@rforno
Yes, to your note.
I'm sure there are also a number of retirement plans that continue to have this offering, too.

Hi Bobpa,
I like your plan to incentivize your grand daughter towards a savings program. That's a tough sell, but the necessary first step in providing for a comfortable retirement. Good for you and good for your grand daughter.
But asking for a formula that uses a fixed annual return rate fails to address the risks associated with any investment program. In our uncertain world, returns will surely vary over any specified timeframe. A formula does not capture that variability; a Monte Carlo simulation does.
Your question allows me to once again Beat the Drum Slowly for the application of Monte Carlo tools. They were specifically designed to assess the impact of uncertainties.
Bravo to Professor Snowball for recommending a Monte Carlo site. I'm sure you can use it to demonstrate the range of possible savings outcomes coupled to investment return uncertainties.
Allow me to suggest my favorite Monte Carlo website for the same purpose. Please take a look at the Portfolio Vizualizer website at:
https://www.portfoliovisualizer.com/monte-carlo-simulation
The simulator gives likely end-of-period wealth results almost instantaneously. Just running the code together should interest and impress your grand daughter in real time.
Explore with her some what-if scenarios. Input various average and standard deviation estimated returns rates using the Parameterized input option. The code even permits a fat-tailed distribution option. Show her the value of increasing, or the penalty of reducing, the planned saving schedule. The what-ifs are almost endless and yield sensitivity insights.
This could be a fun and educational project for both of you.
Best Wishes

Hi @PopTart
Hoping all is well at the A-squared household. Sure you're teaching the children well...as in, an equity is, a bond is......the markets fluctuate, but.........
Okay, I'll provide a few "are you sh*t'in me data points for broad healthcare.
>>>FSPHX and PRHSX from 1-4-99 thru 1-4-2008 (9 months before the full equity market melt)
---FSPHX return = 61% annualized with all distributions = 7.6%
---PRHSX return =161% annualized with all distributions = 20%
NOTE: from the end of December, 2007 thru March of 2008 healthcare had a hit of about -20% and then moved sideways until the full market melt in mid-Sept. of 2008
http://stockcharts.com/freecharts/perf.php?FSPHX,PRHSX&l=0&r=2262&O=111000
>>>FSPHX and PRHSX, 1-4-2008 thru 3-4-2009 (market melt equity bottom, eh?)
Both down about 40% during this time period. Healthcare was already moving to the downside long before the Sept. 2008 blowup.
>>>FSPHX and PRHSX from 3-9-2009 (end of equity market melt) thru 3-3-2017 (now)
---FSPHX return = +431% annualized with all distributions = 54%
---PRHSX return = +508% annualized with all distributions = 63.5%
http://stockcharts.com/freecharts/perf.php?FSPHX,PRHSX&n=2010&O=111000
>>>Last five years via M*, including the Ms. Clinton comments about taking healthcare/pharma "down". Click onto the 5 year to sort return list. Five year health category average = 17.6%
http://news.morningstar.com/fund-category-returns/health/$FOCA$SH.aspx
As to the future directions....well, forces are pushing from many directions and there will likely be the continued swings in this equity sector. As to the challenges for the political faces portion, is part of this "lobby" link. One might presume that the big monies will continue to "talk", eh?
https://www.opensecrets.org/lobby/top.php?indexType=i
Now on the personal and sometimes scary side for this house, is at this time 67% of all invested assets are in equity with 80% U.S. and the other 20% mostly in Europe. Direct healthcare invests are FSPHX, PRHSX (before closed to us) and FHLC (Fido etf). With the other mutual funds, etf's or index funds; a M* snapshot indicates that 41% of our equity is in U.S./global healthcare. The majority of the monies being in the direct investments. These holdings placed a damper on our 2016 returns, but has us at 6%k YTD, thanks to the recovery in this sector. Keeping the faith at this time for this sector. Active traders are having even more fun; but this house doesn't play in the short time areas very much anymore; but attempt to watch for signs of sector "sickness".
Lastly @PopTart , I do believe PRHSX is available to those within some retirement plans or direct investors with the company, but as you know, not via Fido. Also, the better of these two mutual funds was PRHSX. Within the past several years, even prior to the manager change at PRHSX, FSPHX was traveling a very similar path for returns. Your having direct access to FSPHX should more than cover this area. You may also choose to review some of Fido's other health/medical related select funds. And keep in mind that you likely already have a decent amount of healthcare inside of broad based mutual funds or indexes.
I've tried my best to recall and submit everything I thought about earlier today to reference your post. I'm going to take another check of links and data to help eliminate any mistakes. Questions?
Take care,
Catch

