Hi guys: As @hank noted ... Here is how Old_Skeet rolls and manages a consolidated portfolio of 49 funds. My thinking is that if you can't manage what you have then you've got to many funds. Being a prior corporate credit manager for a regional distribution company I had to have a receivable system in place to manage a fairly large customer base. Thus, I developed my sleeve management system to help manage my family's investments. Through the years it has worked fairly well. You can read more about this below.
Sleeve Management System ... Last Revised on 03/01/2019
Now being in retirement here is a brief description of my sleeve management system which I organized to better manage the investments held within mine and my wife's portfolios. The consolidated master portfolio is comprised of two taxable investment accounts, two self directed retirement accounts, a health savings account plus two bank savings accounts. With this, I came up with four investment areas. They are a cash area which consist of two sleeves ... an investment cash sleeve and a demand cash sleeve. The next area is the income area which consist of two sleeves ... a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves ... a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. And, then there is the growth area where the most risk in the portfolio is found and it consist of five sleeves ... a global growth sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty/theme sleeve plus a special investment (spiff) sleeve. Each sleeve (in most cases) consist of three to twelve funds with the size and weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds held along with their amounts. By using the sleeve system I can get a better picture of my overall investment landscape. I have found it beneficial to Xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly for analysis. My positions and sleeves can be adjusted from time-to-time as to how I might be reading the markets through using my market barometer and equity weighting matrix system. The matrix system is driven by the barometer. All my funds with the exception of those in my health savings account pay their distributions to the cash area of the portfolio. This automatically builds cash in the cash area to meet the portfolio's disbursements (when necessary) with the residual being left for new investment opportunity. Generally, in any one year, I take no more than a sum equal to one half of my portfolio's five year average return. In this way principal builds over time. In addition, most buy/sell transactions settle from, or to, the cash area with some net asset exchanges between funds taking place. In addition, my rebalance threshold is + (or -) 2% from my target allocation for both my income, growth & income and growth areas while I generally let cash float.
Consolidated Master Portfolio
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral allocation weightings follow. They are cash area 15%, income area 35%, growth & income area 35% and growth & other asset area 15%. I do an Instant Xray analysis of the portfolio quarterly and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. I have the portfolio set up in Morningstar's portfolio manager by sleeve, by area and the portfolio as a whole for easy monitoring plus I use brokerage account statements, Morningstar fund reports, fund fact sheets along with their annual reports to follow my investments. I also maintain a list of positions to add (A) to, to buy (B), to reduce (R) or to sell (S). Generally, funds are assigned to a sleeve based upon a best fit basis.
Currently, my INVESTMENT FOCUS is to increase my portfolio's income stream through positioning new money into income generating assets while letting equities run on the high side to their upper threshold limit.
Target Asset Allocation (Balanced Towards Income): Cash 20%, Income 40%, G&I 30% & Growth 10%
Consolidated Master Portfolio Asset Allocation: Cash 16%, Income 39%, G&I 32% & Growth 13%
Rebalance Action Needed: Decrease Growth Area 1% and Increase Income Area 1%
CASH AREA: (Weighting Range 10% to 20%)
Demand Cash Sleeve ... Cash Distribution Accrual & Future Investment Accrual
Investment Cash Sleeve ... Money Market Funds: AMAXX, GBAXX, DTGXX, PCOXX, CD Ladder(A) &
Cash Savings(A)
INCOME AREA: (Weighting Range 30% to 40%)
Fixed Income Sleeve: CTFAX(A), GIFAX, LBNDX(A), NEFZX, PONAX(A) & TSIAX
Hybrid Income Sleeve: APIUX, AZNAX, BAICX, DIFAX(A), FISCX(A), FKINX, ISFAX(A), JNBAX, PGBAX & PMAIX
GROWTH & INCOME AREA: (Weighting Range 30% to 40%)
Global Equity Sleeve: CWGIX, DEQAX, DWGAX & EADIX(A)
Global Hybrid Sleeve: CAIBX, TEQIX & TIBAX
Domestic Equity Sleeve: ANCFX, FDSAX, INUTX(A) & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, FBLAX, FRINX(A), HWIAX & LABFX
GROWTH & OTHER ASSET AREA: (Weighting Range 10% to 20%)
Large/Mid Cap Sleeve: AGTHX, AMCPX & SPECX
Small/Mid Cap Sleeve: AOFAX, NDVAX & PMDAX
Global Growth Sleeve: ANWPX, NEWFX & SMCWX
Miscellaneous, Specialty & Theme Sleeve: LPEFX, PCLAX & PGUAX
Ballast & Spiff Sleeve: No position held at this time.

