FYI: U.S. stocks edged higher on Monday as financial shares recovered from last week’s losses and higher oil prices lifted energy shares.
Regards,
Ted
Bloomberg:
https://www.bloomberg.com/news/articles/2017-10-15/stocks-in-asia-to-gain-as-u-s-inflation-slows-markets-wrap
Reuters:
http://www.reuters.com/article/us-usa-stocks/wall-street-higher-as-bank-stocks-rebound-apple-gains-idUSKBN1CL1EX
MarketWatch:
http://www.marketwatch.com/story/dow-poised-for-fresh-high-in-muted-trading-as-investors-brace-for-week-of-earnings-2017-10-16/print
IBD:
http://www.investors.com/market-trend/stock-market-today/indexes-close-at-new-highs-dow-eyes-23000-as-six-blue-chips-rally/
CNBC:
https://www.cnbc.com/2017/10/16/us-stocks-earnings-netflix-trump.html
AP:
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
Bloomberg Evening Briefing:
https://www.bloomberg.com//news/articles/2017-10-16/your-evening-briefing
WSJ: Markets At A Glance:
http://markets.wsj.com/us
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures: Positive
https://finviz.com/futures.ashx

@Maurice: Just for you, and that 23,000 milestone !
Regards,
Ted
Dow milestones 1st close above that level Dow final close No. of trading days to milestone (ranking)
23,000 ? N/A ?
22,000 Aug. 2, 2017 22,016.24 107
21,000 March 1, 2017 21,115.55 24 (1)
20,000 Jan. 25, 2017 20,068.51 42 (2)
19,000 Nov. 22, 2016 19,023.87 483
18,000 Dec. 23, 2014 18,024.17 120
17,000 July 3, 2014 17,068.26 153
16,000 Nov. 21, 2013 16,009.99 139
15,000 May 7, 2013 15,056.20 1,460
14,000 July 19, 2007 14,000.41 59 (3)
13,000 March 25, 2007 13,089.89 127
12,000 Oct. 19, 2006 12,011.73 1,879
11,000 May 3, 1999 11,014.69 24 (1)
10,000 March 29, 1999 10,006.78 246
9,000 April 6, 1998 9.033.23 182
8,000 July 16, 1997 8,038.88 105
7,000 Feb. 13, 1997 7,022.44 85
6,000 Oct. 14, 1996 6,010 226
5,000 Nov. 21, 1995 5,023.55 189
4,000 Feb. 23, 1995 4,003.33 975
3,000 March 17, 1991 3,004.46 1,080
2,000 Jan. 8, 1987 2,002.25 3,573
1,000 Nov. 14, 1972 1,003.16 21,652
Source: WSJ Data:

@bee "10 and longer funds" You should own a tech and healthcare fund.
Regards,
Ted

Hi @bee,
In enjoyed reading your plan to position your portfolio. One of the things that I did not pick up on in my reading of your plan was how much you plan (percent wise) to have allocated to each area? Perhaps, you plan for even distribution at 20% each? Not sure what your 10 year cash draw needs are? And, do you plan to exhaust each area as their period comes to pass?
I'm thinking ... Your 1 to 3 year funds could consist of short term bond funds. Your 3 to 5 year area could consist of conserative allocation funds or multi sector bond funds or perhaps a mix of both. Your 5 to 7 year area could consist of moderate allocation funds along with some world allocation funds. Your 7 to 9 year area could consist of aggressive allocation funds. And, your 10+ year area could consist of all equity funds consisting of a mix of both domestic and world equity funds.
For me ... I have four areas of investments within my master portfolio. It consist of a cash area, an income area, a growth and income area and a growth area. I have percent ranges set for each area and strive to keep each area somewhere close to their neutral positions unless I have choosen to overweight/underweight an area.
When, I need cash I pull from the demand cash sleeve within the cash area while all of the other sleeves (for the most part) are set to feed the demand cash sleeve thus keeping it with an ample supply of cash to meet distributions.
Just wondering what your thinking is when it comes to drawdown since you are apparently in the distribution mode of investing much like myself? Percent wise what do you target for an annual distribution?
Old_Skeet

