Recently all I've heard about are the negative consequences over Fed tapering. The market has fallen several percent the past few weeks and this week there was a drastic shift in bearishness in some of the investor polls ala NAAIM and AAII. Guru and TV business pundit Ralph Acampora is now looking for much more downside in the Dow. Normally this bearishness resolves to the upside instead. So we shall see. I am still long LGND with some new money directed to VIAB, but now NPSP is my largest equity holding with ETGLX as my largest (and only) equity fund holding not just due to how well it held during the recent swoon, but because its largest holding is also NPSP. Still hold some floating rate in NFRIX but sold much of it recently.
I never buy a fund based on recommendations on this board but kudos to whoever mentioned ETGLX here a few months back. Please whoever you were stand up and take a bow. It's one of the select few equity funds at all time highs Friday. It's so refreshing to see someone actually recommend a fund that increases one's retirement nest egg instead of the usual groupthink losing or underperforming funds ala AQRNX, SFGIX, PAUDX, and ARIVX to name just a few.

Reply to @Skeeter: Hello. I'd been hanging onto some "new" cash that came to me from a bond that matured, back on 01 July. The shape of my portfolio has, it seems, always been primary for me, rather than timing. What I knew for sure was that I was seriously underweight in USA large-caps. MAPOX has risen quite nicely since I bought it originally, in the Spring of 2012, but lately there's been just a bit of a fall in the share price. Anyhow, I do none of this instantaneously. It's done the old fashioned way, by check. Even after adding that sizable chunk to MAPOX, I'm still very much underweight in USA large-caps. What it is is what it is, for the time being. I'm still not taking distributions from my retirement accounts, yet. MAPOX is in a Trad. IRA. ....And the chunk I put into MAINX is likewise in a Trad. IRA....So the simple tax deduction on my 1040 form for 2013 was a big motivator. ...I first bought MAPOX at $68.05 and yesterday it was at $77.35. As for MAINX: I first bought it at $10.16 and it did well, but has fallen back to $10.24. So, I looked at it as a good buying-moment. ......I also own TRAMX, in the Frontier Markets sector, and do not want to add anything there. It's still less than 4% of my total, and that's a big enough proportion for me. It has pleased me very much!

The two funds you mention are in different categories - they invest in somewhat different asset classes. So the first question is: Are you concerned about having too much allocated to bonds, or the particular funds' performance?
Realistically, in most years, there isn't a heck of a lot of difference between a top quintile intermediate term bond fund and a bottom quintile fund. Maybe a couple of percent or so. Consequently, even though PTTRX's performance this year hasn't been great, it hasn't exactly fallen through the floor, either.
Fidelity's target maturity funds haven't really measured up to those in other families, for a variety of reasons - too many mediocre funds used, choice of glide path, etc. In any case, FFFAX generally underperforms its category, though here too, its performance is pretty much in line with what you'd expect. It is a fund that has settled in to its final allocation ratios (80/20 bonds/stocks - what someone retired for many years might hold in a portfolio).
The average large cap blend fund YTD performance is about 17%, and the average intermediate term bond fund is down about 3%. Blend these in an 80/20 mix (bonds/stocks), and one gets an expected YTD performance around 1%. That's the ballpark in which we find FFFAX.
In these categories (intermediate term bond, target date: retirement), there's often not a huge difference among the funds (excluding the random outliers). And that's what you're seeing here. Neither fund is doing well within its category, but (to quote Data from STNNG), they're functioning within normal parameters.
If you are thinking about changing your portfolio asset allocations, that's a different question. I would not be inclined to use a target retirement fund to shift out of bonds - the shift is too slight (moving from 100% bonds to 80% bonds), and the difference you're seeing in short term performance is because there's such a huge difference between how stocks and bonds have done this year. On average, you'd expect a difference of only a couple of percent, and when you scale that down by a factor of 5 (because only 1/5 of these funds are in stocks), such a change doesn't seem worth making.
So you might think about shifting to equity funds, or at least balanced funds (60/40 stocks/bonds), rather than shifting from a bond fund to one that is still 80% in bonds.