I sold my large position last week. Vanguard had to contact them one or two times because they did not report back.

My apologies for forgetting that you too had invested in the fund. Glad to hear you've managed to escape intact.

huh, no mention of the 'value' auto-churn strategy for SP500 that, so far as I can see, outperforms at every interval for the last ~6.5y
iow a non-secret for beating the market, or #7
graph CAPE vs FXAIX since fall of 2012 and any sub-period thereafter

Yeah, DSE_X is becoming our only equity holding, >>50% of everything, and seems to do little worse in drops than IVV, say.
Take a look yourself via MFOP at DSEEX, TRBCX, IVV, and CAPE for the last 5y, their close UI and other measures (IVV notably lagging in growth of course).
You will almost certainly not go wrong w/ TRBCX if you hang in and don't track during slumps. (I may move some DSE_X moneys to it in the next slump, not sure; as I say, I'm trying to fight such excess or at least bootless diversification impulses, to return also to such old faves as YACKX, JABAX, PRBLX, FLPSX, TWEIX, plus some SC.)

Actually, CAPE is wrong. CAPE can be off by years so why use it. Sure, eventually stocks will be down at some point, they always are. There is no indicator that can predict when prices reach tops or bottoms so the best way IMO to use a mechanical method.
The easiest way is using asset allocation rebalance. Suppose you have 60/40 stock/bonds, when they are off by 5% just rebalance. No need to listen or follow any adice/experts/indicators.
I use the following for years since portfolio preservation is the most important to me because I just need 4.5% annual return for the next several decades.
The only indicator that works in real time, 100% guarantee, must relate to the price. Here is my simple formula. When the price of the SP500 goes under 50 days MA(moving average) and stay there several days I reduce my stocks % to under 5%, when the price goes under 200 days MA my stocks % to under 2%. Then the reverse.
So, how did the above work last time? Since the top at 09/2018 to today, my portfolio is up more than 3%. Last year, when the SP500 lost 20%, my portfolio lost just -0.9%. My portfolio volatility on the worse days was only 5-10% of the SP500.

This article discusses why the author thinks an inflection point has been reached that will begin to draw the P/E ratio back down towards long term historic norms. The focus on interest rate trends ties into the argument Gundlach makes in a video I posted a few minutes ago....

Here’s the problem that the CAPE highlights. Earnings in the past two decades have been far outpacing GDP; in the current decade, they’ve beaten growth in national income by 1.2 points (3.2% versus 2%). That’s a reversal of long-term trends. Over our entire 60 year period, GDP rose at 3.3% annually, and profits trailed by 1.3 points, advancing at just 2%. So the rationale that P/Es are modest is based on the assumption that today’s earnings aren’t unusually high at all, and should continue growing from here, on a trajectory that outstrips national income.It won’t happen. It’s true that total corporate profits follow GDP over the long term, though they fluctuate above and below that benchmark along the way. Right now, earnings constitute an unusually higher share of national income. That’s because record-low interest rates have restrained cost of borrowing for the past several years, and companies have managed to produce more cars, steel and semiconductors while shedding workers and holding raises to a minimum. Now, rates are rising and so it pay and employment, forces that will crimp profits...The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably high profits are artificially depressing the former and that profits are bound to stagnate at best, and more likely decline. The retreat appears to have already started.

https://finance.yahoo.com/news/cape-fear-bulls-wrong-shiller-151355864.html

https://www.schwab.com/public/schwab/investing/investment_help/investment_research/etf_research/etfs.html?path=%2FProspect%2FResearch%2Fetfs%2Foverview%2FoneSourceETFs.asp%3Fsymbol%3Dundefined
Above is the no cost ETFs from Schwab.
Can anyone explain why they use managed mutual funds that cost you 1-2% to own when the same or likely better returns can be had with these no commission index funds? The selection is huge. I own managed funds but I often wonder why.
There are many here that collect 30, 40, 50+ mutual funds. That just has to dilute any manager affect. Wouldn't it? Why do we continue to believe we get better returns from a collection of higher cost investment vehicles when most all data suggests otherwise?
In saying that, I argued for a long time managers could "steer the ship" for a smoother, higher return ride. I don't believe it anymore. I have not totally jumped on the ETF band wagon myself but I may. I still believe for very specific funds a manager or formula can add value, for example I wouldn't give up the management at PRWCX just yet or the secret ingredient in the CAPE fund DSENX. But other than that I think I have to break away from this paradigm in believing managers can beat these no cost ETFs.
What do others think? What are the reasons to use managed funds over free ETFs?

