Reply to @Accipiter:
Waiting to hear what Maurice and others think. Personally, I don't much mind the lengthy "track record" and imagine most frequent posters don't mind either. Am sure there's good arguments on both sides. As it kinda resembles warm stale beer, I'd purge. Just tossed it out as one possible answer to Catch's broader question. Added some hyperbole for good measure. (-: (-:

Hi Accipiter,
Thanks for ringing my bell. I recalled and found the FA archives link I had in the pc favorites list.
>>>>>matt, is this the portfolio mix you have on paper ???Posted by: Fundmentals
Date: November/December 2009
Subject line: Model portfolio design
Body of post:
I am sure many of you have come across the situation of a friend or a family member clueless about investing ask you to help them with a stash of money. The real-life requirements are usually "simple":
1. "Want your help to make some money. I can lose money all by myself"
2. "I can put it in the market for 5 years. Can leave it there longer if it is making money but not if it is losing money"
3. "Don't ask me to do anything more than once a year"
The following portfolio is designed specifically for people that are not
(a)expecting to beat the market
(b)don't want the portfolio to go down much (likely to panic and sell at the bottom if they went down 10% or more)
(c) would like some decent gains - more than what they can get with money market funds, CDs or even just bond funds without which they will not take the risk of investing at all and
(d) don't want to fiddle with it more than once a year.
The Portfolio
Domestic Equity:
5% Forester Value (FVALX) - Large Value
5% Amana Trust Growth (AMAGX) - Large Growth
5% Queens Road Small Cap Value (QRSVX) - Small Value
International/Global equity:
10% Forester Discovery (INTLX) - World Allocation
10% Matthews Asia Dividend (MAPIX) - Diversified Asia/Pacific
Alternate investments:
10% Robeco Long/Short Eq Inv (BPLEX) - Long/short equity
10% Arbitrage Fund (ARBFX) - Merger/arbitrage
15% Hussman Total Return (HSTRX) - Conservative allocation
Bonds
7.5% Managers Intermediate Govt (MGIDX) - Mortgage securities/Govt
7.5% PIMCO Total Return D (PTTDX) - Intermediate Investment Grade Bond
7.5% Weitz Short-Interm Income (WEFIX) - Short-Intermediate Term Investment Grade Bond
7.5% PIMCO GNMA D (PGNDX) - GNMA
Backtested performance
If portfolio invested on 1/1/2008, results as of 11/13/2009:
Total return: +15.05%;
2008 Performance: -4.79%
2009 YTD: 20.84%
Portfolio X-Ray:
Stocks 52.3%; Bonds 38.1%; Cash 9.6%
Stocks US 56.00%; International 44.00%
US equities
Large cap 27.4%; Mid cap 22.8%; Small Cap 49.8%
US equities
Value 36.9%; Blend 53.0%; Growth 10.1%
International equities
Europe 24.1%; Pacific 38.5%; Canada 18.9%; Emerging Markets 18.5%
Bonds
Taxable 78.70%; Uncategorized 21.30%
Credit quality High 78.7%; Uncategorized 21.30%
Duration Medium 20.2% Low 58.5% Uncategorized 21.3%
Costs: Portfolio average 1.72%
Portfolio construction notes:
The portfolio is constructed to solve a basic flaw in traditional portfolio construction. Diversification using high volatility equity funds (even index funds with market volatility) results in deep losses during bear markets as most such equities become correlated and go down together.
Just depending on bond allocation to reduce losses requires primarily allocation to Treasuries as it is the only type of asset that can be depended on to show negative correlation with equities in bear markets. But unlike in the past, Treasuries starting with the current situation of low interest rates cannot be expected to provide much gains going forward so the portfolio may turn out to be too conservative or too aggressive based on what happens in the market regardless of how much is allocated to Treasuries.
As a solution, portfolio picks only funds designed with a strategy to reduce/minimize losses during long bear markets and has some capital protection goals in place. The overall volatility is reduced by depending on each fund to reduce its own volatility rather than depend on lack of correlation to reduce the volatility.
Note that this is not the same thing as picking funds with the highest returns in either bear or bull markets or both. Nor are the returns attributable to some fantastic market timing in picking which stocks to buy and when to sell.
In fact, most of these funds will likely not consistently appear in the top 10% of their class except occasionally. But all of them will have shown the ability to limit losses by reacting to long-drawn down market conditions and make decent gains in long-drawn up market conditions.
In other words, the only market timing they will show will be in recognizing long bear markets as in recognizing the difference between 2008 and 2009, not what happens month to month. None of them try to time tops and bottoms.
Methodology
Portfolio Requirements:
1. Capital protection and lack of volatility extremely important. No long periods of losses. No "wait for 10-20 years or more" excuse for losses.
2. Asymmetric behavior - as much of the upside as possible, as little of the downside as possible
3. Simple portfolio with high quality no-load funds widely available in the main brokerages
4. Only annual tune-ups
5. Total return more important than income
6. No assumption of bull/bear markets for the portfolio as a whole, no forecasted assumptions of economy or any other indicators, doom/gloom predictions, etc.
Concrete requirements:
1. Not more than 12 funds.
2. No single fund with less than 5% allocation or more than 15% allocation
3. Portfolio must be diversified but not necessary to cover all asset/fund classes. Only asset classes that have shown consistent returns without long loss periods and small drawdowns. Riskier assets only within risk-managed funds.
4. No assumptions of correlation or lack of correlation between asset classes going forward but no gross overlaps between funds. Some overlap is fine.
Screening criterion for funds:
1. No-load, ER less than or equal to category average, been in existence for at least 5 years.
2. No losses in 3, 5 or 10 yr (if available) rolling periods (amazing how many asset classes or funds drop out here)
3. Manager has been around for at least the category average
4. Minimum initial purchase not more than $3000 (i.e., minimum not more than $60k portfolio)
5. Best 3 month performance must be better than worst 3 month performance over its lifetime (amazing how many funds you lose with this criterion)
6. Best volatility-adjusted performance (3-yr and 5-yr) in class, not necessarily the best returns.
7. Volatility of each fund on its own must not exceed 10% of total stock market index, total bond index or balanced index as appropriate.
8. Lowest volatility to break a tie all else remaining the same.
9. No bias towards active or passive funds as long as the above criterion are satisfied
10. Allocation percentages based entirely on relative volatility-adjusted returns (3-yr and 5-yr), no ad hoc allocation decisions. Individual fund notes:
end of Part 1