Hi Guys,
To be perfectly transparent, I’ll immediately announce that this post might immediately bifurcate the MFO readership. It was designed to specifically help novice investors; it is likely far too simplistic to guide our market savvy, grizzled investors. The veteran MFO ranks might choose to stop at this juncture.
Over the last few weeks I have been alerted to the rather low knowledge base and sophistication of at least a small number of MFO readers and lurkers. It is somewhat painful to feel their market innocence. Without further education in this arena, these neophytes are doomed to the financial swampland and possible ruin.
Lurking and possibly asking a few questions will inform a little, but that is an unorganized and inefficient way to gain understanding. There are easier routes to the requisite learning that is not unduly costly or time consuming. In this post, I offer a couple of suggestions.
First, Warren Buffet himself provides some very good news with this quote: “Success in investing doesn't correlate with IQ once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”
So even if you are at the first-grader level in terms of investment sharpness, it will take just a little effort to reach a second grader standing. That modest level of proficiency will be sufficient for survival according to a large cohort of passive Index investor proponents. For example, Allan Roth has authored a book titled “How a Second Grader Beats Wall Street:”. Roth further supports his assessments with a Second Grader portfolio that is scored at the following Market Watch Lazy-man website:
http://www.marketwatch.com/lazyportfolio
All of the portfolios presented in the Lazy-man listing are worthy of consideration for novice investors. But the rookie investor should still seek to comprehend the whys of the investing process.
There are many truly great books that will provide the necessary background and fundamentals to solidly ground a learning investor. I own and have completely absorbed scores of them. Two terrific examples are John Bogle’s very practical “Common Sense on Mutual Funds” and Burton Malkiel’s classic “A Random Walk Down Wall Street” which is often freshened with its many updates.
However, these excellent introductions to investing are dense in data and lengthy in page count. They easily could intimidate an inspiring investor. Fortunately, simplified and much shortened versions of these fine books have been published. I recommend both Bogle’s “The Little Book of Common Sense Investing” and Malkiel’s “The Random Walk Guide to Investing”. Either book can be purchased for under 20 dollars and each is only about 200 insightful pages in length. These are breezy reads.
I also like Richard Ferri’s 142 page book “Serious Money”. Ferri offers this book for free from several Internet sources. He takes a strong advocacy position for Index investing as do the other two recommended short books. In that sense, they are not balanced expositions of all available options. That’s not a bad place to start the education process.
I hesitate to encourage further shortcuts, but many superior reviews of these references are readily accessible on the Web. One nice review of Bogle’s work from the Bogleheads guide that extracts succinct Bogle observations can be found at the following Ranjit Kulkarni Blog address:
http://ranjitkulkarni.com/2011/12/04/the-bogleheads-guide-to-investing/
That’s a pile of passive investment wisdom in a brief format. The quotes are terrific.
The recommended reading list only extols the virtues of passive-side investing. I make no recommendations for the more complex requirements of active investing. That is a multi-dimensional discipline that is evasive and difficult to master, especially since it is a dynamic art in constant evolution.
Note that I said “art” and not “science”. Active investing demands disciplined nuances and money management skills. Also, it requires personal emotional and behavioral controls that are not easy to describe. A very deep understanding of market mechanisms and interactions are mandatory. Experience is a contributing factor towards success. Active investing is definitely not for everyone, especially novice investors.
Novice investors should walk cautiously first, before ever attempting to sprint with the active crowd. They will quickly fall victim to the many traps that await active investing. Remember that even seasoned mutual fund managers overwhelmingly fail to outperform Index products over short 3-year periods. Neophyte investors have little chance for persistency in this quixotic marketplace.
I’ll end with this novice alert: You need to invest in learning about the marketplace and how it works before you imprudently lose your money investing ignorantly. You must master the rules and the odds of the game you need to play to protect your retirement. The learning price tag, in both time and money, is not especially high if it is done in an organized manner.
Best Regards.

