@bee: Thanks ! Your the buzz !!
Regards,
Ted
https://www.google.com/search?q=buzz+bee&biw=1280&bih=585&tbm=isch&tbo=u&source=univ&sa=X&ei=G01OVfvnEsLkoATv9oH4Cw&ved=0CEgQsAQ#tbm=isch&q=+bee

I have not done the work (sorry) but think the equal weight outperformance is mostly due to the bias of smaller average caps outperformance . I suggest that a 50% S+P 500 50% extended market index would mostly outperform the equal weight at lower cost. I am also surprised that the equal weight Nasdaq outperformed in 2014 when aapl and msft had good years though the article doesn't exactly say it did (multi year performance could be influenced by bad year for aapl

FYI: “Smart beta” is a term that has increased in popularity over the last year or so. The straightforward idea is that there are numerous problems with the way that traditional stock and bond market indices — and their tracking funds — are constructed.
Regards,
Ted
http://investorplace.com/2015/05/invest-equal-weight-etf/print

FYI: Bond giant Pimco rolled out on Thursday the Pimco Capital Securities and Financials Fund, which will invest in capital securities, including subordinated bonds, preferred shares and contingent capital instruments issued by financial institutions globally.
Regards,
Ted
http://www.reuters.com/article/2015/05/07/investing-pimco-fund-idUSL1N0XY2H920150507
M* Snapshot PFINX: http://www.morningstar.com/funds/XNAS/PFINX/quote.html

This thread has been way more than worth my time. I have devoured it and noted a great deal of it, and stored a bunch of it in my email. Substantial, thoughtful, meaty, deep. From different angles. I, for one, thank the group here and now. About my "Mickey Mouse" reference: it's just that there are so many letters, so many options, so many "Parts." If it's made much more complicated, the gov't will run out of letters.
I don't trust the government, but we can't do without some kinda government. And I don't trust for-profit Health Care ANYTHING. The government can be relied upon to screw up the simple task of pouring piss out of a boot, with instructions written on the boot-heel. I still think Single Payer would be simpler and more comprehensive. Have any of you other guys ever attempted to navigate Romneycare in MA? (No need to answer. You get my point.)
More news: another waiver requested.
http://wwlp.com/2015/05/06/baker-asks-feds-to-allow-mass-to-deviate-from-affordable-care-act/

Ralph may be lucky to have you.
In 1983 or so, some Japanese CD company, after Sony and its CDP101, did an early release of a fancy CDP model with this new feature --- random play. (You might see where this is going.) When you pushed that button, the CD was played randomly. Meaning track 1,3,2,1,1,1,4,6,3,3,5,5.
It was only a matter of months before the units were returned enough by consumers to be recalled, and thus was born shuffle play.

Hi Guys,
Over the last few days, a tennis buddy, Ralph, tried the Monte Carlo simulator that I recommended for the very first time.
Although he is certainly not mathematically illiterate, Ralph is not especially sophisticated in the odds calculation arena. Truth be told, he is a terrible gambler, but a terrific tennis partner. Vegas comps him lavishly. Until yesterday, he had never run a Monte Carlo code. He called me today to register a complaint.
Ralph made a sequence of runs with identical inputs. He was shocked that the projected portfolio outcome success percentages slightly changed with each simulation. He questioned the reliability of a code that produced different end results on each trial.
I assured him not to worry, and neither should you guys. I suspect many of you know the reason.
A Monte Carlo code randomly selects numbers given the programmed model (Gaussian or a modified form thereof) and the statistical input parameters (mean annual return, standard deviation). Therefore, although typically a thousand random individual cases are computed for each input scenario, it would be shocking if the end outputs were identical for each scenario. Ralph was a happier warrior when he said good-by.
Also, users should be cautious when interpreting probabilities expressed as percentages (as in the Flexible Retirement Planner format) or as a frequency. Percentages are more abstract; frequencies seem more concrete. Folks are swayed in their decision making by the output format according to behavioral wizards.
Folks are likely to make better decisions when the probability of success is quoted as 80 out of 100 cases than when presented as an 80% success probability. Also, if fear generation is a presentation goal, more fear will be induced if the results are given as a 20% failure rate rather than an 80% success ratio. So much for rational decision making!
Please try a few simulations yourself to explore the likelihood of your portfolio’s survival rate, not its failure odds.
Best Wishes.

