Each year around tax time I mention this tidbit to others who are investing. Are you getting a large refund from Uncle Sam this year? If so, why?
I hear stories every year of people and families getting large refunds after they do their income taxes. I say why give your money to the government so they can hold it for a year and then give it back to you? Adjust your W2 so that you break even or come close. Then, by investing that same amount back into your retirement or personal investments, you will be miles ahead. People tend to spend their "windfall" each year.
It might take a few tries to get to that magic number. I took multiple W2 forms and over a time frame of several pay periods I was able to do it. One year I got a $5.00 refund. ( rounded off). Even if you have to pay a small amount, it is still worth it. As an example, if you get a $2000 refund this year and get paid every two weeks, divide 2000 by 26 (# of pay periods in a year) and you come up with almost $77 a paycheck. That comes to just over $166 a month. Over the years that extra amount will grow immensely.
I hope this helps someone on this board to increase their investing power money wise.
John

http://www.sec.gov/Archives/edgar/data/1293967/000089418914000157/primecap_497e.htm
PRIMECAP ODYSSEY FUNDS
--------------------------------------------------------------------------------
SUPPLEMENT DATED JANUARY 13, 2014 TO THE
PROSPECTUS DATED FEBRUARY 28, 2013
--------------------------------------------------------------------------------
This supplement provides new and additional information that affects information contained in the Prospectus and should be read in conjunction with the Prospectus.
Effective January 20, 2014, the PRIMECAP Odyssey Aggressive Growth Fund (the “Aggressive Growth Fund” or “Fund”) will be closed to most new investors. PRIMECAP Management Company (“PRIMECAP”), the Fund’s investment advisor, believes that it is in the best interest of the shareholders of the Aggressive Growth Fund to reduce the amount and pace of investments into the Fund. In addition, in most cases you will not be permitted to exchange shares of another PRIMECAP Odyssey Fund into the Aggressive Growth Fund unless you are already a shareholder of the Aggressive Growth Fund.
You may continue to purchase shares of the Aggressive Growth Fund, or open a new account to do so, only if:
- You are an existing shareholder of the Aggressive Growth Fund (either directly or through a financial intermediary) and you:
o Add to your account through the purchase of additional shares;
o Add to your account through the reinvestment of dividends or capital gain distributions;
o Open a new account that is registered in your name or has the same taxpayer identification or social security number assigned to it as an existing Fund account (this includes UGMA/UTMA accounts with you as custodian). This applies only to individuals or organizations opening accounts for their own benefit. It does not apply to institutions opening accounts on behalf of their clients, except as follows: institutions that maintain omnibus account arrangements with the Aggressive Growth Fund may purchase shares of the Aggressive Growth Fund in their omnibus accounts for clients who currently own shares of the Aggressive Growth Fund through such accounts.
- You are a separately managed account client of PRIMECAP.
- You are a participant in a qualified defined contribution retirement plan (for example, 401(k) plans, profit sharing plans, and money purchase plans), 403(b) plan, or 457 plan that invests through existing accounts in the Fund (each, a “Plan”). A Plan may open new participant accounts within the Plan. IRA transfers and rollovers from a Plan can be used to open new accounts in the Aggressive Growth Fund. PRIMECAP also may selectively allow new retirement plan accounts to invest in the Fund, but it reserves the right without further notice to restrict purchases by retirement plans that did not previously own shares of the Fund.
- You are a current trustee or officer of the Aggressive Growth Fund, or an employee of PRIMECAP, or a member of the immediate family (spouse or child) of any of these persons.
- You are a client of an investment advisor that invests client assets in the Funds.
Once you close an account with the Fund, the Fund will not accept additional investments from you unless you meet one of the specified criteria above. PRIMECAP reserves the right to: (i) make additional exceptions that, in its judgment, do not adversely affect its ability to manage the Aggressive Growth Fund; (ii) reject any investment or refuse any exception, including those detailed above, that it believes will adversely affect its ability to manage the Aggressive Growth Fund; and (iii) close and re-open the Fund to new or existing shareholders at any time. You may be required to demonstrate eligibility to buy shares of the Aggressive Growth Fund before an investment is accepted.
The PRIMECAP Odyssey Stock Fund and PRIMECAP Odyssey Growth Fund remain open to all investors, and you may purchase shares of those Funds at any time.
* * * * *
Please retain this supplement for future reference.