FYI: The Financial Industry Regulatory Authority on Monday ordered Wells Fargo & Co.’s (WFC.N) clearing services and Wells Fargo Advisors Financial Network to pay customers $3.4 million in restitution for sales practice issues related to unsuitable recommendations of certain investment products.
Regards,
Ted
http://www.reuters.com/article/us-wells-fargo-finra-fine/finra-orders-wells-fargo-to-pay-clients-3-4-million-over-sales-practice-issues-idUSKBN1CL230

One strategy that I have attempted to include as part of my portfolio review and yearly reallocation is to use "allocation funds" as the destination for other funds that need paring back. I consider these allocation funds as having attributes that served my goals well when I started investing and I now see them as serving a different goal in retirement.
I began my investing (call this my 30's) by first owning well diversified allocation funds such as VGSTX, OAKBX, VWINX, VWELX, DODBX, PRPFX, PRWCX, and others. These funds provided me with a way to funnel small contributions into one or a few of these funds based mainly on their availability to my workplace retirement plan. It exposed "my meager, but dear savings" into what I consider a long term well managed (hopefully), well diversified investment. These funds often had a history of good risk / reward, solid management, were reasonably priced (low ER ratio) and made "staying the course" pretty certain.
As my savings increased and my knowledge base grew (call it my 40-50's) I began realizing that I could create my own personal portfolio allocation using not only these funds, but a combination of "non-equity" funds (Bonds, RE, Commodities) and equity funds that had an "alpha/growth" strategy (sector, size, class, valuation, manager, etc.). These "fund combos" provided me with the biggest momentary losses and the largest momentary gains, but in the end have kept me up at night more often than the allocation funds I also still owned.
I began to discipline myself to trust my fund choices to "stay the course" and use these momentary ups and downs in the market to reallocate between the "non-equity" portion and the "equity" portion of these investments, but as I reach my 60's, 70's and beyond I see myself developing a third approach.
I see some of my low risk / low return "non-equity" funds along with some very conservation allocation funds as serving a roll in holding a portion of my portfolio for short term needs. (1-3 year, call these PONDX, PTIAX, CBUZX) for distributions of income, RMD, emergencies and retirement "fun".
I see the higher risk / higher reward "non-equity" funds along with the higher risk / higher reward "equity" funds as serving a roll in maintaining long term growth. (10 years and longer), and I'll place my stallions here (POAGX, VGHCX, FSRPX, etc). Note to self: "I have too many of these..."
I see my conservative, moderate & aggressive allocation funds as having a larger and key place in my retirement portfolio as the core of my holdings will occupy this space. These are investments have a (3-9 year) holding period that provide good portfolio diversification as well as "growth and income" to reallocate and "feed" ongoing (1-3 years) needs.
The Conservative Allocation fund (3-5 year) needs in VWINX, GLRBX or CBUZX.
The Moderate Allocation fund (5-7 year) needs in JABAX or OAKBX.
The Aggressive Allocation fund (7-9 year) in PRWCX or BTBFX).
Each of these allocation funds will periodically "feed" the 1-3 year funds over time.
Each of the long term funds (10 years or more) "feed" the allocation funds.
Hopefully there will be enough "feed" to go around.
If you have any thought on this approach or suggestions for potential candidates for:
1-3 year funds -
3-5 year funds -
5-7 year funds -
7-9 year funds -
10 and longer funds -
I'd appreciate it.

DLEUX is only about 10 months old. Is not doing anything really special to stand out against its benchmark. IShares IEUR is doing just slightly better at this point.

@claimui, DSENX/DSEEX outpaced PIDIX/PXTIX every year since inception in 2014. Also the expense ratio is lower as well. What is your opinion on the European version, DLEUX, of DSENX/DSEEX that was launched two years ago?