The NY Times article cited is really depressing reading for current or former teachers. I may have made this point in another thread, but my view, as a retired faculty member and union officer and the spouse of a retired public school teacher, is that the NEA and its state affiliates have failed to properly represent the interests of teachers, especially with respect to retirement. I have observed a paternalism that expresses itself in opaque arrangements with third parties, probably negotiated in expensive restaurants in full knowledge that most teachers won't notice the commissions and high ERs on the products sold. @bee is obviously very knowledgeable about what is available in CT (my home state) and I wish others were as well informed. I was ignorant about my retirement plan when I started work and I doubt I was alone. I wonder if a course in financial literacy in HS might help.

Some facts about teacher retirement plans in CT (each state has it own approach):
-CT teachers contribute to medicare, but not Social Security. CT teachers contribute to a State run retirement system in lieu of receiving SS.
-CT is attempting (a bill proposed by the governor to help balance the budget this year) to shift the shared retirement contributions from (State & the Teacher) to the towns (State, Municipality & the teacher).
-City/town teachers and their unions negotiate with local Administration (superintentent, HR, etc...and now TPAs...Third Party Administrators) usually not (the state, city, or local Board of Ed) when it comes to 403(b) plans.
-Individual teachers have to advocate for non-annuity products and attempt to implement 403(b)(7) plans themselves. Many roadblocks stand in the way of making these changes and options available.
-There was once an escape hatch (90-24 transfer) where an 403(b) annuity account could be surrendered and the account balance (after surrender fees) could be transferred to a company like Vanguard who provide 403(b)(7) options like Index funds. Curiously IRS law was changed to prohibit this. Here's a link to this topic from 2005 before the law changed:403bwise.com/index.php?showtopic=830
A little known option for individual teachers in CT is to utilize (by making voluntary contributions) to their voluntary account with CTRB (CT Teachers Retirement Board).
Link:ct.gov/trb/lib/trb/formsandpubs/VoluntaryBulletin.pdf
There are no expense ratio, no fees, and you receive a yearly return equal to the return of the state managed retirement fund. These contributions are after tax contributions that can later be applied to an extra annuity that the state offers at retirement or can be transferred (trustee to trustee) to any brokerage house at retirement.
Other state might have similar options.
Here's how the fund invests and its return:
ott.ct.gov/pensiondocs/fundperf/FundPerformance12312016.pdf
403bwise is a good resource for asking questions and seeking answers.
403bwise.com/

Twice in recent years I have written to the Maryland retirement system offices with some polite questions about the 403(b) and SRA investment options available to us. Never have I received a response or even an acknowledgement. It only reaffirmed one of my major reasons why I selected the self-managed 403(b) option instead of the fairly black-boxy and advisor-riddled state pension system when I joined the university system in 2010.