>> I dispute the assertion that a retire with a 15-year time horizon would not want to own some equities.
I think he was implying individual stocks and all equities, not bonds only.
I myself dispute it even if that is what he was implying.
15y is long in my book and practice. But I may be more firmly equity-oriented than many retirees.
>> Kitces' reference to "superior risk-adjusted returns" have not been documented.
Good grief, how much documentation do you need?
>> He has not analyzed for us the risks of owning different types of equities,
Everyone else has, in spades.
>> or different types of bonds,
He is talking equities only, as the very next clause made clear.
>> or tried to quantify for us the risks of potential drastic changes in either tax policy or SS structure
How could anyone quantify such risks? Quite apart from the potential drastic changes never happening, he is dealing with things as they are now. Not so delicate and cart.
>. somewhat incidental to the referenced article ... but part of the consideration is whom you would rather have in control of that sum of money, yourself or the government?
You do not have control of that sum of money, and never will. Missing/ignoring the point.
Who ever woulda thought anyone would object to this bland and entirely self-evident pointing out of fact?
>> ultimately, delaying Social Security benefits provides superior risk-adjusted returns to equities and portfolio investing in the long run. ... Obviously, this is not true in the short run – as noted earlier, it takes more than 15 years to break even at all.

The chief counterarguments arise either from the hard reality of needing it earlier without question, or from fantasies involving profound government distrust and crippling future anxiety. That's cool, whatever floats your paranoia, but it's not a prudent way to plan and make thoughtful money decisions.

Sorry wrong fund initially posted.
http://www.sec.gov/Archives/edgar/data/1032423/000119312515178419/d922872d497.htm
497 1 d922872d497.htm SUPPLEMENT DATED MAY 8, 2015 TO THE PROSPECTUS DATED FEBRUARY 28, 2015
DIAMOND HILL FUNDS
Diamond Hill Small Cap Fund
Diamond Hill Small-Mid Cap Fund
Diamond Hill Mid Cap Fund
Diamond Hill Large Cap Fund
Diamond Hill Select Fund
Diamond Hill Long-Short Fund
Diamond Hill Research Opportunities Fund
Diamond Hill Financial Long-Short Fund
Diamond Hill Strategic Income Fund
Supplement Dated May 8, 2015 to Prospectus Dated February 28, 2015
Effective June 12, 2015 at 4:00pm Eastern Time, the Diamond Hill Long-Short Fund (the “Fund”) will close to most new investors.
The Fund will remain open to additional investments under the following circumstances:
• Existing shareholders of the Fund may add to their accounts, including through reinvestment of distributions.
• Qualified defined contribution retirement plans, such as a 401(k), 403(b) or 457 plans, utilizing the Fund as an investment option on June 12, 2015 may continue to establish new participant accounts in the Fund for those Plans.
• Financial Advisors who have clients invested in the Fund as of June 12, 2015 may establish new positions in the Fund for new clients where operationally feasible.
• Investors may purchase the Fund through certain intermediary sponsored fee-based model programs, provided that the sponsor has received permission from Diamond Hill Funds that shares of the Fund may continue to be offered through the program. Approved or recommended lists are not considered model portfolios.
• Trustees, Directors, and employees of Diamond Hill Funds or Diamond Hill Investment Group, Inc. and their immediate family members may open new accounts and purchase shares of the Fund.
In general, the Fund will look to the financial intermediary to prevent a new account from being opened within an omnibus account at that intermediary. The Fund’s ability to monitor new accounts that are opened through omnibus accounts or other nominee accounts is limited and the ability to limit a new account to those that meet the above criteria with respect to financial intermediaries may vary depending upon the capabilities and cooperation of those intermediaries.
The Fund reserves the right to make additional exceptions or otherwise modify the foregoing closure policy at any time. The Fund also reserves the right to reject any purchase or refuse any exception, including those detailed above for any reason.
This Supplement and the Statutory Prospectus dated February 28, 2015, provide the information a prospective investor ought to know before investing and should be retained for future reference.