Recently Bob C (thanks for all your great comments over the years) was quoted as saying to his clients:
"We are NOT buying FUNDS. We are HIRING MANAGERS!"
With this mandate in mind, I wanted to gather some thoughts, reccommendations, and comments from others on this seemingly important yet often forgotten component of fund selection.
A quick dip into the electronic abyss with my e-seine net captured these quotes:
"According to an analysis prepared for U.S. News by Morningstar, 665 funds have swapped out at least one manager so far this year. If the trend continues at its current rate, that number could swell to more than 1,000 by the close of the year. By comparison, only 783 funds experienced such a change in 2012. In 2011, that number was 747, and in 2010, it was 626.
mutual-funds-swapping-managers-at-alarming-rate
and,
"About three quarters of the portfolio managers in our sample receive performance linked pay from investment advisor. Managers with performance based compensation exhibit superior abnormal performance, especially when advisors link pay to performance over longer time periods. However, we do not find that alternative compensation arrangements such as pay linked to fund assets or advisor profits are associated with better fund performance.
Performance linked pay is more prevalent among larger investment advisors, non-stakeholder portfolio managers, portfolio management teams, and in-house managed funds."
Portfolio Manager Compensation in the U.S. Mutual Fund Industry
How much of your overall portfolio is entrusted to a manager or a management team?
Manager risk potentially equates to manager reward where managers and management teams bring added value to an investement. Conversely, Index funds (index ETFs) have no manager risk/reward, but provide "average returns" that move an investment at least half way along the reward curve. I believe both active (management) and passive (idex) should be part of one total portfolio.
As a way of putting this all together, I believe a percentage of my total investment portfolio should be placed in low fee index funds or index ETFs...or possibly even a single target date retirement funds. All that is required with these investments would be periodic reallocation. VTI ,VT(not sure why this is not hyerlinking... Vanguard Total World), BND in equal amounts (say 20-25% each) would leave me with 25-40% of my portfolio to be invested in non-index funds.
Finding these managed mutual fund gems is why I'm here at MFO and I appreciate this forum.
What are your favorite managed mutual funds that provide a unique strategy (best ideas, niche markets, opportunistic bets, etc.) with managers or mangement teams that provided added value over long periods of time.
What are you favorite fund managers...along with the fund that they manage?

http://www.sec.gov/Archives/edgar/data/1444822/000119312513336644/d581730d497.htm
497 1 d581730d497.htm AQR MULTI-STRATEGY ALTERNATIVE FUND
AQR FUNDS
Supplement dated August 15, 2013 (“Supplement”)
to the Class I and N Prospectus, dated May 1, 2013 (“Prospectus”),
of the AQR Multi-Strategy Alternative Fund (the “Fund”)
This Supplement updates certain information contained in the Prospectus. You may obtain copies of the Fund’s Prospectus and Statement of Additional Information free of charge, upon request, by calling (866) 290-2688, or by writing to AQR Funds, P.O. Box 2248, Denver, CO 80201-2248. The following disclosure is hereby added to the section titled “Closed Fund Policies” on page 168 of the Prospectus. Please review this important information carefully.
AQR Multi-Strategy Alternative Fund
Effective at the close of business September 30, 2013 (the “Closing Date”), the AQR Multi-Strategy Alternative Fund (the “Fund”) will be closed to new investors, subject to certain exceptions. Existing shareholders of the Fund will be permitted to make additional investments in the Fund and reinvest dividends and capital gains after the Closing Date in any account that held shares of the Fund as of the Closing Date.
Notwithstanding the closing of the Fund, you may open a new account in the Fund (including through an exchange from another AQR Fund) and thereafter reinvest dividends and capital gains in the Fund if you meet the Fund’s eligibility requirements and are:
• A current shareholder of the Fund as of the Closing Date—either (a) in your own name or jointly with another or as trustee for another, or (b) as beneficial owner of shares held in another name opening a (i) new individual account or IRA account in your own name, (ii) trust account, (iii) joint account with another party or (iv) account on behalf of an immediate family member;
• A qualified defined contribution retirement plan that offers the Fund as an investment option as of the Closing Date purchasing shares on behalf of new and existing participants;
• An investor opening a new account at a financial institution and/or financial intermediary firm that (i) has clients currently invested in the Fund and (ii) has been pre-approved by the Adviser to purchase the Fund on behalf of certain of its clients. Investors should contact the firm through which they invest to determine whether new accounts are permitted; or
• A participant in a tax-exempt retirement plan of the Adviser and its affiliates and rollover accounts from those plans, as well as employees of the Adviser and its affiliates, trustees and officers of the Trust and members of their immediate families.
Except as otherwise noted, once an account is closed, additional investments or exchanges from other AQR Funds will not be accepted unless you are one of the investors listed above. Investors may be required to demonstrate eligibility to purchase shares of the Fund before an investment is accepted.
The Fund reserves the right to (i) make additional exceptions that, in its judgment, do not adversely affect the Adviser’s ability to manage the Fund, (ii) reject any investment, including those pursuant to exceptions detailed above, that it believes will adversely affect the Adviser’s ability to manage the Fund, and (iii) close and re-open the Fund to new or existing shareholders at any time.
PLEASE RETAIN

