Okay, for all valleys from mid-2015 on to the present, the performance and tracking of DSENX are as above: usually better than CAPE, a little, occasionally worse, a little, while always the same as or better than SP500. EXCEPT for October and November of last year, when performance consistently was marginally worse than CAPE and also worse than or equal to SP500.
All of this investigation is of growth of $10k.

It's 55% of my entire investment net.
To some degree I understand on paper what it does. What I am still trying to get my mind around are worst-case scenarios and how it would compare with some combo of conventional LV and broad bonds. The leverage explanations are interesting but the msf conclusion
>> think this as a 2x leveraged fund.
and the downside capture ratios that M* lists are confusing to me in terms of its actual performance.
I have begun analysis of every 2-week or longer dip since inception as compared w/ CAPE and w/ SP500. I am through 2014 and into the beginning of 2015, with the more recent years tk.
Thus far all that I see, from a sample of seven such dips, is as follows:
- no delta to speak of, though leveler (smoother) performance than SP500
- smooth outperformance, small, marginal
- smooth underperformance, small, marginal (only one of these valleys thus far)
- first one and then the other, smooth underperformance followed by smooth outperformance, with the result, at the end of the recovery point, higher than CAPE, which is higher than SP500.
Now, since its inception, 4.5y ago, it is true that we have not had long or deep dips ("drawdowns"), so this investigation of mine may not speak to what one can comparatively anticipate in a plummet of length. But thus far I see no increase in volatility, and depth or speed of drop (insofar as one can tell from M* data).
Maybe it would be the case that during a bad set of months and years it would be better to hold TWEIX [or insert your favored broad index here] with some mysterious bond portion.
But I ain't seein' it, and thus far I ain't finding it either.
Will report further results later, for dips the last two years.

Matt, I think that you're on the right track with your rule of thumb. You may remember this prior discussion, which might help:
http://www.mutualfundobserver.com/discuss/discussion/29411/how-many-funds-do-you-own

Thanks guys for your thoughts!
DavidV, I, like Mike, was not trying to define a "core" holding as a "style (i.e. blend)" but more as a percentage of your portfolio and conviction. I certainly understand and appreciate your comment.
What I was really asking, is this fund worth 15%-20% of your portfolio and a long-term position?
I have been trying to condense my holdings and take larger stakes in them; my rule-of-thumb (pardon the cliche') is no more than 15%-20% in a given fund and no less than 5%.
Currently I have almost 8% in DSEEX and I am trying to get some thoughts and opinions from more seasoned investors on this forum.
Any further thoughts, opinions or suggestions are very welcome!!!
Thanks,
Matt

I think that weed related companies will be a huge investment opportunity in the not too distant future, but we're not there yet. Once Canada legalizes recreational weed next year, then the investing door will open a bit wider. Right now weed investing is kinda like the internet in 1992 i.e. everyone knows it's coming, but just not yet.
Most weed related stocks are OTC and therefore not worth investing in imho.

More from Ms. Appleby at Investopedia:
http://www.investopedia.com/university/retirementplans/rothira/rothira3.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186

Thanks @Ted,
Some additional notes I have been accumulating regarding Roth IRA's mostly from Ed Slott"s Discussion Forum here:
Discussion Forum:
Understanding Roth IRA Inheritance:
Q: If my spouse passed away and I transfer his ROTH IRA into my own new ROTH. Does a new 5 year window start. If I then pass away 1 year later how are my Beneficiaries treated and what options do they have?

This is a confusing topic because you can either continue as beneficiary, or assume ownership and roll into your own Roth IRA. The best decision depends on your age, the age of the Roth, and how much money you need from it before you reach 59.5.
If you assume ownership of the inherited Roth, you are treated as if you were the owner from Day 1. The 5 year holding period starts in the year your spouse first contributed, but then you must also be 59.5 before your distributions are qualified. If you already had your own Roth IRA, you could combine the Roths and the 5 year holding period is treated as starting with the first contribution either one of you made.
If you then pass, your beneficiaries continue to treat the holding period as starting the same time your holding period started. But they do not have to wait until 59.5 as that non spouse inherited Roth would be fully qualified after 5 years starting with your holding period. However, your non spouse beneficiaries will have annual RMDs and if they create separate inherited Roth IRA accounts before the end of the year following the year of your death, they can each use their own age to calculate the RMDs.