There is nothing wrong with early retirement and having to live off or saving SS funds. In that time period of 8 Years you will gain about $110K in retirement payments. If that is what you feel you need to do. A lot of people have no other choice as they need it. But as long as my health is good, my game plan was to collect an additional $1.1 myn. pay check in that same 8 yr. time frame.

57% expect a market correction of between 10 and 20% in the next 12 months!

Will see what Clifford Asness has to say.....

----- "Delaying Social Security As The Best Long-Term Return Money Can Buy" -----
The above phrase which Michael Kitces highlights in bold-face near the end of his article would appear better suited for selling cars than providing serious financial advice. ... However, based on that proposition (and assuming I just fell off the turnip-truck), is there any way by which I might mail some additional money to the government for them to invest for me in this wonderful opportunity?
-
Kitices writes: "... ultimately, delaying Social Security benefits provides superior risk-adjusted returns to equities and portfolio investing in the long run. ... Obviously, this is not true in the short run – as noted earlier, it takes more than 15 years to breakeven at all. Yet if the retiree’s time horizon was that short, the proper investment would not likely be equities anyway."
1. I dispute the assertion that a retire with a 15-year time horizon would not want to own some equities. I don't think the smart folks at T. Rowe Price view it that way. Their Balanced Retirement Fund, designed for people already in retirement, carries about 40% equities. Even their conservative Spectrum Income Fund includes a 10-15% allocation to income-producing equities. If we include even a modest allocation to equities and corporate bonds in the investments of older people, I suspect many of his assumptions fail to hold water.
2. Kitices' reference to "superior risk-adjusted returns" have not been documented. He has not analyzed for us the risks of owning different types of equities, or different types of bonds, or tried to quantify for us the risks of potential drastic changes in either tax policy or SS structure - any of which could upset his delicate apple cart.
3. Kitices "proves" that deferring Social Security is a better investment than buying an annuity.
OK - I'll give him that one. What investment isn't?
4, It's somewhat incidental to the referenced article ... but part of the consideration is whom you would rather have in control of that sum of money, yourself or the government?
-
I detest the pop-ups that have begun appearing asking me to send Mr. Kitices some $$ to subscribe to his newsletter. :)

From the article: "While you shouldn't pick funds solely based on fees, expenses matter because high fees will substantially reduce your returns. Remember, though, that some things in life are worth paying more for, and a good fund manager is one of those things. One rule of thumb: If the fund's expense ratio is more than 1.5%, you should be really sure about the fund manager before you buy"
Huh? Whoever wrote this article sounds like a financial adviser considering he talked about what they like to do when selecting funds for their clients' portfolios, and he spouts this crap. How exactly does one get "really sure" about the fund manager before you buy? It sounds a little like knowing your manager isn't as important if he doesn't have to overcome a big expense ratio. We know statistically that a big portion of fund managers can't beat a low cost index fund after expenses, so it seems to me you'd want to know your manager as well as you can no matter what the expense ratio is.

I'm not a technical expert by any stretch of the imagination but the pattern on the chart looks to me like a flag pattern consolidation that normally resolves itself with a continuation of the trend. If that turned out to be true, it doesn't say that gold miners should go down, it just says that bullion should go up more than gold miners OR go down less.
Since the second half of 2011 gold has been going down, after a huge rally from roughly $700 in late 2008 to roughly $1900 in late 2011. Interesting, the "box", the 50-62% retracement of that move is bounded on the lower side by roughly $1150. Gold has tested $1150 several times in the last six months and it has held. So from very long term perspective one might argue bullishly for gold.
Along with gold being weak since late 2011 the miners have been weaker, which has caused the ratio of GLD to GDX to climb as shown in the chart in the article. If the price of gold was set to rise, then a good bull market should be led by the miners as well, just like they led to the downside.
So one the one hand there seems to be good technical reasons to think that gold's next move could be higher and on the other hand the ratio of GLD to GDX would suggest to me that if the ratio is going higher and miners lead then for the ratio to go up both have to fall, miners more than bullion.
Again, that doesn't lead me to a strong belief one way or the other but I also don't think it would lead me to assume that gold miners are a bad bet.