Reply to @Accipiter: The Japaneese date format YYYYMMDD would sort OK and would be human readable and would not require a computation.
If these are kept in a SQL table, adding another column and apply a SORT BY would solve the problem very easily.
I agree, I need to see the code to suggest a solid fix.

Hi, Investor.
I'd uploaded the new fix a couple days ago, but we had a problem with it still reading old versions of the file. Accipiter had an idea for fixing it, which seems to have worked.

The contents of the popup is adjusted to fit much smaller area (I believe it is 360x240, @Accipiter may supply you the latest one). The popup dimensions is still 600x800. Please fix this as it looks rather ugly.

Reply to @Accipiter: "Empirical Research". Story of my life. Lucky that I haven't blown myself up already.
Glad to have been of help... also check out your MFO mail for some other interesting stuff. Ciao/Chow...

Accipiter/OJ/et al,
I recall MSN and/or some other sites that needed a "space" after the "comma" when entering a list of ticker symbols. I suspect this is site specific from programming features, but may have an affect for a particular browser being used with MFO. I recall OJ is using MAC and a version of Firefox.
Just a few thoughts,
Catch

Reply to @Accipiter: My adding fund names with commas worked just fine. Only thing missing for the ones I quickly checked were the MFO links - all listings N/A and I know some of these funds have been referenced here. I know we can search directly here for these, but if not too much trouble it would be great to use Falcon's Eye for search results.

Reply to @Accipiter: Thanks so much for helping to create Falcon's Eye - I love it! I also really like ALL your suggestions listed above and hope they can be approved and implemented.

Hello, all.
I'm back under power, and mostly caught up with my day job. I'll be happy to post new files as they become available. I've sent a note to Accipiter, so that I can make sure I've got his most recent version of each file before I upload it all.
chip

Reply to @Maurice: The contents of the box was based on the original box. Yes, the font of fund name was bigger than the rest (as was in the original box). Accipiter took the idea and made some adjustments. I think it will be much more useful if Chip gets around to replacing it.

Hi Accipiter,
Will check the messages....just returned home and supper prep next.
ALSO, Investor; I too, really like the color palette above, for the linking. Very easy on the eyes and still gets one's attention.
Catch

I agree with Accipiter's note that we need a "tips" page. If anyone has the time and technical expertise to pull one together, I'd be delighted to work with Chip and Accipiter to get it edited, formatted and posted. With the start of the new school year and three new classes to teach, I've been mostly focused on my day job and having something useful to say once in a great while.
The storm-drenched Chip and Accipiter have been working steadily behind the scenes and under the hood, and I'm deeply grateful for both their technical expertise and kindness in sharing it and their time.
David

Reply to @CathyG: Accipiter and Chip get all of the credit for technical improvements to the site, both on the board and in the body. Mostly I just pretend I understand, nod and offer encouragement.

Reply to @Accipiter: This could be something perhaps Vanilla users might find useful. They might incorporate the change into main line.
Alternatively, perhaps it could be made as a Vanilla plug-in. Less intrusive and require less maintenance.

Reply to @Accipiter: I vote for a space between name and the date/time. Also, I think the size of font for title is too large. A slightly smaller font will save vertical space in the list as well and might help avoid some long titles to wrap to two lines (or perhaps the overflow should be cut in the forum list and no-wrap)

Reply to @Accipiter: One thing that would be really neat (for logged in users) is that the newer posts in the thread are indicated by an icon. The board software already knows if there is an unread post in a thread so it could indicate so with yellow "New" in the forum title listing. I often find myself hunting down which host is the new one on a long thread (like this one). The new ones could be in the middle. This will eliminate major major gripe about this board software.

Reply to @Accipiter: At this time, I see problems seems to be fixed.

Howdy,
Now that is a heck of a statement from an Accipiter or a Falcon, eh? :)
Thank you again, too; for your efforts.
Eastern Standard Time at this house indicates I need to hit the pillow.
Take care,
Catch

Reply to @Accipiter: I am using Firefox 5.0 on Windows 7. IE 9 on Windows 7 and Safari 5.0 on OSX also has the exact same behavior. Firefox and IE are latest browsers.
I've checked Firefox 3.6 on OSX and it was OK. But... I think I found the problem. If you look at the HTML generated br tag below is missing closing >. Firefox 3.6 is incorrectly displaying the popup link. Other more compliant and stricter browser are not.
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<br <a onclick="$.popup({}, '<iframe width=\'400\' height=\'300\' src=\'http://www.mutualfundobserver.com/fundlookup.php?fund=MAPIX\'></iframe>')" class="autolink" title="Matthews Asia Dividend Fund Investor Class">MAPIX</a><br />
---