also, the order of Roth IRA withdrawals:

Your balance in regular Roth contributions can be withdrawn tax and penalty free any time. After all your regular contributions have been withdrawn, additional distributions must come from your conversions, oldest conversions first. If you get to conversions less than 5 years old, you owe the 10% recapture tax on the taxable portion of those conversions. Earnings come out last. To properly report any of these distributions on Form 8606, you must have kept track of your regular and conversion balances.

finally, a good strategy for Roth Conversions:

Having a separate account for each conversion makes the recharacterization process simpler, but if you is going to invest the accounts in the same investments, it is probably not worth the trouble. The number of accounts is not a factor for taxation of withdrawals since for those purposes all Roths are treated as one combined account regardless. All Roths are fully qualified and tax free after 5 years from the first contribution and age 59.5. But before the Roths are qualified, there is a 5 year holding requirement for each conversion that will end when one reaches 59.5, if 59.5 comes sooner. If one withdraws conversion money before 5 years or 59.5, he/she will owe a 10% penalty on the conversions withdrawn. Roth IRA ordering rules apply with respect to which portion of the Roth comes out first. If one is already 59.5, the conversion 5 year holding period does not apply, but 5 years must still pass before any earnings will be tax free.

FYI: (Never thought I's see the day when this would happen, Oh Well ! only in America)
he Bloomberg Intelligence Global Cannabis Competitive Peers Index—an equally weighted index of 54 stocks with significant exposure to cannabis-related operations—tripled since the start of 2015
Regards,
Ted
https://www.bloomberg.com/graphics/2017-weed-index/

FYI: (Believe it or not, if he would have run, the Linkster would have voted for him.)
So far, Bloomberg has given away $5B to causes that often dovetail with his political interests, like gun control and the environment. The ex-mayor of NYC would have bankrolled a 2016 presidential campaign if he thought he had a “reasonable chance” of getting elected. Who would have been his running mate? Retired Navy Adm. Mike Mullen, say aides.
Regards,
Ted
http://ritholtz.com/2017/04/bloomberg-60-minutes/

FYI: (Click On Article Title At Top Of Google Search)
Distrust between school districts and unions, as well as potential financial incentives, factor into lack of reform.
Regards,
Ted
https://www.google.com/#q=In+K-12+403(b)+plans,+employees+and+their+unions+can+be+their+own+worst+enemy

FYI: U.S. stocks were set to rip higher on Monday, as perceived haven assets gold and the yen fell, after a first-round win for centrist Emmanuel Macron averted fears of a euroskeptic-only final runoff in the French presidential election.
Regards,
Ted
U.S.:
http://www.marketwatch.com/story/us-stocks-poised-to-rally-as-investors-breathe-sigh-of-relief-over-french-vote-2017-04-24/print
Europe:
http://www.marketwatch.com/story/french-stocks-head-for-2-year-high-after-macron-win-eases-frexit-fears-2017-04-24/print
Asia:
http://www.marketwatch.com/story/asian-markets-rally-after-french-election-results-2017-04-23/print
Current Futures: Very Positive
http://finviz.com/futures.ashx

Well, the French have spoken in round one of their elections. Is this the reason for some of the happy areas of the futures world? Wait, no; tis cause a tax plan is in place for the very, really big and great announcement on Wednesday. Nah. Dismiss this statement as fake news from me. Don't bet the farm just yet, eh?
https://www.washingtonpost.com/news/worldviews/wp/2017/04/23/this-chart-shows-how-the-french-election-is-a-break-from-the-past/?utm_term=.08df83e95dc6
http://finviz.com/futures.ashx
Pillow time at this place. Can't do these 12 hour hard work days anymore.
Catch