Reply to @hank: >>>>On the other hand, I am still haunted by the faces and voices of long-acquainted friends and neighbors relating to me their heart-wrenching stories of 50% or greater losses of retirement savings over a very short (18 month) period back in '08 & '09. One particular recollection is of a fellow who had come to think of high yield bonds as a lot safer than equities and had piled most of his net worth into a high yield fund. The good ones dropped 40-50%. Their less conservative peers fell 60-70% over that period.<<<<<
Unless your friend went into a closed end high yield bond fund, and only an idiot's idiot would pile most of their net worth into a closed end junk fund, the above is a patently absurd statement. First of all, on a risk adjusted return basis, junk bonds are safer than stocks. And the actual facts are, in the open end junk bond fund category in 2008 they lost on average 26% after being down 34% at their nadir in early December 2008. That was a once in a lifetime bottom followed by the greatest bull ever in junkland and by late summer of 2009 they were hitting all time historical highs which they have continued doing to this very day.

Reply to @mikes425: Hi M425 - Guilty as charged. While I did read your OP when it went up, it had been there quite a while before I responded. Wasn't sure of your age than - but my responses are always written with the broader MFO populace in mind anyway. I actually have an aversion to giving member-specific advice. In the end, it's your skin in the game and you need to consider the diversity of ideas make the final call.
Everybody's different. So, don't take anybody's advice as necessarily right for you. From age 25 until around 50 my fund-appointed "adviser" had me in just one fund, a growth fund, TEMWX. In retrospect, his choice served me very well. My life was much busier than and I was comfortable with that one very good fund. Rarely even checked the value. After 50, I grew increasingly cautious, dropped the advisor, began studying-up on investing, and started diversifying widely. This new approach suited my age and conservative nature - though I've made more than a few mistakes along the way.
I respect Ted and the others who hold very equity-intense allocations, even at their advanced ages. On the other hand, I am still haunted by the faces and voices of long-acquainted friends and neighbors relating to me their heart-wrenching stories of 50% or greater losses of retirement savings over a very short (18 month) period back in '08 & '09. One particular recollection is of a fellow who had come to think of high yield bonds as a lot safer than equities and had piled most of his net worth into a high yield fund. The good ones dropped 40-50%. Their less conservative peers fell 60-70% over that period.
Regards, hank

I lurked on Fund Alarm and visit MFO a couple of times a week. All of our mutual funds are between Vanguard and TRP. The only which is not in our Roth IRA is the Star fund as I use this for a savings account because CD's don't pay much. My wife and I are both 51 and contribute the max amount to the IRA's each year by Dollar Cost Averaging. We both contribute to 401K up to match. I'm retired from the Air Force so I receive a pension check each month and we both work full time. Our portfolio returned 7.72% in 2013 and I do all my own investing. When the market turned down in 2008 and later, I continued to invest in these funds and had I think in my view a good end of year reinvestment for 2013 for St & Lt Cap gains and dividends.
Looking for feedback and possible changes that I could make on my own to increase growth. According to different retirement calculators, I am on the right path to ensuring I have money when it comes to retirement age, whenever that may be. The numbers represented is the percentage of the portfolio where the money is allocated.
Kind Regards John.
PRLAX 4 TRP Latin America
VFSVX 3 Vanguard FTSE All-Wld ex-US SmCp Idx Inv
VGXRX 4 Vanguard Global ex-US Rel Est Idx Inv
TRAMX 6 T. Rowe Price Africa & Middle East
VEMAX 3 Vanguard Emerging Mkts Stock Idx Adm
VEUSX 4 Vanguard European Stock Index Adm
VHDYX 5 Vanguard High Dividend Yield Index Inv
PRMTX 5 T. Rowe Price Media & Telecommunications
PRGTX 5 T. Rowe Price Global Technology
VGSIX 4 Vanguard REIT Index Inv
PRNEX 8 T. Rowe Price New Era
PRHSX 9 T. Rowe Price Health Sciences
PRWCX 4 T. Rowe Price Capital Appreciation
VWELX 5 Vanguard Wellington Inv
VGSTX 6 Vanguard STAR Inv
VWINX 8 Vanguard Wellesley Income Inv
PRSVX 5 T. Rowe Price Small-Cap Value
PRFDX 4 T. Rowe Price Equity Income
VMGMX 4 Vanguard Mid-Cap Growth Index Admiral
VGAVX 4 Vanguard Emerg Mkts Govt Bd Idx Admiral