IMHO you are getting wrong idea about WBALX being risk averse. If I may suggest some more funds, for you to research.
FWIW, I own each of them in either taxable or retirement accounts. Also I don't think I will be getting rid of these funds other than to swap them between accounts.
PROVX
AUXFX
LCORX / GLBLX (maybe you look at only one of them)
WASYX
HSTRX (it has already taken "gold" loss, downside could actually be lower now)
OAKBX
BRBPX
VWELX (even with its heavy bond position I feel more comfortable than WBALX, but I accept I'm looking to sell)
The following I do not own, but I think better than WBALX
DODBX
PRWCX (I have/might own again at some point in portfolio i manage for family member)

The biggest problems I have is this guy putting half his retirement assets in GOLD. He is 53 years old and invested in gold. Should be sophisticated enough. Has lived through two 50% declines. Knows better not to bet the farm on any asset that's gone up multifold over several years. WTF is he thinking? Why should anyone sympathise with him?
One reason I said we as investors collectively suck big time. It is true we have a lot of predators out there. Still I think we have to share a good part of the blame as well.

I use the two suggested portfolios from MaxFunds (http://www.maxfunds.com/funds/powerfunds/holdingsdata.php?port=2&pg=ph2) for allocation among categories. One is more conservative (I use it for kids college funds --needed in 5 or so years) and one is more aggressive (I use it for retirement funds -- needed in 15 years). Then I chose funds in each category based on recommendations here on MFO. Some years that is an advantage over the maxfund recommendations and some years, not so much.
The portfolios change infrequently, but the changes have been helpful in avoiding, for example, the major downdraft in 2008.

Reply to @SteveS: That's a pretty good story Steve. I'm 59 and planning to retire at least from full time work at 62, so I have been having the same thoughts and concerns about investing for the future as you. I enjoy the mutual fund game but I don't fool myself in thinking I'm making more then a financial fiduciary could do for me. No offense to Bee, but the simple spreadsheet comparison shown below isn't very useful in predicting ones outcome. Frankly, making 7% return in a conservative fashion during retirement is wishful thinking. At the very least, it shouldn't be counted on in your calculations. There are way to many variables, both economically, emotionally and unknown, that interfere with consistent returns.
Anyway, thanks for the post.

Reply to @SteveS:
Welome to MFO...Just so you and others fully understand what a 1-2% service charge means to your bottom line I included the growth of a single investment of $10,000 made when someone is 25. After 40 years...retirement age of 65... a 1-2% service charge would provide enough money for you and your financial planner to equally share in your retirement while you took all the risk and you provided all the hard work...with little or no risk on the financial planners behalf.
You sound smart enough to be able to generate a 7% return over 40 years without any help from an advisor, but if you would prefer less...6% or 5%...I'm sure there are plenty of financial planners who will "help" get you that too.
Over 40 years, that 1% difference equates to you "handing over" a chance to hold 50% more in profits ($70K vs $102K) (5% vs 6% return)...take a look at the difference between a 5% average return vs a 7% average return...tuly astounding profits for the fianacial planner when you consider you take all the risk.

Reply to @David_Snowball:
Thanks David, great comments and so true. Additionally, a smart well disciplined small investor is, as you previously mentioned in another thread, only mildly interesting to the Financial idustry so there is little help out there to orchestrate your discipline and skills. A small investor is up against a system designed to separate them from their principal and profits by offering limited investment options in retirement plans, by gleaning off 1-2% through on going expenses, and assessing trading and early redemption fees.
And most of us thought making money was hard...try making it grow!