FYI: When the Greenwich Alliance for Education held its annual trivia challenge last week, Carol Sutton worried a bit when the topic turned to finance. Ms. Sutton, the president of the teachers’ union in Greenwich, Conn., and her table full of educators weren’t quite equipped for the question about debentures.
Other tables were quick to answer. It was a reminder, as if she needed one, that for all of the money smarts in the community, which is packed with hedge fund executives, she and her colleagues were still mostly on their own when trying to fix their 403(b) retirement savings plan.
Regards,
Ted
https://www.nytimes.com/2017/03/03/your-money/401ks-and-similar-plans/when-teachers-face-the-task-of-fixing-their-retirement-accounts.html?ref=your-money&_r=0

$67,928 if you were earning 5% risk-free.
I used the calculator bee points us add and had it calculate $100 initial, $300/year addition (i.e., $25/month), compounded monthly for 50 years. The "compounded monthly" part just means we assume that your April portfolio would have undergone some modest appreciation so your May portfolio will be more than just April + $25.
It's a very imprecise calculation since it does assume all of the additions occur once a year through capital growth occurs, uninterrupted, monthly. The better answer would come from a Monte Carlo simulation. If you're familiar with Excel (Chip and Charles will happily testify to the fact that I am not), one of the faculty at Wabash College has posted a free Monte Carlo add-on for it. The technique also underlies the retirement calculators at T. Rowe Price and Vanguard.
Thanks, by the way, for helping your granddaughter. I've had this same conversation with one of my brothers about why (17 years ago) he should really be putting away $25 or $50 a month for his son's education. I even set up the account and put in some hundreds of dollars to start it. Mostly I got uncertain nods and a long-unfunded account in return. There's some research that suggests we need to visualize our future selves (in some cases researchers use "aging" software to accomplish the task) in order to make this work. Something like, "let's say you've worked like a dog for 40 years and now you find yourself living alone in a house that's too big with a quarter-century of 'vacation' in front of you. What do you imagine you'd want to be able to do or feel?"
For what that's worth,
David

Of all the variables you listed the most powerful is the compounding of interest (5%) over time (50 years). This teenager should try to save as much as possible early in life and then let time and compounded interest work their magic.
Q's to pose to this teenager:
Could your teenager scrape together $100/month or $1200/year?
Could this be saved in a Roth IRA (teenager must have earned income)?
If a 16 year old could save $1200/yr for 16 years (until age 32) and then stop contributing, but remain "invested" at an average of 5% a year; at age 64 he/she would have a nice little nest egg for retirement, about $150K.
At an average of 6.5% it would be twice that amount or about $300K.
At 10% average return it would over $1M.
Not bad for a $19,200 investment (16 yr saving $1200/year).
This calculator seem to meet your input criteria:
moneychimp.com/calculator/compound_interest_calculator.htm

Best: RPHYX/RPHIX - I annually funded it for 2 years worth of monthly withdrawals as our retirement 'paycheck'.
Mixed Bag: RSIVX/RSIIX - On the taxable side, I did a little tax loss harvesting and then reinvested once Mr Sherman got the train back on the track. On the IRA side, it's been an interesting ride, but in the long run, it has been an overall gainer. ( I tend to be a buy & hold traditionalist )
Worst: The RiverPark Focused Value Fund RFVIX/RFVFX
Speaking of which: Whatever happened to the occasional Conference Call invitations? I haven't seen any for awhile...

Howdy,
Well, sitt'in here with 67% equity/33% bond blend at this time.
Looking at 3%/month average for the year (as of March 1); which would amount to at least a 36% annualized rate of return.
Will this pattern hold for the full year? Ha, one wouldn't think so, eh?
With this mix, at +6% so far for the year; surely there are other portfolios here much in front of this.
Watching from the sidelines, the political state of affairs, both domestic and international. Can't find a complete common thread for optimism from the political sector, except for the "let us see what happens" with the group of folks who appear to be traveling in another direction which will likely have economic meanings.
At this point, for this house, the technical aspects have more weigh than whatever fundamental aspects provide for where our monies may travel in the coming months.
Lastly, this post remains personal data investment oriented only, for the benefit of whomever chooses to view. I find no reason to interject any political or similar wandering. The "flag" icon has its uses.
The Mix = 67% equity and 33% bond
-Equity portion =
---U.S. oriented = 80.6%
---foreign = 19.4%
-Bond portion =
---investment grade = 81%
--- other =19%
Just a simple view of a real and active retirement portfolio.
Fun for now. :)
Hang in there,
Catch