I went and graphed Oct-Dec $10k change for CAPE, DSEEX, SP500, low-vol LC ETFs, plus DOD, MMTM, QUAL, SCHD, VIG.... And yeah, everyone has already beat me to the point: DSEEX and CAPE did not do any better, to the contrary, did somewhat worse.
(I too have wanted to use CAPE for Merrill no-cost trading but cannot.)
I was v impressed to see how comparatively well TWEIX, YACKX, and PRBLX did during that significant slump. Yay for active management sometimes.

@Sven, DSENX is not a balanced fund (as thoroughly discussed in past discussions here. msf I believe had some good info on that point) so that comparison you gave ends up being apples to oranges. I suppose it could be called a "hybrid" type fund for whatever that means. For me it's just a large cap fund that has a really good return record and does better than the index, whether that's the LC Value or S&P 500 index. And what is meant by your comment that the 2018 drawdown is sizeable? In 2018 per M* the fund lost -4.3% while the LC value index lost -8.5% (S&P500 was -4.4%). It is a little more volatile if you are basing that on the STD, but does that matter if your holding the fund long term and not trying to get in and out to time the market? Higher STD is a bad thing if you don't hold on to your funds. In any case, there is nothing to say this fund is significantly more risky than your typical large cap fund. Take a look at the upside/downside capture ratio. Again DSENX has more upside than the S&P500 index and less downside. It blows the LCV index out of the water by that measure.
@MikeW, didn't really pay much attention before, but per M*, DSENX lost -15.6% and in comparison the S&P500 lost -13.5% in the 4th qtr. The CAPE ETF also lost about the same as DSENX so apparently it relates to the S&P500 low valuation sectors the CAPE formula was invested in at the time. It is not a low-volatility fund if that's what you are looking for.

Old Skeet provided a good analysis. I too hold DSENX for awhile. The 2018 drawdown is sizable as indicated by Derf. The fund 2018's total return was -4.0% while the 60/40 balanced index lost -2.9%. The international version, DSEUX, performed even worse and yielded -12.9% in 2018. The only saving grace of these tow CAPE-oriented funds is their large bond positions that provide the monthly dividend.
Interesting products from Gundlach but the risk is significant. Perhaps TRP Capital Appreciation would be a better vehicle with respect to both risk and reward.

I hold both CAPE and DSENX, using the former for trading when the price is right. Up until the market drop late last year, performance of the two vehicles was similar; however DSENX dropped much more than CAPE during he turmoil. I used M*'s chart function to compare performance, so maybe I missed something important.

David, why would you need a CAPE stand in?
You turned me on to DSENX years ago and it remains one of my top holdings. FDSAX seems a poor substitute for DOD and it hasn't even kept up with the S&P500 let alone DSENX. Some times more is less. Maybe not even sometimes.

CAPE, again, has outperformed DOD the last 6/5/4/3/1y periods. (Slightly.) I shoulda considered it when looking for a CAPE standin, instead of QUAL and MMTM and a few others. DOD sure has a higher UI, though, and by some degree.

I haven't looked recently at the holdings data for TWEIX and FLPSX, and doubtless the study considered such; but I do wonder if CAPE at least fits relative, perhaps not 'true', value criteria. It's supposed to, I believe.

all noted, tnx
The thing is, this was not ever supposed to be a 'brokerage attached to a bank', but the bfd result of a long-established independent brokerage marrying a big ol' bank, with all the joy-joy of each and both...
I forgot about CAPE not paying dividends (etn meaning debt instruments) --- so all the DSE_X divs come from the bond sauce. Huh.
Yeah, the end-month fractional sweep thing is also nuts.
BoA credit cards don't need ME/ML brokerage, I think, though you probably get extra-nice treatment or something if you have a lot of bucks at the brokerage.

Yup, they are oddly unsophisticated, and in important ways, I think.
If ML were not hardwired w/ BoA (where we have checking / savings / mortgage / heloc / 3% credit card sort of), and above all did not have free trading, and did not pay so much for accounts transferred into them (I guess the same as other places, turns out), I would move everything back to Fido.
Also, fwiw, ML's accounts aggregator, My Financial Picture, is invariably accurate, while Fido's has been sketchy for about a decade, even as they changed from yodlee to other data feeds, and earnestly promise improvement every other month. I have a dozen emails about FullView and My Portfolio update problems. Still laggard and/or wrong, almost every night.
There is worse, too, in just trying to ascertain whether you can buy a given fund --- it shows availability right up to the moment you make the actual purchase attempt. And the capper for me is their restriction list, already covered in this forum, notably for me CAPE unavailability.

