Hi Old Skeet!
I'm like you....cash ready, hang tough. It's coming..... after all, the G-20 are meeting now, so please be calm. We don't want to scare the children, now would we? I was looking in Fidelity funds because of EU doing QE. Thought some money. Would go elsewhere in the world. Bumped into this fund FEMEX. Wow! I say run away if this is the best they got. I am waiting for a small & mid cap fall....not so much the big stuff. Am buying silver now. Does anybody have any investments for the strong dollar? I am looking at MAPIX, GLFOX for this. Also, for U.S. mid caps: CHTTX. I like the girls. I also saw (on CNBC) that 1 in 4 Americans want to secede from the country. Me, too! And my state stinks, too. Duke says I can be President of our country if I want to. He said he'll be the army... not sure how well that's going to work out. Wife says she wants to be First Lady, and that means a new wardrobe. Can you say, deficits already?! That also means a new car...have to go in style. Maybe I can print my own money....that would help. Get some inflating going. That always helps things. Duke wants a new doghouse. Awww, the military always wants something. I guess I have to give it to him. Don't want a coup. He's been snappy since the pool's closed. Anyway, looking for a pullback really bad. I want to buy some things. Cash doesn't pay well.
Party on Dudes!
the Pudd

somebody once said "take me where the action is" 80% stocks &14% bonds...sounds about right for 4th Quarter, My age I leave out of any figuring

Would like to see SHLD stop falling.
Can't wait until earnings season.
Suspect it will be pretty good, given the vibrancy across nation this summer.
M* says I'm US Eq 50/EM 10/US Bond 10/Cash 30, shorts factored in.

"I don't care what HIS opinions are on index funds or how he handles investment costs, but when he directs his nonsensical 2nd hand information in my direction, I feel obligated to give him the "Facts"!"
Tampabay,
1. Being you do not care what MJG has to offer, and it happens to be a whole bunch, why are you reading his posts?
2. Being you do not care, why are you even on MFO? To talk about yourself?
3. "nonsensical 2nd hand information"? Huh?!?!
4. " I feel obligated to give him the "Facts"!" Who are you?!?!
5. Regarding your comment to me, no, I do not know your portfolio. From another board, which you are persona non grata, I know your " Stock Sector| Holdings Detail Vs. the S&P (per Morningstar)". I asked you "Would you be so kind to share your portfolio with us?" Possibly you should care what MJG says, so you can learn the difference.
Good luck with your "portfolio".
Mona

Scott....thanks for the note on WPC awhile back. It's establishing a firm position in the income sleeve.

Happy to help! It's a looooong-term holding for me and remains one of my largest holdings.
Actually, I didn't even notice this from a couple of days ago:
"NEW YORK, Sept. 18, 2014 /PRNewswire/ -- W. P. Carey Inc. (NYSE: WPC) reported today that its Board of Directors increased its quarterly cash dividend 4.4% to $0.94 per share, which equates to an annualized rate of $3.76 per share. Payable on October 15, 2014 to stockholders of record as of September 30, 2014, this marks W. P. Carey's 54th consecutive quarterly dividend increase. Since going public in 1998, W. P. Carey has paid over $1.5 billion in dividends to investors."
http://money.cnn.com/news/newsfeeds/articles/prnewswire/NY16615.htm

Asset Allocation | Holdings Detail Morningstar
Tampabay
Long% Short% Net%
Cash 3 0 3
U.S. Stocks 77 0 77
Foreign Stocks 5 0 5
Bonds 14 0 14
Other 1 0 1
Not Classified 0 0 0
Total 100 0 100
For What its Worth: 77% U.S. stocks 3% cash 0% short, Ready for 4th Quarter run up? Really.....