And his "market timing" fund where he puts his opinions into action:
HSGFX:
1y= -17
3y= -12
5y= -10
10y= -7

FYI: Billionaire investor Warren Buffett made a lot of people feel better about historically stretched stock prices earlier this month.
Speaking in an interview with CNBC on October 3, the chairman and CEO of Berkshire Hathaway said, "Valuations make sense with interest rates where they are."
Regards,
Ted
http://www.businessinsider.com/stock-market-news-could-be-headed-for-one-of-worst-disasters-in-history-2017-10
BRK.A: Return: %
!yr. 30.83
3yr.11.08
5yr.10.21
10yr.8.25
HSTRX: Return: %
1yr.0.03
3yr.2.60
5yr.0.54
10yr.3.19

FYI: Fifty eight percent of CRSP common stocks have lifetime holding period returns less than those on one-month Treasuries. The modal lifetime return is -100%. When stated in terms of lifetime dollar wealth creation, the entire net gain in the U.S. stock market since 1926 is attributable to the best-performing four percent of listed stocks, as the other ninety six percent collectively matched one-month Treasury bills. These results highlight the important role of positive skewness in the cross-sectional distribution of stock returns. The skewness arises both because monthly returns are positively skewed and because compounding returns induces skewness. The results help to explain why active strategies, which tend to be poorly diversified, most often underperform.
Regards,
Ted
https://alphaarchitect.com/2017/10/06/reconciling-individual-stock-returns-and-factor-portfolio-returns/

Howdy folks,
So the forward earnings game is still own. Folks, the earning numbers that the press reports are top line estimates. The real number (from my perspective) is "as reported" or TTM and this is what companies actually take to the bottom line. For full year 2017 TTM is estimated at $114.90 as of 09/29/2017 by S&P. Full year 2017 top line forward estimates were in the $135.00 range not long ago. It sure is real confusing these earnings numbers and that is why Old_Skeet uses a blended number of forward estimates in conjunction with TTM. The number I am using in the barometer is $122.50 through 3rd quarter and $125.00 for 4th quarter ending.
Let's see, 20 X $122.50 = 2450. For me 2450 is the fair value number for the S&P 500 Index as we closed out the 3rd quarter by my mytholodgy. And, 2500 would be the fair value number for 4th quarter ending. With this, the earnings feed in the barometer indicates for the S&P 500 Index is currently at a 2.2% premium. Please know, there are other feeds used in the barometer beside earnings to produce its current reading of 135 which indicates that the Index is currently trading at about a ten percent premium putting it currently at the top of the overvalued scale. Next upward stop is overbought. In addition, to the earnings feed there is a breadth feed and a technical score feed which is also derived from a blended numbers coming from the RSI and MFI technicals. The breadth feed comes from the number of stocks in the Index that are above their 200 moving average. Then there is a short interest feed that has not been spoken much about until now.
In short words, the higher short interest moves the higher the barometer reading moves. Since short interest is currently at about 2.8 days to cover the barometer reading is currently a little higher than it normally would be without this feed.
Old_Skeet's market barometer is a neat way for me to measure the Index because it blends many inputs into a single reading that has been scaled.
In my book ... Stocks are Currently Richly Priced! And, with this, have outpaced earnings.
And, so-it-goes.

FYI: A slowdown in corporate earnings growth is particularly worrisome to skeptics of the stock market’s relentless rise to record after record this year.
Regards,
Ted
http://www.denverpost.com/2017/10/12/here-comes-earnings-season/

On the equity front: May add a tad to certain REITS (VTR). Possibly also small positions in GE & GIS (TBD). Just re-entered small position in AMZN and a position in UTG on the price-weakness surrounding the rights-offering. Bought a small, starter position GBTC (the bitcoin trust) --as a pure speculation. Will pyramid up this position if it moves my way. In the event of a selloff in WTI/energy space, will add to my positions in MMP and EPD, as they remain "high-conviction" (assuming one doesn't overpay).
On the bond/bond fund side: Avoiding major new commitments here, until we get some price weaknesses (or until I need the income). Sold a l/t position in DLTNX in my taxable account. -- to generate a meager tax-loss. Redeployed proceeds to SEMPX.
Bond CEFs are 'off the table' for me here.
Cash/cash-management: Dumped majority of taxable & IRA positions in my l/t holding ACVVX - a market-neutral OEF -- decided to de-fund the position in the event they declare a year-end disty. Used/using/will use proceeds to increase my T-bill ladder, as s/t rates continue to edge higher (6-month T-bill now at ~ 1.25%). Also, after an entirely UNSATISFACTORY discussion with my Wells Fargo brokerage rep about ways to generate a bit of yield on my cash there, I de-funded my taxable Wells Fargo brokerage account, and swept the cash to an internet bank paying +1% . Dealing with the Big 4 banks remains a truly painful/aggravating experience.