Assuming that Doubleline bond funds behave similarly to DODIX (far from a sure bet, they're more like black boxes), the difference between a 50/50 combo of TWEIX (or CAPE) and DODIX would be due primarily to leverage.
Effectively, $100 of DSENX buys you the movement of $100 of TWEIX and $100 of movement in DODIX. So when both are doing well, you add the two and do better. (BTW, I tried combining CAPE and various Doubleline bond funds to find a Doubleline bond fund that approximated the bond portion of DSENX, but none matched well on a year by year basis).
Likewise, when both TWEIX and DODIX are doing poorly, you add their returns and that's more or less what you'd expect to get from this fund. Suppose TWEIX dropped 20% and DODIX dropped 10%. Your $100 investment in DESNX would move like $100 in TWEIX (dropping $20) and also move like $100 in DODIX (dropping $10).
Because of 100% exposure to each of the funds (thanks to leverage) you'd lose $30, or 30% of your investment. 20% (TWEIX) + 10% (DODIX). If it helps, just think this as a 2x leveraged fund.
Of course there's always slop when leveraging, and the exposure is only up to 100% on the equity and fixed income sides. So this is just a crude approximation. But I think it shows how this fund can amplify simultaneous drops in equity and fixed income.
What you hope is that equity and bonds are out of sync, so that you get some protection. Since equity and bonds are closer to uncorrelated than negatively correlated, sometimes you get that protection, sometimes you don't.

You will find a lot of differing opinions on what is a "core" holding. What is your definition? Personally I don't pay much attention to the word core. DSENX is ~15% of my self managed portfolio FWIW.

The article lauds PRMTX's 15 year performance, but PRGTX has handily beaten its YTD, 1 yr, 3 yr, 5 yr, and 10 yr annualized performances. That's as of 3/31/17 and per page 36 of Morningstar FundInvestor, April 2017 issue.

The title of the article is eye catching, but I fear there's more to it than the article seeks to address. I've always asked the question of indexers: how do you create your asset allocation? Do you just merely grab an S&P 500 index or Total market fund and call it a day? If yes, doesn't this ignore the fact that overtime Value beats growth, Small beats large. Also, I believe the number one mistake made by investors is buying at the wrong time (top) and selling at the wrong time (bottom). If you start out with an index fund, you may begin with a beta/alpha of 1 (before adding satellite funds). When things are screaming upward (as they have since 2009), you'll feel rather good about your brilliance. But, I imagine that when we have the next correction, the indexers will not ride it out. I imagine they'll repeat the same pattern of behavior. Not saying that low beta investors are necessarily smarter. I just believe there's less incentive to do something stupid.

Hi @Old_Skeet
As to my write, I was curious about various bond related returns during the May-Nov period over the past 9 years, which looked back to the major market melt period. In retrospect, I could have included 2007; as this was the beginning of the erratic equity markets in the late fall of this year.
Realizing there is data that somewhat supports the sell in May theory over a long time frame, I have never used this method to sell or buy either equity or bond positions.
Lastly, as I noted; sell and buy trigger methods used by an investor will likely be modified, at least in part, as to whether the investments are within a tax deferred portfolio. All of our portfolio is tax deferred accounts, so current taxation does not become a consideration with sells or buys.
Hi @Maurice
You noted: "But rotating bond and stock funds every 6 months wouldn't work for me."
>>> I agree. A May equity sell and buy again in November would only function and have value for our house if other factors were present: two being political and/or technical aspects related to particular sectors we may have in our portfolio. One might have a particular investment that has been held for "x" time and has produced a decent profit margin; but is now discovered to move sideways in price for a period of time that gets one's attention. For indicators as these, I/we at this house need to ask "why" questions. Has this sector run its course and is nothing more than the victim of profit taking as monies move elsewhere? Are there real reasons for this pricing change that are related to problems in this sector; or related to real time or potential political actions. I have not checked, but will assume that an example could be the real estate sector and related problem areas. One may own a REIT 1 fund that has held onto investments in the "mall" sector too long; while another REIT 2 fund may have moved away from that sector and had invested more, say; into the apartment sector or spaces leased by the healthcare sector. If the "mall" real estate sector falls on its face and there is continued demand for apartment space and leased healthcare facility related, one might assume better performance from fund 2, eh?
These are some of the factors that may take place to cause us to sell a particular investment area and move to another; but not necessarily linked to either the month of May or November.
The above could as well be directed towards the overall equity or bond market and their particular sectors, too.
We do pay attention on a weekly basis, at this time, to watch the price travel of sectors here and international.
Hi @hank
Bonds of various flavors may find interesting roads to travel depending upon French election results in May and any other funny business in this country.
Regards,
Catch

>> in each case in an amount potentially up to the value of the Fund’s assets.
>> ... You have to state ... that you can afford losing 100% of your investment, etc.

