FYI:
Regards,
Ted
http://online.wsj.com/article/SB10001424127887324162304578304491492559684.html#printMode

There are a variety of gotchas that won't affect most people, but one should nevertheless be aware of:
- You must calculate the RMD for each account separately (because a different table, i.e. divisor, may be used for different accounts, depending on whom the beneficiary is and the age of the beneficiary)
- A completely different calculation applies to inherited IRAs (unless you've adopted them as your own, as you are allowed to do when inheriting from a spouse)
- While you may take your IRA RMD from any or all of your traditional IRAs, and you may take your 401(k) RMD from any or all of your traditional 401(k)s, you may not take your traditional IRA RMD from your 401(k) or vice versa. These are two completely separate sets of accounts, even though they are both retirement accounts.
- If you are doing Roth conversions, you must take the RMD from your account each year prior to withdrawing additional money for the Roth conversion
Then there are the corner cases - the year you turn 70.5, the year you die. That's beyond the scope of this post :-)

Top 3: (I hold just 9 funds, total. The lion's share is in tax-sheltered retirement stuff.)
PREMX 40%
MAPIX 35%
MAPOX 3.3%
All the others are at 3% or less: SFGIX, TRAMX, MACSX, MAINX, MSCFX, DLFNX.

Hi Art....your top 3 are interesting, as I hold all 3 in a 401K.
Your question asked about a top 3 in a retirement account...while I have separate 401K, IRA rollover and then after-tax accounts, I view them ALL as retirement accounts.
As such, my top 3 holdings are high conviction, and the only ones which exist both in pre and after tax accounts:
FAIRX
FPACX
RPMGX
In aggregate, between 7-8.5% of total portfolio assets for each. Interestingly, none of these 3 are in the top 3 in any of their respective accounts.

GLD 6.3%
VDIGX 6.1%
OYEIX 5.9%
Actually my largest holding is cash at 15,4% as I recently took profits in some stocks and waiting to deploy some of it into funds. Im about 56% stocks to 26% funds in retirement accounts, which will be closer to 56/38 when fully deployed. All of my bond allocation is in taxable account, but they are munis.

"Unique funds"? Uhhh ... about three.
Walk through the Morningstar screen:
Distinct portfolios = 6915, but that does count Fido Emerging Markets twice (Advisor and retail apparently have just enough differences...)
Qualified access = "no" leads to 1391 funds. Here's Morningstar's definition of that screen: "This group includes funds that restrict investment to a certain group of investors. Sometimes, the restriction is based on religious or ethnic membership, e.g. Lutherans. Sometimes, the restriction is based on membership in a certain investment plan, e.g. a retirement plan or college-savings plan."
Minimum purchase of no more than $10,000 = 1272.
Open to new investment = 1206.
No-load funds = 592.
That number is doubtless wrong but it probably gives you an order of magnitude. For practical purposes, the no-load universe is likely under a thousand even including those "A" class funds available for purpose at NAV through supermarkets.
David

I thought about using the new poll feature but this does not require "voting". My question is "What are your top 3 holdings, by percentage, in your retirement accounts? Why you ask since your age and other things may have a bearing on your choices. Let's just say I am curious. Mine are:
Pimco Total Return,PTTDX-18%
Allianz NFJ Small Cap Value-PCVAX-11%
Oppenheimer Developing Markets-ODMAX-10%
Art

FYI Its the required amount that counts. If you have multiple retirement accounts, you can choose which one you take the distribution.
Regards,
Ted
http://assetbuilder.com/scott_burns/required_minimum_distributions_not_such_a_bad_thing_after_all