Here is the 10/10/17 prospectus link for both funds (funds are still not available as of this writing):
https://www.sec.gov/Archives/edgar/data/52848/000093247117005432/worldfunds485bmerged.htm

I recently received a written reminder from one of my IRA custodians that they apparently mailed all their clients. (I think it came from Oakmark.) The abandonment laws vary by state.
Their advice was to either (1) phone them once a year or (2) login to your account online once a year. Since I login to all my accounts at least once a year, I let it go at that. I think it’s a good practice to change passwords once or twice a year. And doing so ought to satisfy anyone looking on that you’re still alive.

As I recall, you're in Michigan. I don't know whether all states follow this rule, but in Michigan, its three year clock doesn't begin running until you're 70.5:

An IRA (Individual Retirement Account) account, Keogh plan, or 401K plan becomes distributable under the terms of the account or plan [i.e. RMDs for the IRA]. If the plan or account requires a distribution at a certain point in time, then the three-year dormancy period begins at that point.

https://www.michigan.gov/documents/2013i_2598_7.pdf
I don't know any state that has law that property escheats in less than three years, though some financial institutions may be obnoxious and freeze your account after a year of inactivity. (I made an old post somewhere about WF doing this, and making a lot of errors along the way.) So it's still a good idea to check in yearly.

Can't find the post where someone interestingly pointed out what happens w/ DSEEX / DSENX when US LCV persistently lags (a bit), but graphs are here (I added div etfs for the heck of it):
2y
http://quotes.morningstar.com/chart/fund/chart.action?t=DSEEX&region=usa&culture=en-US&dataParams={"zoomKey":11,"version":"US","showNav":true,"defaultShowName":"name","mainSettingId":"main","navSettingId":"nav","benchmarkSettingId":"benchmark","sliderBgSettingId":"sliderBg","volumeSettingId":"volume","defaultBenchmark":false,"id":"F00000QBBZ|F00000MVE2|FEUSA04AF8|FEUSA04ABY|F00000Q6JF|FEUSA04AEW|F00000OVWX|FEUSA00001","type":"FO|FE|FE|FE|FE|FE|FE|FE","region":"USA","name":"XNAS:DSEEX|ARCX:SCHD|ARCX:VIG|ARCX:DVY|ARCX:NOBL|ARCX:RPG|ARCX:CAPE|ARCX:SPY","baseCurrency":"USD","defaultBenchmarks":["",""],"chartType":"growth","startDay":"10/14/2015","endDay":"10/14/2017","chartWidth":955,"SMA":[]}
and 1y, with RPG and SPY pulling even or outperforming (I know RPG is equal weighting):
http://quotes.morningstar.com/chart/fund/chart.action?t=DSEEX&region=usa&culture=en-US&dataParams={"zoomKey":6,"version":"US","showNav":true,"defaultShowName":"name","mainSettingId":"main","navSettingId":"nav","benchmarkSettingId":"benchmark","sliderBgSettingId":"sliderBg","volumeSettingId":"volume","defaultBenchmark":false,"id":"F00000QBBZ|F00000MVE2|FEUSA04AF8|FEUSA04ABY|F00000Q6JF|FEUSA04AEW|F00000OVWX|FEUSA00001","type":"FO|FE|FE|FE|FE|FE|FE|FE","region":"USA","name":"XNAS:DSEEX|ARCX:SCHD|ARCX:VIG|ARCX:DVY|ARCX:NOBL|ARCX:RPG|ARCX:CAPE|ARCX:SPY","baseCurrency":"USD","defaultBenchmarks":["",""],"chartType":"growth","startDay":"10/14/2016","endDay":"10/14/2017","chartWidth":955,"SMA":[]}

