Hussman probably works more with and talks more about "probabilities" than most anyone else we discuss - yet all this mathematical/scientific calculating has led him in the wrong direction for more than a decade.
Back to the "sky's darkest thought". I think that if one cautiously invests in a few dark sky ideas based on sound reasoning, knowledge, or intuition, the probabilities say he should be correct 51% or more of the time - given enough patience to wait for the turn-around. If that rate of success can be sustained, and if trading costs don't eat up too much of the gains, than this type of (diversified) dark sky investing might pay off. Regards

The GMO shop certainly isn't enthusiastic about emerging markets either, a fact I gather from their return estimates, which i have seen. The R2000 they think is grossly overvalued, the SP500 to achieve historically poor returns over a 7 year horizon, and US high quality stocks positive but low returns. They are underweight bonds where they can be and are emphasizing absolute return vehicles, cash and tactical allocations. They run hundreds of billions in their strategies. They have a tendency to be early but right. I have been following them and their research for a LONG time.

Real nice bounce back in Europe today. EWI I bought last week in the play portfolio, when EWG got stopped out with nothing to show for it, had a 2.81% pop.
A well diversified global portfolio did very well today, a departure from the situation for the last 15 months when US equities ruled.
It was actually a risk off in US markets with mostly stocks in major indices gaining. Suspect this is from inflow into US broad index ETFs from money being pulled out of EM indices.
This would be a good time to balance globally in DM allocation if one has become too lopsided with gains in US markets.
EM is still shaky.

would you explain your investment thesis?

Thinking about to start a position in RSX or ERUS, any thought on this?

Explain the investment thesis? Do you work for Bill Gross or an investment bank or something? :-)
Not David but in my view,
A simple investment thesis would be oversold, due for a bounce back once the meaningless posturing on all sides ends.
A more detailed investment thesis would be, Russia is "too big to fail", poses significant counterparty risk to European economic interests, US posturing is more about Democrats trying to prevent being labeled as weak in defense by Republicans as a talking point for US elections than any real concern for the region, while they have minimal military or economic leverage.
There will be a lot of smoke while the West tries to get Putin's rich friends to put pressure Putin as the only leverage.
Either that works and Putin backs off and lets Ukraine figure out what it going to do with a deeply split country and be in turmoil for the next 3-5 years while the West keeps pouring in money to ensure it doesn't fail and embarrass them for taking a stand (with most of that money paid to Russia by Ukraine).
Or Putin threatens to cut off oil and gas and West backs off while Ukrainians and Russians work out a face-saving solution for the divided country.
In either case, greedy money from ETFs pours into Russian markets to exploit mean reversion. Time frame about 2-6 months. Upside about 20%.

Went to 100% cash Jan 22 from 100% QQQ as per model instructions http://stockmarketmap.wordpress.com/2014/01/
Probable 75% allocation into TLT on July 11 then switch to 100% into QQQ again on Oct 3rd ...

Very unusual big move for the fund. What could go wrong?

Morningstar used to have a very good quantitative tool, Market Barometer, that used to show the % change of different M* indexes in the 3x3 box that M* has created for different fund categories (Value-Core-Growth on X axis and Large-Mid-Small Cap on Y axis). Further you could change the time period (e.g. 1 day, 1 month, 1 year, etc.) to see how different segments of the market have preformed over the selected period. For some unknown reason this great quantitative feature is now replaced by non-quantitative, colored boxes. The following thread tried multiple times to get M* to comment on getting this lost feature back, but no comment by M* on whether this feature will come back:
Morningstar Market Barometer - Disappeared
http://socialize.morningstar.com/NewSocialize/forums/p/335947/3521963.aspx
This is how it looked before:
http://0.tqn.com/d/moneyover55/1/0/h/1/-/-/morningstar-index-market-map.png
This is how it looks now (the tiny 9 box, square image without % numbers):
http://www.morningstar.com/
If any of the members of this forum miss this great tool, please post a a comment on this thread. Hopefully M* will listen and bring the tool back.