Reply to @cman: You right cman, with investor like Mike I'm going to invest more money in asset management companies. Mike doesn't have a portfolio, as Junkster, stated he's a a fundaholic. Mike, if want to have a more enjoyable retirement, get off the porch and hunt with the big dogs. Reduce your asset allocation to fixed- income to 30% and increase equities to at least 70%. Long-Term Stocks vs. Bonds, Stocks Win !!!
Regards,
Ted
http://bonds.about.com/od/bondinvestingstrategies/a/Stocks-And-Bonds-Year-By-Year-Total-Return-Performance.htm

Wow, I can just see smoke streaming out of every pore of Ted as he sees this portfolio. :-)
Mike, you need to roughly figure out your financial needs for retirement and how much it needs to appreciate or not from what you have now and where you need to be factoring in your savings, income needs, etc. Use one of the free online retirement calculators to get an idea without having to specify a portfolio. That will give you a goal for roughly how much performance you need from the portfolio. The portfolio needs to be constructed with respect to those goals. Otherwise suggestions might not be very relevant to you. Unless you want to be an active tactical allocation investor, you don't need this many funds or most of those funds. Your beta exposure to equities may not be sufficient to meet your needs which we do not know.

H appreciate any opinion on this. I consider myself moderate-conservative and have been
maintaining a portfolio of funds/ETFs/CEFs with an occasional FA's input for about five years after being in and out of managed advisory relationships. I'm 55, self-employed without debt, with an aim to at least move into a semi-retirement mode in maybe 5-7 years -- and
my income fluctuates anywhere from mid 5-figures to low 6-figures as a freelance performer.
My asset allocation is roughly as follows:
US Stock: 20%
Foreign Stock: 10%
Bond/Fixed Income 56%
Cash 12%
Other Stuff: 2%
Growth has been somewhat flatline in recent years with the heavy bond weighting
and I'm interested in how i might improve returns with some possible alternatives
in the Fixed Income sector(s).
The Bond/FI breakdown is as follows - in order of percentage size of total portfolio:
14% Vanguard Short Term/VFSUX
8.9% Vanguard Interm-Term /VFIDX
(7.7% Cash)
3.9% SPDR Nuveen Barclays Build America Bond ETF(BABS)
3.5% Vanguard Short Term Bond VCSH (ETF)
3.3% Vanguard High-Yield Bond VWEHX
3.3% Blackrock Credit Allocation Income BTZ (ETF)
2.7% Vanguard TIPS VIPSX
3.2% Alliance Bernstein Income ETF (ACG)
2.8% RidgeWorth Seix Floating RT Hi Inc. SAMBX
2.2% Eaton Vance Short Duration DIversified EVF
1.9% Fidelity Floating Rate Hi Income FFRHX
1.8% Schwab TIPS ETF(SCHP)
1.7% PowerShares Preferred Stock PGX (ETF)
1.7% MS Emerging Mkts Debt MSD (ETF)
1.5% Nuveen Div.Advantage -(Muni Nat'l Long) NZF (ETF)
0.9% SPDR Barclays Cap Convertible Secs CWB
I'm excluding the equity side of the Portfolio. Obviously a lot of small positions
and these are spread across a taxable account, an I-401k, SEP-IRA and Roth -
largest positions are in Taxable.
I realize this is alot of holdings but overall, expense ratio average is low.
Aside from looking at ways I might do some consolidation to reduce the
quntity, I'm looking to get a sense of any 'red flags' that might jump out as
being problematic - or vulnerable to principal erosion in a rising interest rate
environment. Many of these funds have served their purpose well as a hedge
against equity volatility in past years but i question whether some of them are
still valid if bonds are likely to do little or nothing performance-wise for one or
more years to come.
If so, my thought is, why not explore a strategic income fund as a substitution
for one or more of these positions to at least have a shot at better than flat or negative returns.
I know this is a little messy without being able to simply provide a neat pie-chart graph
per se. In any event, would welcome any perspectives and thanks for taking time to
read through all of this.
Best Regards,
Mike