Hi Investor, Hi Greg,
Thank you guys for taking time to reply to my post. Both your responses were thoughtful and thought provoking. They both added to the scope and utility of my original submittal.
Investor, the articles that you suggested greatly expand the usefulness of my posting by identifying two strategies that focus on the execution of retirement portfolio maintenance. Retirees and near-retirees will benefit from exposure to these two excellent summary articles.
Also, I was not aware that the author of the article I referenced was part of Paul Merriman’s FundAdvice staff. I did not recognize the potential conflict of interest. I like Merriman, but he has special incentives because of his financial relationships with DFA. There’s the possibilities of some biased opinions because of that relationship. Thanks for the heads-up. In this instance, I am not overly concerned of any major distortions or misrepresentations because I trust Merriman and I trust the DFA organization. Both do yeoman work.
Greg, your interpretations of the reported work, and your intuitions on possible outcomes for the scenarios that you postulated are spot-on-target.
Even today, for Monte Carlo codes that nominally adjust drawdown rates to reflect inflation rate changes, the Monte Carlo tools can be effectively used to examine the constant drawdown case you proposed. That’s simply done by setting inflation rate and it variability to zero in the inputs. The very first Monte Carlo code that I developed did not include an inflation adjustment. As you correctly perceived, the general contour, in terms of an optimum asset allocation distribution, are about the same both with and without inflation considerations. Portfolio failure rates are obviously impacted, but your excellent Bath-tube description as a function of equity percentages is still valid.
Indeed, being ultra-conservative by including too few equities in a portfolio is a risky proposition in a retirement portfolio, especially these days with extremely low fixed-income yields. Remember that fixed-income products also have a returns volatility aspect. That variability essentially means that any drawdown schedule from most fixed-income dominated portfolios must be lower than the expected overall average return from that portfolio because of that lowered, but still non-zero, volatility. In the end, that translates into either a very low permissible (and not acceptable) withdrawal rate or an unrealistically gigantic portfolio size.
Once again, thank you guys for your perceptive and useful inputs.
Best Wishes.

Very nice @MJG.
Larry Katz is the Director of Research at Merriman Inc., a Seattle Based Financial Advisor. These folks also ran FundAdvice.com which provided educational material although with the retirement of founder Paul Merriman last year, FundAdvice.com has lost some of its previous content that I used to refer to. (Update: The article you posted in available in perhaps a bit better format at here)
Two of my favorite articles are "Fine Tuning Your Asset Allocation" and "Ultimate Buy and Hold Strategy".
Fine Tuning Article contained a table that provided the performance, risk and max drawdown information for various equity and bond mixes. Armed with that information an investor could make a more intelligent choice what risk/return level he/she is comfortable with and the what sort of downside could be expected at the portfolio level. Here is the 2011 Update that I can find. They used to update this article with each new year data. If it is updated since 2011, it is not publicly exposed anymore. :( I'll try to ping them to see if they will continue to update this one.
For the other article they continue to provide year to year updates to numbers. There is now a 2013 Update to Ultimate Buy-and-Hold Strategy article. Direct link is here.
The article you have linked and these two provide a good set of educational material.

Hi Guys,
Many MFO members are justifiably interested in portfolio retirement drawdown rates that yield a high likelihood of portfolio survival. Ultimately, it’s a subject that gets everyone’s focused attention.
There are numerous ways to approach the problem, some more sophisticated than others, but all are somewhat fragile because of uncertain and unknowable future market returns. But these imperfect tools do generate respectable estimates of the odds, the probabilities of success if you are a glass half filled personality or a glass half empty if you are a pessimistic type.
As an aside, of course we all recognize that the glass is never just half filled or half empty. It is always completely filled with a mixture of liquid and gas.
I did my own portfolio survival estimates using Monte Carlo analytical techniques. Many such tools, which use statistical, random sampling techniques to choose annual returns, are freely accessible on the Internet these days.
I like them and recommend you give them a try. However, they do have shortcomings. They rely on statistical inputs like guesstimates of returns, the variability in those returns, and the correlation coefficients between the various asset holdings that are included in the portfolio. Most need additional inflation rate projections. Some do not permit withdrawal rate adjustments after the analysis is initiated. Almost all use Normal distribution assumptions. None handle Black Swan events very convincingly.
But that’s the state-of-the-art today. The final predictions seem plausible even given the list of shortcomings.
But some folks do not trust Monte Carlo-based methods and/or statistics. Some folks prefer real world data; they favor a historical analysis. These analysis were commonly completed before Monte Carlo tools were available.
Here is a Link to one such computation that was completed in late 2011:
http://www.marketwatch.com/story/how-to-invest-so-your-money-lasts-in-retirement-2011-11-01
The analysis used real market returns in the sequence that they were recorded. It doesn’t get much more real than that. Portfolio drawdown rates of 4 %, 4.5 %, and 5 % were postulated.
Note the hole in the middle of the portfolio failure rate charts; that’s goodness; the most successful portfolios were constructed with a balanced mix of equities and bonds. Monte Carlo codes produce similar findings.
Larry Katz, the author of the piece, provides three conclusions: (1) Diversify among beneficial asset classes, (2) Take moderate distributions from your portfolio, and (3) Choose a reasonable stock/bond allocation.
The general finding from a drawdown perspective is that a 4 % withdrawal rate is relatively safe, whereas a 5 % annual withdrawal rate is far more risky.
That’s an excellent guideline if you are committed to an inflexible drawdown schedule. However, if you have the flexibility to adjust that rate after a bad portfolio year or two, you can bump that withdrawal rate plan upward by approximately 1 % per year without much compromising the survivability odds of the portfolio. Many independent portfolio studies have verified this more aggressive drawdown strategy.
I have done a host of studies using a number of Monte Carlo codes that reaffirm this result. Of course, you had better be prepared to execute the plan after a disappointing market return. Plans are simply plans, execution is the more demanding component.
Enjoy the referenced article.
Best Regards.