FYI:
Regards,
Ted
IYJ: 1.23%
SPY: .90%
QQQ: .88%
IJH: .66%
PRHSX: .57%
PFF: .31%
FBTCX .05%

For The Love Of Ivy: The Mamas & Papas:

http://www.sec.gov/Archives/edgar/data/883622/000119312514101984/d693406d497.htm
497 1 d693406d497.htm IVY FUNDS SAI SUPPLEMENT DATED MARCH 17, 2014
Ivy Funds
Supplement dated March 17, 2014 to the
Ivy Funds Statement of Additional Information
dated July 31, 2013
and as supplemented October 3, 2013, November 21, 2013, November 25, 2013, January 2, 2014,
February 11, 2014 and February 24, 2014
Reorganization and Closure of Ivy Asset Strategy New Opportunities Fund
On March 17, 2014, Ivy Asset Strategy New Opportunities Fund merged into Ivy Emerging Markets Equity Fund (formerly, Ivy Pacific Opportunities Fund). The Ivy Asset Strategy New Opportunities Fund has been liquidated and has terminated operations as a management investment company.
Reorganization and Closure of Ivy Managed European/Pacific Fund
On March 17, 2014, Ivy Managed European/Pacific Fund merged into Ivy Managed International Opportunities Fund. The Ivy Managed European/Pacific Fund has been liquidated and has terminated operations as a management investment company.
The following replaces the twelfth paragraph of the “Investment Advisory and Other Services — Distribution Services” section on page 100:
Through July 31, 2014, for each of the Funds (except for Ivy Money Market Fund and Ivy Managed International Opportunities Fund), to the extent that the total annual ordinary fund operating expenses of the Class Y shares exceeds the total annual ordinary fund operating expenses of the Class A shares, IFDI and/or WISC have contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to ensure that the total annual ordinary fund operating expenses of the Class Y shares do not exceed the total annual ordinary fund operating expenses of the Class A shares, as calculated at the end of each month.
The following are added as the last paragraphs of the “Investment Advisory and Other Services – Distribution Services” section on page 100:
Through July 31, 2015, for Ivy Managed International Opportunities Fund, to the extent that the total annual ordinary fund operating expenses of the Class Y shares exceeds the total annual ordinary fund operating expenses of the Class A shares, IFDI and/or WISC have contractually agreed to reimburse sufficient 12b-1 and/or shareholder servicing fees to ensure that the total annual ordinary fund operating expenses of the Class Y shares do not exceed the total annual ordinary fund operating expenses of the Class A shares, as calculated at the end of each month. Prior to that date, the expense limitation may not be terminated by IFDI, WISC or the Board of Trustees.
Through July 31, 2016, for Ivy Managed International Opportunities Fund, IICO, IFDI and /or WISC have contractually agreed to reimburse sufficient management fees, 12b-1 fees and/or shareholder servicing fees to cap the total annual ordinary operating expenses, excluding acquired fund fees and expenses, for the Fund’s Class A shares at 0.49%, Class B shares at 1.40%, Class C shares at 1.29%, Class I shares at 0.16%, Class R shares at 0.72% and Class Y shares at 0.38%. Prior to that date, the expense limitation may not be terminated by IICO, IFDI, WISC or the Board of Trustees.
Supplement Statement of Additional Information 1

