>> 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.

Hi Old Joe,
To quote Ronald Reagan from the 1980 Presidential debates with Jimmy Carter: “There you go again”.
What pleasure do you take in building a straw-man (that’s me), and then meaninglessly attacking that straw-man? That could be a dangerous practice for you. This straw-man chooses to fight over either flight or freezing. My posting record shows that over and over again.
In this instance, you purposely misinterpret simple declarative statements that I wrote: "If you guys want to continue this discussion, that’s fine. Everyone is free to disagree." I meant nothing more than what I said. There is no deep hidden meaning that lurks below the surface.
Somehow, with malicious intent, you distort and insinuate my real meaning to declare that I hold MFOers postings as “substandard commentary”. That’s a total fabrication that was invented in your own mind. That’s sad indeed.
But I do appreciate this addition to your continuing and gratuitous tirade directed at me.
It further documents your spiteful and nasty nature. Your written words say much more about your character than they identify my shortcomings. It permits seasoned MFOers to compare and judge the merits of your superfluous assertions against my posts. I’m sure they recognize and measure the quality to these exchanges.
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.
To satisfy my curiosity, I wonder how you assembled this imagined cohort. Did you conduct a comprehensive and independent survey? Did Professor Snowball provide you with some statistical documentation? Or are these the rants of a lone dissenter who has an old, rusted axe to grind? I suspect the latter.
Why you persist in your ill-conceived vendetta totally escapes me. But I still hope for your rapid and complete recovery from this wasteful malady.
Best Wishes (sort of since my patience is thinning but my resolve is not).

http://www.schwab.com/public/schwab/nn/articles/When-Should-You-Take-Social-Security
The amounts are so much higher when you wait, seems like a no-brainer if you can swing it from other resources and are unlikely to die soon.

Check out Junkster's post above about his friend.
Also, when computing when do take SS it isn't only what is mentioned in their article.
When you delay taking SS; you have to take into consideration the opportunity cost of using your $ for expenses.
So, using the schwab example, if a single person could get $2,000/mo or $24K/year from SS but use their money the interest or capital appreciation would have to be added to the years to break even.
e.g. 10% interest = 2,400 x 5 year delay = 12,000
Divide the 12,000 by the SS they would get per month at 67 for the number of months. Let's say 2,600. Then you have to add 4.6 months to the break even point.
Other factors you have to take into account:
-Opportunity cost above - compounding of int/cap gains, add more time for that? .
-401K mandatory withdrawals, if you take SS later + you have 401K withdrawals you may pay more taxes than taking SS early + the 401K because your tax base would be lower- add more time for that?
e.g. 600/month x 12 = 7,200 higher base x tax rate 20% =1,400/2600 = .5 month every year 15? = 7.5 months.
4.6 opportunity cost
.4 compounding interest
7.5 extra taxes
12.5 months.
So deferring may not be financially advisable. In the Schwab example the break even is between 15-16 years - Between 77 and 78
If you want to do the calculations I'd help in reviewing them for you.

AIG has perked up YTD and may help FAIRX (My "silver" 1 star fund) gather some additional stars.
What fund do you own that M* loves to hate?

Joe Bradley, Towle's head of client relationships and my contact with the adviser, writes: "Thanks for asking. We take pride in having a true team effort, meaning all five guys are viewed as portfolio managers rather than having an analyst/PM hierarchy you see elsewhere. We work together to build consensus around all decisions and all members of the team have input. The young guys have been there less that five years, but Peter’s been managing the portfolio with Woody for 14+ and Chris has been doing it for 20+. We believe we have refined the Towle “process” and are not dependent on any one individual."
On the question of benches, Towle has one strategy and five guys. Huber has three strategies and six guys (four PMs, two analysts), according to the Hubercap website.
For what interest that holds,
David

It takes 12 years to break even if you don't take SS early, figure it out...I did....
I have made very good use of my Gov. Checks for last 4 years 62 to 66yo, the money is well invested to make much more money (income) in the future, While late collectors 66/70 are still trying to get even.....go figure

@Crash
As msf wrote; there are many choices. Time to get studying on all of this now. Not sure if you can have some of the supplemental coverage plans (i.e., Plan F) if you are "expat" status living in another country. And your stated $1,000 becomes $896 as a direct deposit, as Medicare part B (currently $104) will be pulled from your SS each month. Plan D, the meds/drug is another situation with many choices to help cover meds costs. Michigan has 36 vendor choices for this plan. msf also noted about delays of acceptance/choice by you of some of these plans. If you "opt out" and delay and then want Plan D in the future, you will incurr a permanent penalty which = higher rates.
The internet is your best friend right now. All of this is available for research and study to determine what might suit your future needs.
Not sure what your Mickey Mouse is about with this.................

Are you sure Social Security is taxed in Mass? From Mass.gov:

21. Are Social Security benefits taxable in Massachusetts? Is the Medicare tax withheld from my Social Security benefits deductible on my return?
Massachusetts does not tax benefits received from U.S. Social Security, Railroad Retirement (Tier I and II), Public Welfare assistance, Veterans' Administration payments or workers' compensation. Any portion of such income, which may be taxed under federal law, is not subject to Massachusetts's income tax.

Regarding the parts of Medicare - A is hospitalization, 100% covered (once you begin SS benefits or apply if you don't claim SS benefits by age 65); B is doctor services, typically 80% covered, and you pay a premium (currently $104/mo). That premium is inflation adjusted and may be higher for high income retirees. The premium also goes up, permanently, if you don't start part B within roughly a year of eligibility (unless you're still working w/group coverage).
D is for 'D'rugs. Since these are private insurance plans, their premiums vary, but are still subject to penalty and high income premiums like part B. And since these are nonstandardized, each insurer has a different formulary. Like employer plans, those are subject to change with little notice.
C is Medicare Advantage. Like the group PPO/HMO plans you're familiar with, they (usually) cover everything (including drugs) but have their own networks of physicians and hospitals. So it replaces A/B/D if you use it.
You always pay your Part B premium to Medicare (even if you take Medicare Advantage instead of vanilla Medicare parts A/B/D). Some Medicare Advantage plans charge extra (and provide extra benefits), some do not. The networks are the major drawback; IMHO the major plusses are a cap on out of pocket expenses and no additional part D (drug) premium. (Under "original" medicare, you'd need a Medicare Supplement - Medigap - plan for an out-of-pocket cap.)
Medicare has standardized Medicare Supplemental Plans, so what one insurer offers must be the same as what another insurer offers for the same plan. These plans go by letters - too complicated to go into here. Since new Medigap plans (starting in 2020) cannot cover all your deductibles (new law), Medigap plans C and F will be changing, though no one knows exactly how yet. To that extent, MJG is correct, you cannot know the future exactly. But you can still have a pretty good idea of what's coming down the (Mass) Pike.
Good luck.