Reply to @cman:
Actually it is an interesting story, but one that is getting all to common in the mutual fund industry. Hopefully I get this correct:
UMBIX was created by U.S. Trust back in the 80s, advisor to Excesior Funds with David Williams as manager. I think in 2007 US Trust was sold to Schwab who then sold it to Bank of America and became part of Columbia funds who then sold off Columbia Funds. Prior to the meltdown of 2008, the fund had an incredible record, beating the S + P handily over 15 years. Williams announced his retirement about 2 years before he left, and I think half of the AUM left too. Pope became co manager and transitioned Williams out.

Perhaps thinking not so much about how it's doing as much as why it's doing it would help?
In his fall letter, Jeff says:

The Fund ended the quarter with 86% in stocks, 2.6% in bonds and 11.4% in cash. Our stockholdings gained 4.81% for the quarter and 19.5% year to date, trailing Standard & Poor’s 500-stock index’s 5.24% for the quarter and 19.79% year to date.

So, in part, it looks like his stock-picking is pretty solid. Part of the lag is asset allocation: 82% equities with about a 2:1 overweight in international. In rough terms, 70% in the top performing asset class (US equities) versus 90% for peer funds. And even within US equities, he maintained a distinctively conservative bias: major overweights in two defensive sectors (consumer and health care) and major underweights in four economically sensitive sectors (financials, tech, energy and industrials).
Which the manager describes as a "conservative stance befitting the fact that the fund’s manager has his entire retirement portfolio riding on Auxier Focus."
So, where is he staking his retirement. He highlights two value-oriented themes: European telecoms (he's betting that a six-year downturn isn't likely to be an eight-year one) and restructurings. Of the latter he says:

We also are finding opportunities in companies that break up and “shrink to grow.” Spinoffs tend to re-energize and focus resources. We see mounting pressure for many of the larger companies in our portfolio to generate material shareholder value by spinning off divisions (e.g. Procter and Gamble, Johnson and Johnson). As the market prices go higher, we tend to gravitate more to investments that are tied less to the supply and demand of the market and more on events where managerial actions and acumen can build value even in a declining market.

In the long term, that "protect the downside" strategy has worked ("Since inception in 1999, the Fund’s cumulative performance is 167%, almost triple the S&P 500’s corresponding 56%, despite the index’s much riskier 100% stock allocation vs. an average of 77% for Auxier Focus"). His absolute returns in the three years with the worst relative performance (2011, 12, and 13) have averaged 14.2%.
So the question becomes, is Jeff doing what you hired him to do? And is he doing it well enough at meet the goals you set in your investment plan? If both are "yes," I guess I'd be comfortable here. If both are "no," I guess I'd be uncomfortable. If I had one "yes" and one "no," I suppose I'd renew my due diligence efforts: contact the fund, reread the commentaries, think about the portfolio's evolution, and try to make a thoughtful decision.
For what that's worth,
David

I found that Fidelity allows to invest in BDMIX in certain retirement plans accounts (such as 401k). In fact, I checked it experimentally, and it worked, though I paid the TF $50, but it is much better than the load. If you want to try it, just do it, some Fidelity representatives do not know it.

Only the Bloomberg link worked for me.I don't make close to a million /year but it seemed like a very good deal especially between retirement and age 70.5.I did think the advice to split the 2010 tax over two years was wrong For me at least it worked out better to convert in 2010 2011 2012 and 2013 never really raising my tax bracket much.

Reply to @bee: Good luck to you Bee. You could be a big winner with USAGX. It's good you applied rules to trades.
But, not for me... As I get closer to retirement, I decided contrarian bets like PM's are not my cup of tea. I would rather put small bets on sectors that have already started to give positive return, momentum investing. I did that with health care, PRHSX, and started buying global technology the last couple months, PRGTX.
Hope you win!

Reply to @slick: Glad to hear you are finding the tool useful. We use VIG in our taxable account and VDIGX in tax deferred accounts.
Years ago I manage my parent's retirement accounts through Merrill Lynch, but we moved to Vanguard for many reasons. Now we are paying less than 30% of the total in fee.