Hi Guys,
“Chance favors the prepared mind” is a famous truncation of a Louis Pasteur quote.
A few days ago I mentioned that my wife just purchased Max Gunther’s 1977 reissued “Luck Factor” book. The subtitle of the book is “Why some people are luckier than others and how you can become one of them”. That’s worth exploring.
Chance does indeed favor the prepared mind, but all successful people acknowledge that luck is an influential factor in all their careers. Final positive and negative results often pivot on unforeseen factors that ultimately tilt the outcome in one direction or the other.
The military likes to talk about force multipliers. In everyday happenings, luck is a force multiplier. Folks who have studied both lucky and unlucky people have concluded that a person’s luck quotient can be augmented. Gunther offers several personal attributes that can be sharpened and actions that can be practiced that could enhance one’s luck quotient.
Gunther identifies four Luck Adjustment elements: the Spiderweb structure, the Hunching skill, action Boldness, and the Ratchet effect.
When applied to investing, the Spiderweb structure is an expanded number of financial contacts with divergent knowledge and interpretations. The MFO website and its membership serve to satisfy this need with its complex network of folks who volunteer information and meaningful guidance.
The Hunching skill deals with accepting the fact that we know more than we can immediately recall to form a cogent decision. At the decisive moment we feel that some decision is warranted, but we can not cobble together a precise logic chain to support that decision. Our subconscious stores data at various locations that can not be instantaneously accessed, but it’s there based on earlier learning and experience. We have a vague and clouded memory of it, and it forms the basis of our feelings, the source of our Hunch. Gunther recommends taking action on that Hunch.
History demonstrates that boldness is frequently rewarded. The bold enthusiastically seize opportunity when it is presented. The lucky seem to be bold; the unlucky seem to be timid. However, intemperate boldness can lead to faulty decisions and disastrous outcomes. Gunther emphasizes that boldness must be coupled to avoiding rashness. The investor must do a balancing act in terms of the risk-reward tradeoffs.
An investor recognizes that outcomes are uncertain. Total prescience is an impossible criteria when making an investment decision. Here’s where a probabilistic grounding that uses statistical databases can improve an investor’s luck quotient. It is prudent to prepare a safety net to accommodate unexpected events and unhealthy investment payoffs. Gunther names this the Ratchet Effect. He recommends that investors should be willing to admit an investment error, and be prepared to sell at some predetermined loss, like 10 % or 15 %. Any investor should have sufficient financial reserves to easily sustain these relatively minor disruptions. Never invest with grocery money.
This summary of Gunther’s Luck Factors takes us full circle to Pasteur’s chance favors the informed mind aphorism. What constitutes an “informed mind” for profitable investing?
I admire the financial works of Bill Bernstein. He had at least a partial answer to that question in his 2010 book “The Investor’s Manifesto”. Bernstein argues that most investors are doomed to fail (underperform the markets) because they, with a small percentage excepted, do not possess the requisite abilities. What are these requisite abilities?
Bernstein lists four: (1) a dedicated and continuous interest in the investment process, (2) a little math horsepower that includes some limited statistical and probability capabilities, (3) a historical perspective starting with the South Sea bubble, and (4) an emotional discipline to stay the course with a carefully crafted plan. He claims that Wall Street is littered with the bones of folks who knew what to do, but failed to do it. Execution is mandatory.
Much of what Bernstein says in his Manifesto couples tightly to the findings that Max Gunther summarized decades earlier. Fortune does not smile equally on everyone, but the odds for that winning smile can be enhanced with preparation, patience, and persistence.
Here are a few quotes that I culled from Bernstein’s book that reinforce some of Gunther’s work on the subject.
"The goal is not to maximize the chances of getting rich, but rather to minimize the
odds of getting poor." That’s the control risk axiom.
"Very high returns are almost always made by those brave enough to invest when
the sky is blackest." It’s tough being a contrarian, but the payday is huge because of the regression-to-the-mean market pull.
"Nothing is as likely to destroy your financial future as your own emotions." This is a caution against the (mis)behavior biases.
And finally, a brutally frank condemnation:
"The average stock broker services his clients in the same way that Baby Face
Nelson serviced banks." Bernstein has surely earned the privilege to slam an industry, but the criticism is far too broad for my comfort zone. I pass on this one.
You might want to read both books. They are breezy and easily read. I enjoyed both volumes, but not surprisingly, I was more impressed with the Bernstein effort because it contained an abundance of historical and statistical data. Enjoy.
Best Regards.

Some nice YTD performance on a number of recent "buys" from this threads displayed in chart form:

and some here:

@Alex & Others: Here is the article.
Regards,
Ted
http://online.wsj.com/news/articles/SB10001424052702304680904579369112512612596#printMode

FWIW, I believe the 11 funds that are under consideration as TBTF are:
SPY - SPDR S&P 500 ETF
VTSMX - Vanguard Total Stock Market (all share classes combined, as are the others)
FDRXX - Fidelity Cash Reserves MMF
PTTRX - PIMCO Total Return
VINIX - Vanguard Institutional Index
VFINX - Vanguard 500
AGTHX - American Funds Growth Fund of America
AEGPX - American Funds EuroPacific Growth
VGTSX - Vanguard Total International Stock Index
FCNTX - Fidelity Contrafund
VBMFX - Vanguard Total Bond Market Index
The article says the fund companies are saying that because these are just vanilla funds that don't make extensive use of leverage, they can't be harmful to the financial system in times of stress.
I thought that the use of leverage and other "esoteric" instruments was precisely the difference PIMCO claimed between PTTRX and its ETF non-clone. Can't have it both ways - these are either similar funds or PTTRX is leveraging.
See, e.g. this 2009 Bloomberg article about PTTRX: "Such a portfolio [as quantified by M*] would be akin to a leveraged hedge fund's."
http://www.businessweek.com/magazine/content/09_48/b4157072840757.htm