Hi @TSP_Transfer,
Thanks for following my post "The Markets & More." I started this post to keep the board engerized while @Ted was away due to health reasons. Ted has been a long standing contributing member of both Fund Alarm and MFO; and, in his retirement this has provided him with an activity that keeps him occupied and one that he has done well with plus he has provided a service to many. Since, I am a student of Ted's, so to speak, from my learning through his many post I have decided to post the content of what was the Market & More under his morning opening thread. You may recall I also wrote of this in prior post that the Markets & More would be no more when Ted returned and I'd continue to host the thread of "What Are You ... Buying ... Selling .... or Pondering?"
Once, I start the throttle down process in my equity allocation I'll let everyone know. Come fall, I'll most likely start the throttle up process and start posting barometer readings again at this time. Know this, not only by my findings and thoughts but by the findings and thoughts of many others there is a common belief that the markets are currently extended.
I'm going into March with a full boat load of equities (within my asset range of course). And, I plan to start a throttle down (rebalance) process when I see a break down in technicals and/or we make it through March. Come May, I am thinking I should be by then in alignment with my barometer and equity weighting matrix.
For those wanting to read the latest barometer report check Ted's Morning Breakfast Briefing.
Thanks again for your interest.
Old_Skeet

https://www.sec.gov/Archives/edgar/data/1141819/000089418917001178/schooner-tpm_497e.htm
497 1 schooner-tpm_497e.htm SUPPLEMENTARY MATERIALS
Filed pursuant to Rule 497(e)
Registration Nos. 333-62298; 811-10401
Schooner Hedged Alternative Income Fund
A series of Trust for Professional Managers (the “Trust”)
Supplement dated March 1, 2017
to the Prospectus, Summary Prospectus and
Statement of Additional Information dated September 28, 2016
The Board of Trustees (the “Board”) of Trust for Professional Managers (the “Trust”), based upon the recommendation of Schooner Investment Group, LLC (the “Adviser”), the investment adviser to the Schooner Hedged Alternative Income Fund (the “Fund”), a series of the Trust, has determined to close and liquidate the Fund. The Board concluded that it would be in the best interests of the Fund and its shareholders that the Fund be closed and liquidated as a series of the Trust effective as of the close of business on March 31, 2017 (the “Liquidation Date”).
The Board approved a Plan of Liquidation (the “Plan”) that determines the manner in which the Fund will be liquidated. Pursuant to the Plan and in anticipation of the Fund’s liquidation, the Fund will be closed to new purchases, except for purchases made through an automatic investment program, effective as of the close of business on March 1, 2017, and the Fund’s assets may be entirely invested in money market instruments or held in cash. Accordingly, the Fund will no longer be investing according to its investment objective. However, any distributions declared to shareholders of the Fund after March 1, 2017 and until the close of trading on the New York Stock Exchange on the Liquidation Date will be automatically reinvested in additional shares of the Fund unless a shareholder specifically requests that such distributions be paid in cash. Although the Fund will be closed to new purchases as of March 1, 2017, you may continue to redeem your shares of the Fund after March 1, 2017, as described in “How to Redeem Shares” in the Fund’s Prospectus.
Pursuant to the Plan, if the Fund has not received your redemption request or other instruction prior to the close of business on the Liquidation Date, your shares will be redeemed, and you will receive proceeds representing your proportionate interest in the net assets of the Fund as of the Liquidation Date, subject to any required withholdings. As is the case with any redemption of fund shares, these liquidation proceeds will generally be subject to federal and, as applicable, state and local income taxes if the redeemed shares are held in a taxable account and the liquidation proceeds exceed your adjusted basis in the shares redeemed. If the redeemed shares are held in a qualified retirement account such as an IRA, the liquidation proceeds may not be subject to current income taxation under certain conditions. You should consult with your tax adviser for further information regarding the federal, state and/or local income tax consequences of this liquidation that are relevant to your specific situation.
The Adviser will bear all of the expenses incurred in carrying out the Plan.
Shareholder inquiries should be directed to the Fund at 1-866-724-5997.
Please retain this Supplement with your Prospectus, Summary Prospectus
and Statement of Additional Information for reference.