The way I see it, there is NO magic number. As several people have pointed out, there are so many variables to consider (ages, company retirement accounts, size of accounts, knowledge, time to spend reviewing, etc) that pontificating on this is not a good use of time. We use a wide number of positions in our client accounts, mostly depending on the size of accounts. One client might have four accounts, one of which is very small, while another could be 10 times as big. And need for diversification also plays a role in number of holdings. Again, just too many variables. We have accounts where clients own individual stocks, so we need to consider how these fit into the mix, too. And some folks are married to one or more funds, whether we like them or not, so we have to work around them, sometimes isolate them as NOT a part of our allocation process. Maybe we can just agree to disagree on this.

Reply to @Art:
Hi Art,
Sorry for the delay in responding. I somehow must have missed it.
Form retirement, I have not yet got to slow down. My old firm keeps calling me back to the office from time-to-time to sort things out and meet with preferred clients. Seems nobody felt I did much but collect my time and money form being around the place. Then, when it was left up to others to do what Skeeter did ... Well, they are now seeing it was not so simple. After all, I grew with the position through the years, knew the people and knew how to handle issues to meet the customer's satisfaction. My boss is still there and she simple told them to do what Skeeter use to do ... after all ... it worked for him for many years. She was good at letting me go and do pretty much what I wanted to do and allowed me to take much of the summer off while she took much of the fall off. We could cover and work one anothers desk. Now she seems to have the mind set to let them learn on their own, much like she and I did. This is a small family run business and I handled much of the back office and she handled the front office and we could switch off while the others reported to us.
I have started billing them for my time when they call because the cusomers ask for me and if I have to come in to the office the rate is subject to what I find must be done. Somebody is going to screw something up real soon and real good ... and, I don't want to be around when they do. I don't think my boss does either and if she did not own the place she'd probally be out of there ... trying to kick back like I am doing. By the way I will get income trails for the next three years form the firm plus time that I might bill for my time. Told her she had to stay until my trails were paid.
So Art, That's how it is going. And, oh yes ... I play golf on Thursday afternoons and then drive to the coast for the weekend and then back to Charlotte on Sunday evenings. The wife still works in the local school system as a 52 week employee ... but, she works Monday thru Thursday through the summer months plus taking vacation. She will retire out of the system in about two years. We plan to gift the Charlotte homestead to our son when we move to the coast as it was gifted to us by my parents plus we have our own home too. In this way, we should be well pass the look back should we fall in poor health in the years to come and run out of money. I don't think so ... but, one really never knows.
I am still trying to find the time to start a restoration project on my 1992 Jeep Cheorkee that I have had for many years. I went and looked at a new one but just value my capital too much to let go of it. The Jeep needs a rear main seal, a set of new tires and just gone over in general but overall all I'd start out to the west coast in it on most any day. It is needed to put the boat in and out of the water at the coast and trail it back and forth during the off season rather than paying high slip and storage fees in the inlet. I have ramp acces through my HOA but not long term dock and storage.
I am not going there with Catch22 & Ted. There seems to be something of an issue ... hopefully, it will get worked out. They both are contributors and I would hate to see either leave. But, I do not enjoy the ongoing feud either.
I could go on ... but, I'd get in a rant. And, I just don't want to do that. Not now anyway.
Have a good one and thanks for asking.
How was the book?
Skeeter

Reply to @Skeeter:
Skeeter,
Good to hear from you. How's that retirement gig going?
I really did not expect Ted to answer my question. Lately Ted has been, for lack of a better word, stubborn, that his way is the only way.
I described a real life situation, mine. I watch over 52 funds in 7 account for family members. I also help co-workers with their allocations. I spend only a few hours a week looking over things and keeping a watch list to upgrade funds if needed.
I am still following the "Market Leadership Strategy" with a small amount as an experiment. So far so good.
As I like to say "If its not broke, don't fix it".
Art

Reply to @Ted:
You noted: "Granted not all 401(k) plans have very good fund options, but you should in the best they have to offer."
You answered your own question. I will state again, as you noted; "Granted not all 401(k) plans have very good fund options.
Many folks have to make this choice. Thus, some acquire more than one 401k, etc.; as the new employer retirement plan is lacking. If I had a brokerage available 401k at a previous employer, I surely would not throw that away and roll into a new plan that had limited choices and no brokerage feature.
You also noted: " but you should in the best they have to offer. You need to enroll in investing 101 ! "
Not sure what this means, aside from a presumption for some unknown reason.
Regards,
Catch