I used to like Royce funds for small-value investments 10-15 years ago (late 90s to mid 2000s). Now they are just a mutual fund business that is putting their interest in gathering assets (an collecting fees) ahead of their shareholders' interest of delivering great returns at a reasonable cost. Just look at their fund offerings and see if you can easily figure out the differences between these funds: Select I, Select II, Enterprise Select, Value, Value Plus, Focus Value, etc.? Chuck Royce manages or co-manages 16 funds and Whitney George manages or co-manages 10 funds. The mutual funds returns in the past few years might be showing the changes that have taken place inside Royce in the past decade. I won't be putting my money in Royce funds anytime in foreseeable future.

Spot on.
That's why I'm drawn to David's mission of highlighting small, independently-owned shops that seek to add value. There are few fund families that I would trust to act as true fiduciaries. Royce used to be one of these; but with the Legg Mason takeover my impression is that the changes have been swift and broad; my trust has been decimated. How long before they have Dreifus managing 3 or 4 or 5 funds? Same with Zaino. No thanks, Royce. No more hiding behind Chuck's cashmere v-necks and bow tie; your Legg is showing.

Thank you all for the advice and suggestions so far. I sent an email with questions to both father and advisor and the advisor is waiting for Dad's permission to discuss it with me. This way I'll get answers in writing, but he seemed to think my questions (thanks to your collective help) were good.
@catch22 The advisor has already been hired and was before I started taking an interest in such things, and there's a 500k inheritance being sorted out at the moment and is partly why I'm both concerned about how its being handled and about switching horses mid-stream. (In other news my family members live forever).
I'll see if I can get a copy of the formal fee declaration and structure. My general inclination is to let the next few years play out to make sure things in his portfolio and other financial areas steady themselves out and then look to manage everything sans advisor. A post 9/11 unemployment phase left him doing some early drawdowns and he is still catching up.

A thought about going to Vanguard, Fidelity, whatever. They may be better in their recommendations; certainly they will be less pushy. But don't be lulled into thinking that they don't have their own (institutionally backed) biases as well.
Several years ago, I had my mother take advantage of Vanguard's free (for Voyager customers at the time, now you need to be Voyager Select) CFA financial plan. The guy did a very good, thorough job - spent a good amount of time talking with my mother, inventoried assets, talked about needs. Suggested asset allocation was appropriate, etc.
However, and not surprisingly, the suggested portfolio was all Vanguard funds. This made little sense IMHO for someone with a fair number of muni bonds. No reason to sell off that portfolio just to buy a muni bond fund, especially since transaction costs on bonds are prohibitive (bonds are often best viewed as B&H investments until they mature).
In addition, the LC blend recommendation was VFINX, at a time that Vanguard was touting how it worked with MSCI to get better indexes. (That difference was real, because of the use of buffer zones - S&P was the last to adopt these.) Vanguard had, and has VLCAX. (At the time, the price difference was just 1 basis pt.) While I did ask, I was never clear on the answer, and I guessed that it was the easier sale - everyone knows S&P 500.
Regarding Fidelity - their reps get compensated based on AUM, with higher rates for the more profitable products. Insurance products and Porfolio Advisory Services (PAS) being at the top of the list. Here's their FAQ on pricing and the detailed (13 p) pdf with details on representative's compensation.
On the plus side, they're not making this hard to find, and the incentives aren't large. On the negative side, this could explain why Fidelity kept urging me to suggest PAS to friends and family (not for me, though; Fidelity knows better than that).
Take all advice with a grain of salt.

Fascinating - Though I have no opinion on the plan's appropriateness or wisdom.
1. It's good for a "retiree" in the sense that keeping track of all these funds gives him plenty to do with all that spare time. :-)
2. Nice to see TEMWX there. For about 15 years it was my first & only fund. Damn good fund under Sir John back in the 70s and 80s.
3. Plan is quite a bit more aggressive than I''d want at this stage. We mostly keep to very diversified value oriented equity funds, lots of moderate allocation types, and a strong dose of cash or intermediate bonds.
4 Agree with letting it grow for several years in retirement before tapping.