The value of a commodity (gold, oil, milk, pork bellies, etc.) is impacted by the valuation of the currency it's held in.
From the link below (investopedia):
"Gold is a proactive investment to hedge against potential threats to paper currency. Once the threat materializes, the advantage gold can offer may have already disappeared. Therefore, gold is forward-looking, and those who trade it must be forward-looking as well."
gold-the-other-currency

FYI: As soon as the program becomes available for free, early tomorrow, I will link it.
Regards,
Ted
May 7, 2015
Dear WEALTHTRACK Subscriber,
Federal Reserve Chairwoman Janet Yellen caused a bit of a stir in an interview Wednesday when she commented that “equity market valuations at this point generally are quite high.”
It wasn’t exactly an “irrational exuberance” speech, a la Alan Greenspan in 1996, but pundits were quick to point out that his observation was about four years early, as the markets continued to rally until the March 2000 peak.
The market is expensive historically, based on several longer term measures including one of our favorites, the CAPE ratio, or Cyclically Adjusted Price Earnings ratio, created by frequent WEALTHTRACK guest, Nobel Prize winning economist Robert Shiller.
The CAPE, which is figured by taking the current price for the S&P 500, divided by the average of S&P earnings over the last ten years, adjusted for inflation, is currently around 27. That is well above its 20th century average of about 15.
Fed Chairman Yellen isn’t the only one concerned about stock market levels, professional investors are too.
According to a recent survey from State Street Global Advisors, of over 400 institutional investors worldwide, 63% of them increased their stock exposure over the last six months, but 53% wish they could decrease it and would if they had a more attractive alternative. Talk about conflicted!
Plus, 57% expect a market correction of between 10 and 20% in the next 12 months!
Normally investors could turn to bonds for income and protection, but with bond yields near record lows, they are no longer a viable option.
According to this week’s guest, Clifford Asness, both stocks and bonds are more expensive now than they have been in 90% of market history. Asness is Founder, Managing Principal and Chief Investment Officer at AQR Capital Management.
AQR stands for Applied Quantitative Research, which they use in a number of strategies.
Founded in 1998, AQR, now a global investment management firm, oversees more than 130 billion dollars in hedge funds, mutual funds and a diversified collection of investment strategies, from traditional long-only ones to multiple alternative approaches. I asked Asness how unusual it was for both stocks and bonds to be this expensive at the same time and what investors should be doing in response.
If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Asness, about his new venture with London Business School, available exclusively on our website.
If you have comments or questions, please connect with us via Facebook or Twitter.
Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo

Take a look at HYS. Duration 1.91 years. 4.54% distribution yield.

I was reading the fund "Fact Sheet" tonight and it says it invests primarily in higher-quality high-yield bonds and maintains a duration of less than three years. So, it doesn't sound unconstrained based on that. Currently, the duration is about 1.49 years as of March 31.

"If you guys want to continue this discussion, that’s fine." "Everyone is free to disagree."
"I note that in your comment, you use the plural “we” when recording “our” disapproval." "Given your choice of pronouns, you presume to be speaking for the bulk of the MFO community."
@MJG- Well now, you gave "you guys" permission to continue the discussion, with an ever-so-slightly condescending "that's fine". And while I make no presumption about speaking for "the bulk of the MFO community", I thought that I was included in "you guys". Maybe not.
Never did put much stock in your "Best Wishes", actually, especially when used to end one of your many polemics. Kinda sounds insincere, if you follow me. By the way, I've been noticing a bit of self-plagiarism in your recent replies to other MFO folks. And here I thought that you reserved all of that vituperation just for me. Yet another let-down.
"Best Wishes"

Spot on Bee with FAIRX.
I'd say RPHIX is another one.
Hmmm...not a 1 star, but they never warmed to OAKBX, even during its amazing period last decade.