Reply to @lord_nelson: GABEX is slightly higher, though like everyone now it tilts toward nonmega. It has been higher than its current $30B market cap in the past, though. You might want to check it out. You might also look into JENSX, $46B mc, though it is too poky for me even in my new retirement pokiness. Also v low turnover.

I do not know if this has any value for you, but it did for me. I wanted to see how my portfolio holdings did compared to its benchmark in my retirement accounts, which account for 62% of my holdings. There are no bonds in this listing, since all of my bonds are in my taxable account, all munis. So basically this portfolio is 100% equities (I did not go into each fund to determine its bond exposure) There are 15 funds, plus cash, FPACX, MWLIX, OSTIX held in taxable account along with 5 strong dividend stocks. Now, I did not have all of these all funds and stocks throughout 2013, but did have some of them. I did inherit a portfolio, combined it with mine and made changes throughout the year. Took profits on some, loss on others (like GLD) and dollar cost averaged in for the stocks and funds. I know one year does not give me a definitive picture, but it does tell me how my porfolio works together, at least for 2013. I do not anticipate major changes in 2014 except for selling half of ABEMX and putting it into WAIGX and taking profits or losses in a few stocks when the time comes. I have stop losses on my best ones. You may notice some duplication, such as VIG and VDIGX, but could not add to the fund at Meriil Lynch, so bought its cousin.
I also calculated if I had this portfolio in SPY how it would compare. No doubt it would have done better, but not by as much as I thought. I doubt anyone on MFO would have put everything into the S + P 500, but it was interesting to calculate.
If so inclined, would love to see some others and how they did. I am very pleased with my results, as my retirement portfolio gained 20% overall in 2013. How did you do?
M* = Mornngstar 2013 return
bench= benchmark
Im afraid this did not post as a table as I expected, hope you can make sense of it :) If someone knows why, let me know.
stocks- IRAs , ETFs IRA M*ret. bench difference
MMM 3M 54 43 11
AMLP Alps Alerian MLP 18 23 -5
BBBY Bed Bath Beyond 44 43 1
BGS B + G Foods 24 28 -4
COST Costco 22 20 2
DTN Wisdom Tree Div ex fin. 28 30 -2
DVY Ishares Select Div 29 32 -3
F Ford 22 31 -9
GILD Gilead 104 58 46
JPM JP Morgan Chase 36 23 13
KMP Kinder Morgan Partners 8 25 -17
LECO Lincoln Electric 48 27 21
MCD McDonalds 14 30 -16
PJP Powershares Pharma 56 45 11
PKW Powershares Buyback 46 32 14
RHS Guggenhein Cons. Staples 33 27 6
TESS Tessco Technologies 85 42 43
TRV Travellers Insurance 29 32 -3
UTX United Technologies 41 43 -2
UNP Union Pacific 36 41 -5
VIG Vanguard Div Appreciat. 27 32 -5
VLO Valero Energy 64 37 27
VNQ Vanguard Real Estate 2 2 0
XLP Sector Spyder Consumer 26 27 -1
Funds IRAs
ABEMX Aberdeen Emerg Mark -7 0 -7
ARTGX Artisan Global Value 31 25 6
FBTIX Fidelity Biotech 64 48 16
FRUAX Franklin Utilities 14 18 4
FSCRX Fidelity Small Cap Disc 38 37 1
ISTIX Ivy Tech and Science 52 35 17
MMUIX MFS Utilities 20 18 2
ODVYX Oppenheimer Dev Mkts 9 0 9
OAKIX Oakmark Intl 30 23 7
OYEIX Oppenheimer Eq Inc 32 32 0
PHSZX Prudential Jenn Health 56 48 8
SMGIX Columbia Contrarian 36 32 4
VDIGX Vanguard Div Growth 32 32 0
VPCCX Vanguard Prime Cap 36 32 4
WAGTX Wasatch World Innov. 34 25 11

Reply to @cman:
>> What role does a fund like this play in your portfolio?
Being newly semiretired I have cash plus three buckets, so called, corresponding to active live brokerage accounts, traditional IRAs, and Roths. I foolishly play with the cash just a little bit (tips from rich friends, dip purchases) in a bull market; I use long/short funds plus balanced funds in the brokerage acocunts; and the two retirement account sets, trad and Roth, are all equity funds with as much diversification and downside protection as I can scope out, hoping they stay predictive. So the short answer is I use RGHVX and similar in small amounts as a flavor of balanced fund for moneys I will be needing in perhaps 3 years.