Can you describe a scenario where this would happen but TWEIX plus DODIX (say) do not decline similarly precipitously? That's a key question in my mind.

Hi Guys,
That's really an eye-catching title. It is sure to win a wide readership. It did exactly that with me.
Many techniques and schemes exist to beat Index returns. However, overtime, most of them fail. One favorite method is to use market timing signals, but market " timer's Hall of Fame is an empty room." That is a quote from financial author Jane Bryant Quinn. It is an accurate summary of an industry that hasn't deliver on its promises.
If Ted posted this reference earlier I apologize for this repeat. But I just discovered it, and it summarizes much actionable historical data in a few well constructed thoughts. I hope you visit this Link:
https://www.forbes.com/sites/trangho/2017/04/12/how-to-beat-90-of-mutual-fund-managers-in-the-long-run/#211dc2074257
So most active fund managers don't score well when contrasted against their Index targets. That's not a shocking outcome. In fact, given the expenses of doing that task just about guarantees that shortfall conclusion. Indeed, most will and do fail.
A 90% headwind is a tough challenge for me also. I suspect it is equally difficult for most MFOers. The bottom line is that most of us would do better in the investment universe if we simply defaulted into Index products rather than trying to outdistance the Indices. Our failure rates are just much too high in terms of the returns shortfalls and the time we commit to this losing game. Of course, exceptions exist and some of those rare exceptions post here (or are they miscalculating or misrepresenting their results?).
Enjoy the article.
Best Regards

I tend to agree with MikeM that the "black box" thesis is overblown, though with different details.
If you look at DSENX's portfolio, it has full exposure to the Schiller CAPE US sector index by buying total return equity swaps on the index. If you're spooked by all derivatives (including options like covered calls), then by all means stay away. As far as derivatives go, equity swaps seem pretty tame, especially as the counterparty can hedge away the equity risk on its side.
Basically, DSENX pays Barclays and BNP Paribas (two huge investment banks) a large enough cash stream to cover the cost of borrowing money to buy the index equities (should they choose to hedge). The banks can make a profit on their ability to actually raise that money at lower cost, on lending the securities, etc. In exchange for that cash stream, these banks pay DSENX the total return on those equities. (If the portfolio loses money, DSENX has to cover the loss). Alternatively, the banks can use this to reduce their exposure to equities they already have in their portfolio, while simultaneously pocketing that cash stream.
Pretty basic stuff as far as derivatives go. Since DSENX has to put up virtually $0 cash for its equity exposure, it can simultaneously be 100% long in bonds. It uses some of the fixed income to pay the cash stream to the banks, and holds the rest as profits for the fund's investors.
Therein lie the risks. The first risk is in the fact that this is a highly leveraged fund. Not in the traditional sense of investing, say 150% in the market by borrowing, but by investing 100% in equities and 100% in bonds. The prospectus even says this, emphatically (in italics) and explicitly:
The Fund uses investment leverage in seeking to provide both the Index return and the return on a portfolio of debt securities; it is likely that the Fund will have simultaneous exposures both to the Index and to debt securities, in each case in an amount potentially up to the value of the Fund’s assets.
Fidelity recognizes this, going so far as to require you to sign a declaration form before it allows you to invest in DSENX. You have to state that you're a sophisticated investor, that you know what you're doing, that you can afford losing 100% of your investment, etc.
The second risk is with Doubleline's style of bond investing. IMHO that's where the black box is. I can't tell you what's going on in their bond funds any more than I can tell you what PIMCO is doing. If you want to trust Gundlach with bonds that's fine, you're buying into his black box.
What I normally expect from this kind of strategy is 100% exposure to the index being tracked, plus a small alpha from a conservatively managed bond portfolio. But what this fund is doing is investing aggressively on the bond side. Hence the outsized returns since inception, a period when both equities and bonds have done well.
Unfortunately, if you buy into the CAPE sector index thesis, there's not a "safe" vehicle to get exposure. You've got this fund which has the risks above, and you have CAPE, which as an ETN has single creditor risk. (You risk your principal if an ETN defaults; you risk only your profits if a total return swap counterparty defaults.)