Howdy MikeM,
You are correct; and Ted is correct for his circumstance. My reply to Ted and golbu1 is that through one's working career and employee retirement accounts; circumstances with which we have no control cause different requirements for investing choices (funds). You and I both know the days of having the same employer for 30 or more years are likely gone. This was not the case for this house over 35 years; and we have encountered 5 vendor changes for our employer plans over those years.
Have you had vendor changes and/or more than one employer account?
Yes, the "other" accounts will be rolled by the end of this year. I am tired of dealing with so many vendor accounts. The "Funds Boat" write was about our retirement accounts; not being retired. That status is now changed for this year, 2013.
We don't hot swap fund holdings. I will guess that our average fund rotations may have averaged about 5/year over the past 10 years. We don't chase funds for whatever reason, without consideration and/or study.
Simple passive indexes available via Fido will allow for fewer funds. Hell, if one chose 6-9 indexes or etf's; we could cover pretty much the whole sector spectrum.
As an aside, I sure don't know why Ted has such a grind against me. I have asked in the past, but never had a reply. I am pleased everyone who is here at MFO and posts their thoughts, are indeed here. My reply to Ted was to help him and anyone else, understand circumstances that may evolve over a working career with employer retirement accounts. He has treated this as we being dumb arses at this house. We have only been working with what was available to us, and have a 7.24% annualized return beginning from 1979. Don't know what else we could have done to improve the numbers.
Well, anyway; take care and thank you for your thoughts here.
Catch

Reply to @catch22: You should have rolled over your 401(k) each time you left an employer. Working for a number companies in your lifetime, is very common, and most workers use the rollover method to simplify their retirement portfolios. Granted not all 401(k) plans have very good fund options, but you should in the best they have to offer. You need to enroll in investing 101 !

Howdy golub1,
You noted: " My question is since when we are talking stocks why is that so many individuals own 20 and 30 equity funds?"
I don't recall anyone here at MFO stating they owned 20-30 equity funds. Perhaps someone may have 20-30 funds of mixed allocations.
Read this to have a better understanding of what exists for some investors having multiple retirement accounts: http://www.mutualfundobserver.com/discuss/index.php?p=/discussion/comment/26674#Comment_26674
I don't disagree with Ted and others who have noted here; that one does not necessary need many funds to cover a broad area of investment sectors.
If you find yourself forced or by choice, to work for 4 different companies during your working career; and you have a 401k, etc.; you will likely have the option to rollover the 401k from the previous employer or opt to keep the plan. Eventually, you may have 4 different retirement plans; and you will likely discover that many company plans are not all that good for choices. Thus, if you choose to have exposure to a particular fund sector in all of the plans, you too may have 4 different fund vendors for exposure to a sector.
Obviously, one may have a fairly broad spread across many sectors; if the proper funds or indexes are available. This circumstance would generally not be a problem with an IRA account; but can be a problem with company plans. At the least, one could choose a large, mid and small cap U.S. blend to cover this area. Perhaps a broad based internation and whatever other sector suits your fancy.
We have one plan that has a large cap and small cap index available, but no mid-cap. But, with the overlap of the large cap into the mid-cap area and the overlap of the small cap into the mid-cap area; most of the overall broad range of U.S. cap sizes are satisfied. One takes what they can get.
Hoping that you have access to one of the rare, well thought company retirement plans.
Regards,
Catch

Reply to @Ted: Hate to say it, :) , but I think Ted is on the money with his information.
Catch22, I'm sure you have thought about this, I think you said you were retired, but why wouldn't you make your retirement portfolio more concise by combining these different accounts to a single (or 2) IRA's.
I kind of think multiple fund portfolios happen because 1, reading about new funds and buying hot funds is addictive, and 2, it may be intuitive but not necessarily correct as Ted pointed out, to think more funds give better diversification and a smoother ride. A 3rd reason for the many fund portfolio may be the lack of trust in the managers they employ, not wanting to put a high percentage in one funds hands.
Anyway, not trying to offend the 20, 30, 40 or more fund investors. Just giving my 2-cents. Come to think of it, my 2-cents's have probably added up to about a buck by now.