"They got that way they say by shoveling every spare penny maxing out their retirement accounts during their working years in S&P index funds."
Unfortunately we were much too early for index funds, but we did the shoveling away into American Funds and American Century predominately large cap and balanced funds. An S&P 500 index fund, had such a thing existed, would have worked even better.

I agree with you. At least since the market bottom in early 2009 I have seen scant evidence MFOers have beaten a buy and hold in the Vanguard S&P 500 fund. Or for that matter come remotely close. Lots of international and emerging market investing and love for cash rich funds as well as alternative funds. The latter out of fears of another 2008.
Edit; Yes, I know it has been a relentless move up the past 8 years and 8 years may not be a long enough period to make any kind of judgement. But I know countless passive investors who are now set for life thanks to those 8 years. And isn't that what it is all about??

I'm not disagreeing with your basic conclusions, but I've never really agreed with using the S&P 500 as a benchmark of an investor's portfolio. While I doubt everyone will agree on what would be a better benchmark, I think that a Balance Composite Index would be a closer measurement. Some people consider cash to be part of the portfolio. That would include a rainy day fund, as well as holding cash as an alternative asset. While I'm sure that there are people who are 98% in equity, I doubt the number of investors who do is very high, unless you own part of the family business.

I can't necessarily disagree with you regarding the benchmark. I guess I am just biased from meeting so many retired multi- millionaires in my various hiking groups. They got that way they say by shoveling every spare penny maxing out their retirement accounts during their working years in S&P index funds. And in some of the younger groups I hike with they seem to be doing the same thing and far ahead of where I ever was in my younger days. Which reminds me of an article I saved from the WSJ 7/7/97 titled Waking Up Rich. It detailed how suddenly many investors are finding themselves millionaires from their employee sponsored retirement accounts by being in funds that mimic the S&P.

Hmmm ... I've been writing about individual funds, between FA and here, for just about 11 years. There are two profiles, both from FundAlarm days, the thought of which still makes me queasy. By worst the worst were the Utopia Funds, launched by a small advisor in Michigan. They had go-anywhere portfolios with remarkably low minimum initial investments and reasonable expenses. Five funds, ranked from "Income" to "Aggressive." They were based on a really successful set of separate accounts that thrived because they were small; they picked up bits and pieces of "orphan" investments that larger advisors found too small to be worth the effort. Those ranged from regional micro-cap stocks to called bonds. In practice, the funds started okay then sank into the average-to-bad range. Not "awful," but clearly "bad" when judged by their ability to maintain the targeted risk level. Then, without warning, they closed and liquidated. When I tried to contact them to ask about the decision, I got silence in return.
That was useful to me and, arguably, profitable to you because I stewed a lot about what contributed to the mistake. Part of the lack of a mutual fund record, as opposed to an SMA record and part was that the two managers executing the fund strategies were only assistants on the SMA strategy. Both of those conclusions helped me tighten the criteria for funds I've written about. That played out in the case of Auer Growth (AUERX), where the senior Mr. Auer managed his retirement account to something like a 10:1 advantage over the broad market over some ridiculously long time; the junior Mr. Auer talked him into launching the strategy as a fund. I was, I hope, clearly skeptical about it. A one-star fund with bottom 2% performance followed.
The only queasy interval was Nakoma Absolute Return, which was managed by one of the guys at the U of Wisconsin's famous securities analysis program. These guys cranked out a string of first-tier managers and ran a very successful long-short hedge fund which they eventually offered to the public as a mutual fund. I 'fesseup to the problem with the fund a long time ago (07/11) in a discussion started by Vintage Freak:

The general problem is that Mr. Pickett has been skeptical about the US market for much of the decade, has maintained about as many short as long positions (bad idea in a rising market) and has been repeatedly wrong in security selection. None of which I would have predicted. Indeed, none of which I did predict.