With the lull before earning season and mid term elections, I am wondering what investors on the board might be thinking, positioning, and or doing?
For me I have been mostly looking as the recent dip did not go deep enough to peak my buying interest in equities. In checking one of my reference sites I find that the S&P 500 Index is trading on a TTM P/E Ratio of 19.3 and on Forward Estimates at 16.8 while its year-to-date gain has been about 8.7%. With this I am wondering how much is still left in the ride until we reach year end? Yes, indeed a lot of uncertainties exist. I am still thinking October might bring a buying opportunity with a dip or pull back coming. After all, we have mid-term elections coming the first part of November before we get to the traditional fall rally phase part of the year starting somewhere between Halloween to Thanksgiving and carrying on past Christmas to the first part of the New Year.
My target asset allocations are 15% cash, 35% income, 40% equity and 10% other. Currently, I am cash heavy at 20%, income light at 25%, equity heavy at 45% and neutral in other assets at 10% as shown by Morningstar’s x-ray. I’d like to move 5% of my cash to equities for the anticipated traditional fall stock market rally but wish to position in during a good dip or pull back in the stock market. Should we get to the rally without the anticipated dip then I’ll just most likely let things ride as they are and forgo a rebalance after the 1st quarter. Heck, I always enjoyed my fall rally “spiff” investment move as it was a way I generated a little extra cash. My spiff investments set ups have been hard to come by of late.
I’ll close with I am currently just looking while I ponder.
So ... What might you be thinking?
Old_Skeet

MJG
September 19 Flag
Hi Tampabay,
"Sorry to learn that your situation is such that you have severely constrained options relative to active/passive fund decision-making and changes."
Who made it "personal"? I don't care what HIS opinions are on index funds or how he handles investment costs, but when he directs his nonsensical 2nd hand information in my direction, I feel obligated to give him the "Facts"!
His GENERAL comments on his fact finding missions would be useful sometimes...I guess......
How would you handle it John Wayne?

Mona, love you, but you know my portfoilio by heart by know, but I'm going to give MJG MY Stock Sector| Holdings Detail Vs. the S&P (per Morningstar)
Portfolio Tampabay
(% of Stocks sector) vs S&P 500 (%)
Tampabay S&P
Cyclical 18.30 30.51
Basic Materials 0.98 3.36
Consumer Cyclical 9.47 10.42
Financial Services 7.81 14.76
Real Estate 0.04 1.97
Sensitive 23.83 43.02
Communication Services 11.52 3.98
Energy 2.66 10.39
Industrials 3.36 10.94
Technology 6.29 17.72
Defensive 57.87 26.47
Consumer Defensive 29.10 9.37
Healthcare 27.73 14.09
Utilities 1.04 3.01
No diversification there Baby ,"a diverse array" not really....tb

Hi Tampabay,
Thank you for reading my posts. I’m pleased that you are so happy with your current portfolio positions.
I too am very much dedicated to portfolio cost control. Together, we’re in Bogle’s camp in that regard; costs not only matter, they matter greatly. Congratulations on the excellent job you report for your personal portfolio’s low expenses. I have not been that industrious.
Various sources report that the average expense ratio for mutual funds range between 1.1% and 1.5% annually, without specifying how that average was calculated. I did not expect the range of that number. Like you, I like to reference the most reliable values I can access. So I went to ICI’s “2014 Investment Company Fact Book”.
From that reference, Figure 5.6 presents the “Expense Ratios of Actively Managed and Index Funds” from 2000 to 2013. The costs, which are asset-weighted average values, have been declining over that time period. Most recently, the average actively managed equity fund costs 89 basis points. Index equity funds cost 12 basis points. That 77 basis point differential is the hurdle that active management must overcome. A huge number of these funds trip over that hurdle.
I really try to only reference studies that have survived peer review. Therefore, I tend to emphasize academic studies and carefully selected industry work. For example, the cited Rick Ferri Whitepaper was the “Winner of the S&P Dow Jones Indices Third Annual SPIVA Award". It is an impressive Monte Carlo-based analysis. My opinion is that more work needs to be done using that tool.
Given the rather large number of low Expense Ratios that you cited (presumably not your complete portfolio), I was surprised by the comparison of your portfolio performance against the Total Stock Market Index. I would suspect that your portfolio is more nuanced, more complex than a single benchmark standard. Given that you are an informed and experienced investor, I anticipate that your holdings would benefit from a diverse array of investment categories: a ladder of bonds, international and emerging market holdings, small Cap value funds, some real estate positions, perhaps commodity and gold products.
If in fact your portfolio reflects fully broad diversification, then choosing to compare outcomes against a single market equity Index is an imprecise and loose standard. My portfolio is broadly diversified, so I deploy a mix of benchmark Indices that more closely resemble my actual portfolio allocations.
By the way, at the present time, the equity portion of my portfolio is divided about evenly between actively managed and Index holdings.
Again I was surprised by your quoting of portfolio performance year-to-date. I’m pleased that you are satisfied with its current superior output, but that is a meaningless comparison when discussing long-term investment philosophy and guidelines. Even the best hitter in baseball can go 0 hits for 5 at-bats today while a poor hitter can register 2 hits for 5 at-bats. Longer term performance records need to be examined.
Random short term outcomes are not truly indicative of skilful active fund management. I hope your actively managed funds continue to deliver superior results over a statistically meaningful time horizon that is compatible with your goals. Beware of a reversion-to-the-mean market pull. That happens frequently with active fund management. Index funds avoid that risk factor. Seeking positive Alpha introduces the risk of market underperformance.
You get to choose. I have never made any fund recommendation on MFO.
Active fund management is needed for market price discovery. I’ll close with the comment that opened my contributions to this discussion: I believe that “Active mutual fund management is certainly not dead, and will never die.” Wow, I’m quoting myself!
Best Wishes.