While 40% might be a tad high, I agree more with @msf here. Bogle is generally a lot of “bluster.” I doubt even he agrees 100% with everything he says. (But I’ll acknowledge his contributions to mutual funds / investors).
The biggest reason I can think of to diversify equity holdings more outside the U.S. is the long term damage being done to our competitive position and democratic institutions by the current occupant of the WH. Unfortunately, to a degree he’s a symptom of deeper problems in the country that aren’t going to disappear overnight. I’ve tried to increase international exposure by bolstering my % in RPGAX. And it hasn’t escaped my attention that domestically oriented DODBX has a significant amount of foreign exposure (somewhere near 20%). Recently increased my stake in that one.
I’ve always clung to a healthy dose of foreign currencies / bonds for a somewhat different reason, If some nasty inflation (actually Dollar deflation) were to emerge down the road, the dollar would weaken against foreign currencies and foreign currencies would increase in relative value. I can’t predict that will happen. But I like having the insurance of some foreign currency exposure anyway.
Back to equities - About the time equities in one region or another begin looking bleak is, IMHO, a good time to begin averaging in. Europe appears “on the ropes” now due to BREXIT & related issues. And China just had an awful year. Good places for long term investors to look for possible value. EM as a group? If younger, I’d make a spec play on the beaten up EM sector. But over the very long term most of my international exposure would be with the less risky / volatile developed markets.

A report of "Harold Evensky’s final presentation on investing."
https://www.advisorperspectives.com/articles/2018/09/26/the-investment-world-according-to-harold-evensky
Very straightforward, nothing earth shattering, though several points I've seen elsewhere are included here:
"Evensky cited the Shiller CAPE ratio, which is 31.1 versus its historical average of 16.2. 'It’s a very expensive market,' he said."
Maybe not as expensive as three months ago when this presentation was made, but still far from cheap.
"If a manager cuts turnover from 100% to 50%, the marginal reduction in taxes is negligible, Evensky said. Managers need to be closer to 10% turnover to be thought of as tax-efficient."
Which is why I may fret about Dick Strong-type churning, but don't obsess over "moderate" turnover. Though turning over an entire portfolio within a year still isn't "moderate" from other perspectives.
“'Our clients don’t need cash flow,' Evensky said. 'They need real income.' The problem with dividends is that they are not consistent; interest is also volatile, as bonds are subject to interest rate movements. 'Our clients need reasonably consistent income,' he said".
Hence a focus on total return.
“'we tend, particularly in planning, to focus on the probability but ignore the consequences. That can be really dangerous in planning.' If you know the probably of success is 95%, the consequences of failure still matter, he said. We need to plan, for example, for additional longevity of our clients."
Which is why I continue to be concerned about simulations showing 95% success that don't also tell me how bad the results are in those other 5% (miss by just a little, or spend golden years of poverty?)
Evensky has changed his outlook about annuities, which he once derided as an inappropriate vehicle for his clients. Single-premium immediate annuities (SPIAs) and deferred-income annuities (DIAs) will be the single most important tool in the coming decade, he said, mostly because their fees have come down

@Derf
don't see any comment from her except quoting him, and I sure love his 'lathered in derp' locution
yes, almost everything looks oversold, and if I had any cash I would be buying bigtime, not only CAPE and ARKK but PCI and now PDI

FYI: You might expect a 70-year-old mutual fund with $74 billion in assets to be set in its ways.
But the Franklin Income Fund’s holdings have gone through big changes in recent years. Ed Perks, the fund’s lead manager, described those shifts as well as the uncertain investing landscape of 2018 and what he sees ahead.
The Franklin Income Fund FKINX, -0.93% FRIAX, -0.94% was launched in August 1948. The fund’s objective is to maximize income while also seeking opportunities for capital growth, with a diversified, actively managed portfolio of stocks, bonds and convertible securities.
In an interview on Dec. 18, Perks said the fund was about evenly allocated between fixed-income and equity investments. At the beginning of 2018 the allocation was about 40% fixed income and 60% equities. Perks said that this year the fund’s management team has “softened its overall investment posture,” in order to “reduce total expected portfolio risk going forward.”
Regards,
Ted
https://www.marketwatch.com/story/there-will-be-plenty-of-opportunity-for-investors-in-2019-says-manager-of-74-billion-franklin-income-fund-2018-12-21/print
M* Snapshot FKINX:
http://performance.morningstar.com/fund/performance-return.action?t=FKINX&region=usa&culture=en_US
Lipper Snapshot FKINX:
https://www.marketwatch.com/investing/fund/fkinx
FKINX Is Rank #21 In The (30%-50%-E) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/allocation-30-to-50-equity/franklin-income-fund/fkinx