FYI: ( With yesterday close of 2553, the S&P 500 index is 53 points higher than the most optimist forecasts at the beginning of 2017 according to Bloomberg.)
How strong is the uptrend in the U.S. stock market? So strong that, according to one analyst, it would take divine intervention to stop it.
“From a purely technical point of view, if a bear market is born this month it would have to be considered the result of some sort of ‘immaculate conception,’” wrote Doug Ramsey, chief investment officer of the Leuthold Group.
Regards,
Ted
http://www.marketwatch.com/story/it-would-take-an-immaculate-conception-to-create-bear-market-in-stocks-right-now-analyst-2017-10-13/print
Bloomberg Article:
https://www.bloomberg.com/news/articles/2017-10-13/even-bulls-getting-left-in-dust-as-s-p-500-climbs-for-fifth-week

Thanks Ol’Skeet and others.
As of their June 30 report, Dodge & Cox was “trimming” financials just a bit after being hot on them for several years. Their reasoning is that relative valuations have now moved up. They also referenced becoming slightly overweight energy. I’d caution that these guys are deep value investors. Their ideas don’t always pan out. And the ones that do work usually take months or years to materialize.
https://www.dodgeandcox.com/pdf/shareholder_reports/dc_stock_semi_annual_report.pdf
Caveats:
- - A 3 months old report may not belong on this thread.
- - However, neither interest rates nor energy prices have changed much in those 3 months.
- - D&C (domestically) is having an uncharacteristically poor year.
Personally, I’m not seeing anything that looks attractive relative to risk / reward. I remain invested, but at the high end of my allowable cash position. I watch, read and listen a lot. Many managers appear “positive” on equities only because they are comparatively better priced than bonds. If I should uncover any opportunities to turn a dollar without undue risk I’ll (1) invest in it first and than (2) note that on the board.
Regards

Hello,
I was wanting to make Old_Skeet's market barometer a monthly comment feature on the board; however, I am finding, thus far, some things of weekly interest to make comment on. This past week saw the S&P 500 Index advance about +0.1% and end the week with a barometer reading of 135 putting it towards the top part of overvaluation on the barometer scale and close to an overbought reading. The barometer is indicating that staples (XLP), healthcare (XLV) and utilities (XLU) currently offer the best value form a technical score perspective. It is also interesting that staples and utilities were up 1.4% and 1.35% respectively for the week and were two of the three best performing major sectors of the 500 Index with the third being real estate (XLRE) which was up 1.9%. This week also saw earning season begin so perhaps investors were seeking cover in the traditional defensive sectors.
In listening to some of the talking heads onTV this past week many are favoring financials from a longer term outlook and in a rising interest rate environment. It is interesting that financials (XLF) was down 0.83% for the week as earnings season began with major banks reporting.
In addition, Morningstar's Market Valuation Graph indicates that stocks, in general, are currently at a premium now being about four to five percent overvalued.
With this, it seems, to me from review of my barometer data feeds, money sought out value this past week over growth and foreign over domestic.
I remain in the cash build mode within my mutual fund portfolio due to a richly priced market. According to my equity weighting matrix, which is driven by my market barometer, and used to help set my allocation in equities within my mutual fund portfolio I am now overweight equities by six percent according to the matrix. However, due to a seasonal trend calendar, I have chosen to remain overweight equities over what the matrix is currently calling for. Generally, I load equities in the fall through winter and maintain an overweight position in them through the winter months; and, come spring I usually rebalance and return to a more neutral weighting position within my asset allocation through the summer months. Come late summer I repeat the process and again begin to rebalalnce and load equities taking into account my equity weighting matrix reading. This past spring when I rebalanced and reduced by equity weighting I used the sell proceeds to move, over time, into some good yielding hybrid funds over the summer where prices are generally more favorable. This has, thus far, proved to be a good strategy move because there has been some good capital appreciation on the hybrids I purchased plus I have increased my mutual fund portfolio's yield by about ten percent along the way through this process as well.
Currently, I have six funds on my shopping list to add to them when better valuations can be had. With this, I remain in my current cash building mode while I await the next stock market pullback. I call this investment and rebalance process throttling my asset allocation of which my barometer and equity weighting matrix as well as the calendar are key drivers in helping me determine my portfolio's equity weighting and positioning.
So, is investing considered an art, or is it a science? I'm thinking, it is some of both.
Have a good weekend ... and, thanks for stopping by and reading.
Old_Skeet