Heres what I pay some of the BEST managers & Some ETFs in the Business:
0.10%,0.14%0.14%, 0.15%,0.17%,0.18%,0.23%,0.25%,0.26%,0.35% 0.38%,0,50%,0.71%,0.74%
my average cost per fund/ETF 0.37% Far from 1%
My net (after cost) return ytd +10.56%
Total stock makt.index+9.24
and I wouldn't trade my managers for any INDEX you hold, so keep reading your "real world Data" about costs.....

Just curious. You can certainly get active Vanguard products in the .25 bp range, but the other relatively cheap active families I know (D&C, Mairs and Power, Primecap, T. Rowe) are all in the .5-.75 bp range.
The really low ones there are ETFs, I assume? And if so, aren't they indices?

Portfolio Manager : morningstar
Tampabay
Fees & Expenses | Holdings Detail
Average Mutual Fund Expense Ratio (%)
0.37
Expense Ratio of Similarly Weighted
Hypothetical Portfolio (%) 1.21
The mutual funds in your portfolio tend to have very low expense ratios. This is good, because expense ratios have been shown to be a major factor in mutual-fund performance over the long term.
I always like to provide backing to statements...tb

Well I can vouch for the fact that active management is certainly not dead in the minds of Morgan Stanley CFP's. I recently met with one with respect toward management of an inheritance and the portfolio design he constructed consisted of nothing but "team" managed funds. To be honest it was an impressive listing and I hadn't heard of, or considered, half of the suggested funds.
I met with the guy because he was the advisor to my parents from whom the inheritance originates. I've always managed my own portfolio of half individual equities and half mutual funds. My ten year returns are 6 point something on the fund side and 19 point something on the individual stock side. Truly I suck at mutual fund selection.

The index fund has to "pay" the bid-ask spread on every single purchase it makes. How is that fundamentally different than the bid-ask spread on the exchange traded fund?

You guys are talking about two different things here.
1) The index will pay a spread to trade individual securities when it rebalances to its cap weight no matter what the wrapper of the fund. Both index OEFs and ETFs get hit here.
2) ETFs are themselves a listed, tradeable product. They have their own spreads between buyers and sellers, which can vary during a day, but are price controlled so you never see discounts/premiums like you do with CEFs.
You're talking about 1, Mozart 2. If you're using the ETF as a l-t buy and hold tool, the spread won't really matter, as you say. If you're using it as a trading tool, it might as Mozart suggests.
The reason I personally try not to use ETFs is that, for me, they lend themselves to trading.