I've become more cautious about hedge fund conversions as a result; my experience is that those often end up as being okay funds but mostly shadows of their former selves. Why? Rekenthaler made a good argument this month: hedge fund conversions are cherry-picked and we don't know anything about the rest of the crop. A hedge fund manager might have 10 funds, nine of which smell like the beach at low tide and one of which has had (maybe, "has lucked into") eye-popping results. The existence of the nine dogs doesn't have to be disclosed so we falsely assume that the one winner is representative of the managers' skills. While that's not always the case - that is, some hedge fund conversions produce reputable mutual funds - it's something that we need to approach with skepticism.
--
I'm mostly able to sleep at night when I consider the other funds we're written about. Mostly. Some have been spectacular successes, which is nice, but I draw more comfort from the fact that most of the managers (including Mr. Cinnamond) have invested heavily in their funds and have done precisely what they said they were going to do. That is, they were disciplined and true to that discipline. Mr. Barbee (AVALX) told you he was going to stay fully invested, at all times, in the tiniest and cheapest stocks in existence. It's been clear from Day One that that's a rocket-and-crash discipline. The fund made a mint during the 2000-02 bear, dipped by 65% in the 2007-09 one, and is beating the competition by over 300 bps since. Its cumulative (i.e. compounded) advantage since launch is huge. That said, I'd never invest in it since I much prefer not to have my long-term returns punctuated by apocalypse. But I'm perfectly comfortable with what we wrote about it.
For what that's worth,
David

Gambling is not a word I want associated with my retirement portfolio.
"Would MFO exists if everyone indexed?"....I wish someone would have forum posted me senseless years ago about the virtues of indexing. It would have made me a lot more money.
I respect your right to invest as you see fit with your money.

I agree with you. At least since the market bottom in early 2009 I have seen scant evidence MFOers have beaten a buy and hold in the Vanguard S&P 500 fund. Or for that matter come remotely close. Lots of international and emerging market investing and love for cash rich funds as well as alternative funds. The latter out of fears of another 2008.
Edit; Yes, I know it has been a relentless move up the past 8 years and 8 years may not be a long enough period to make any kind of judgement. But I know countless passive investors who are now set for life thanks to those 8 years. And isn't that what it is all about??

For the love of. ....!!!!
I agree with the both of you. Just saying keeping talking about it makes no sense. It is not making any difference. A better way to keep people from going active maybe to highlight highly index co-related "star" funds instead so people can see an index fund works as well. Need to change the "psychology" to make a difference.
All newsletters are not publishing buffets comments because they have any interest in getting people to index. M* stock would be not worth 2 cents if everyone started indexing. Every other day someone laments active management and there is an article and then every one has a link to it to get hits. No one listening to you and me.
PS - Please don't say active investing is gambling. Buffet himself is a gambler then.

Gambling is not a word I want associated with my retirement portfolio.
"Would MFO exists if everyone indexed?"....I wish someone would have forum posted me senseless years ago about the virtues of indexing. It would have made me a lot more money.
I respect your right to invest as you see fit with your money.

I agree with you. At least since the market bottom in early 2009 I have seen scant evidence MFOers have beaten a buy and hold in the Vanguard S&P 500 fund. Or for that matter come remotely close. Lots of international and emerging market investing and love for cash rich funds as well as alternative funds. The latter out of fears of another 2008.
Edit; Yes, I know it has been a relentless move up the past 8 years and 8 years may not be a long enough period to make any kind of judgement. But I know countless passive investors who are now set for life thanks to those 8 years. And isn't that what it is all about??

Gambling is not a word I want associated with my retirement portfolio.
"Would MFO exists if everyone indexed?"....I wish someone would have forum posted me senseless years ago about the virtues of indexing. It would have made me a lot more money.
I respect your right to invest as you see fit with your money.

I wonder why all the interest in this Fund especially if you are near or at retirement? It's not very diversified and Bruce takes quite a few gambles.