Hi MJG. As an RIA, I have always disliked the Assets Under Management as a way to bestow competence. You are exactly right. $2 billion vs. $350 million has no bearing on the competence of an advisor. Unfortunately, using rate-of-return information is problematic, too. The numbers, if available, are for specific models the advisory firm uses. So unless there is specific model information provided (strategies used, specific allocations, fee schedules, etc.), comparison is impractical if not near impossible. Then you have a lot of investment companies that do not use models, or use them for only a specific group of clients, or use them and choose not to go through the SEC requirements for publishing them. Are these companies less competent than the ones who do publish their model numbers? Of course not.
I would suggest that a more logical process is to select an advisory firm that starts with the calculation of the return you actually NEED to achieve your long-term goals, factoring in risk profile, longevity, ability to save, projected lifetime income needs, how long you intend to work, or whether you will continue to have earned income in retirement, what your Social Security or pension benefits might be, etc. This, then, results in an allocation that targets that return. Without this process, you may be taking on much more risk than necessary, or not being aggressive enough, or any number of other factors.
As I have suggested many times on this discussion board, most investors base investment decisions on how well a fund does compared to the S&P 500. Ignoring the fact that the S&P is often an inappropriate comparison, this approach is backwards. We want to know how a manager handles market sell-offs and periods of high volatility. This may be just as important as how they do in bull markets over a long time period. Most investors like to brag to their friends when their investments have a good year. But privately, they are much more concerned about hanging onto dollars in down markets. Your comments above regarding these things are spot on. Thanks for the contribution.

Hi Guys,
Rather than the basic finding from this research project, which is not particularly a shocking or recent observation, I am more concerned with the fundamental cause for this shortfall without falling too deeply into the weeds.
My conclusion might well be too simplistic, but I am a True Believer that most folks are financially illiterate because of mathematical innumeracy. Many of my MFO postings are directed at addressing and/or improving this shortcoming.
One long standing demonstration of this actionable shortfall is the Cognitive Reflective Test (CRT). I’ve posted this test earlier, but here it is once again:
1. A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. 
How much does the ball cost?
2. If it takes 5 machines 5 minutes to make 5 widgets, how long would it take
100 machines to make 100 widgets?
3. In a lake, there is a patch of lily pads. Every day, the patch doubles in size. 
If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?
Take the CRT if you wish. I’ll provide the answers at the end of this post. Just a little algebra and some patience will generate a perfect 3 score.
The reason I included the CRT is because it is a common test administered to a large body of diverse groups. Scores are typically very disappointing.
When the inventor of the test, Professor Shane Frederick, initially gave it to 3500 victims, only 17 % answered all three questions correctly, whereas 33 % got all three wrong. The best group score of 3 correct answers was registered by 48 % of MIT students. Financial folks recorded 3 correct at the 40 % level. That’s not especially encouraging if you seek advice from that cohort.
Using Daniel Kahneman’s “Thinking, Fast and Slow” decision making concept, the lesson here is that far too many folks use too much of their reflexive brain elements and not enough of their reflective mind components when problem solving. The Behavioral researchers might classify this as an overconfidence bias. Regardless, our reflexive overuse tendency puts our wealth and retirement at risk.
The fundamental flaw is that most citizens are not adequately educated in the mathematical discipline. Their tool belt doesn’t contain enough mathematical skills. As one wag told it: “Most can not distinguish between Monte Carlo and Monty Python”.
I will continue the march to encourage investors to slowdown, and to do a little independent analysis. The power of “The Wisdom of the Crowd” is compromised when that independent analysis and deliberate thinking is abandoned in favor of mob rule. That’s one of the primary causes of bubbles and panics.
Enough said. I’ve wandered far from the referenced article's chief conclusion.
As promised, here are the answers to the CRT quiz: (1) 5 cents, (2) 5 minutes, and (3) 47 days. I’m sure many MFOers scored a perfect 3. For those few who didn’t answer all 3 questions correctly, don’t be discouraged; many financial advisors are also in this category. The good news is that if you patiently apply a little algebra that goal is easily achieved. Good luck to all.
Best Wishes and Happy New Year.