If interest rates rise generally REITS lose value. One way to minimize that is to invest in foreign REITS.
http://seekingalpha.com/currents/post/1982845?source=iphoneportfolioapp_copy

MGL:Here Mister Monte Carlo," I read it so it must be true"
Heres what I pay some of the BEST managers & Some ETFs in the Business:
0.10%,0.14%0.14%, 0.15%,0.17%,0.18%,0.23%,0.25%,0.26%,0.35% 0.38%,0,50%,0.71%,0.74%
my average cost per fund/ETF 0.37% Far from 1%
My net (after cost) return ytd +10.56%
Total stock makt.index+9.24
and I wouldn't trade my managers for any INDEX you hold, so keep reading your "real world Data" about costs.....

>>I don't see any leverage in these etfs. They are not closed end funds.<<<
Robert, the open end are priced end of day at NAV. The ETFs can trade all over the place intraday - premium or discount to NAV - depending on what the hope or fear of the day is. Declines are magnified in the ETFs with everyone rushing to sell. That's what occurred in early July. The most egregious example of why I have such a dislike for ETFs occurred that infamous day in May of 2011.

This article from Barrons provide some insight into issues with HYMB
http://online.barrons.com/news/articles/SB50001424053111904780504580049990149821472

In the mini selloff in junk munis in early July, HYD sold off over 4% early that month (closing highs to intraday lows) while HYMB sold of over 3%. Yet the open end barely sold off over 1% while EIHYX didn't even sell off 3/4 of a %.

HYD has 646 bonds in the fund, so it must have been the general asset class itself that sold off, no? Maybe the pertinent question is, how did EIHYX manage to not sell off like HYD? Was it the active management and bond selection? HYMB has 325 bonds, again implying that it was the asset class that sold off, and somehow EIHYX was protected.
I don't see any leverage in these etfs. They are not closed end funds.

Hi Tampabay,
Sorry to learn that your situation is such that you have severely constrained options relative to active/passive fund decision-making and changes.
Unless you are an especially adroit mutual fund manager screener, the price that you are likely to pay for assembling an actively managed fund portfolio rather than an Index dominated portfolio hovers around 1% annually.
The 1% penalty is not a random number that I invented. It is a general average that I gleaned from the Monte Carlo studies reported recently by Rick Ferri. I have referenced this body of work earlier, but it is worthwhile to revisit it now. The title of the report is “The Case for Index Fund Portfolios”. Here is a Link to it:
http://www.rickferri.com/WhitePaper.pdf
The Ferri Whitepaper is based upon a series of Monte Carlo-based simulations that used real world fund data for various recent timeframes. Each Monte Carlo separate case used 5,000 random fund selections to construct a portfolio. Actively managed fund portfolio performance was measured against equivalent passively managed Index products.
The Monte Carlo analyses were completed for 3-fund, 5-fund, and 10-fund portfolios. Different timeframe data were also explored.
The actual numbers changed for each simulation, and are nicely summarized in the referenced paper. Especially meaningful performance summarizes can be found in Figure 1 and in Table 6. You should check these out. Specific numbers change as the number of funds dimension and the timeframe dimension changes.
In these various cases, Index portfolios outdistanced actively managed portfolios in 82% to 90% on the instances. In those cases when the active funds outperformed the Index portfolios, the excess positive returns where one-third to one-half the negative excess returns in the failed instances.
As a very general summary, a portfolio constructed with actively managed funds will deliver approximately 1% less return than its Index equivalent. That’s the sad news.
The good news is that the active managers do recover some of their operating costs with perhaps a mix of superior stock selection and/or effective market timing of entry/exit points. Although persistent performance is an issue, a small cohort of active managers do deliver positive excess returns (Alpha) over complete market cycles. That’s the real acid test.
I wish you success in identifying this small cohort. Low cost is one indicator even endorsed by Vanguard. Michael Mauboussin has also stated that fund managers seem to generate peak outcomes in their early 40s. Perhaps an age criteria, like centered on 43 years old, would aid the search process.
Good Luck and Best Wishes.