You've boiled it down to a simple yes or no proposition. Sometimes that reduces complicated issues to the essentials. Sometimes it obscures. If you are asking whether diversified bond funds will produce positive returns over - say the next 5 years, it's a debatable point. Using the MFO search option will bring up extensive & sometimes heated debates on that question. I've no desire to wade into that again.
However, a better question might be: Is it really necessary for everything in your diversified portfolio to show positive returns? Many things we own provide great value, even though they cost money and appear to offer little material gain. Consider house insurance, fire extinguishers, umbrellas, and life rafts on a vessel. By owning a variety of investments that MAY do well under different circumstances, you can reduce volatility and uncertainty, and perhaps sleep better at night. I don't consider this too important for youngsters under 50 who can ride out the bumps and who also tend to have fewer investable assets. I do consider it important for folks 60+ who are retired and reliant on their life savings for subsistence.
One good way to address the issue above is to study the allocation models of some good moderate or low-risk mutual funds, along with their rationale, with an eye to learning how managers design portfolios taking into consideration (1) desired risk profile and (2) allocations to cash, treasuries, various grades of corporate debt, equities, and sometimes "real assets." Prospectuses can be pretty dry, so that's not where I'd point you. However, some of the annual and semi-annual fund reports - replete with pie charts - make for good reading. Couple better ones are those from managers at PRWCX or OAKBX - both moderate allocation funds. Also, look at the allocations for target date funds which try to adjust risk to age and years from retirement. Some of the websites are also pretty good on their own. And, many third parties, like M* break the allocations down if you look beyond the "headline" rankings.
Overlooked In your question is the fact that bond funds comprise a large and diverse group with much different risk profiles or purposes within a portfolio. To that end, here's a decent read showing some of that variety (much more substantial than merely choosing between a chocolate or cherry soda:-) https://www.tradeking.com/education/mutual-funds/bond-mutual-funds ... And, if you look closely, many shun the moniker "bond fund" completely, preferring the term "income fund" which gives them more latitude within the fixed-income (and sometimes equity) universe. I happen to own DODIX and RPSIX - both of which are so identified,
Regards

I continue to have concerns regarding fixed income and how it will perform down the road (as well as if the perception of its "safety" will change), but I think it can continue on longer than anyone would think. If you are in/near retirement, I think you can continue to have some fixed income, but - and I understand your dislike of equity volatility - I think it's good to not be 100% one asset class. SPLV is a low volatility S & P 500 ETF that offers monthly dividends - if the market goes down, you can reinvest at lower levels each month. There are a number of low volatility options now available.
I definitely understand the desire to have lower volatility and lower risk in/near retirement (and I think I've been particularly understanding of that on this board for some time), but I think it's good to have *some* (even if a bit) of exposure to equity. I think something that can offer consistent dividends that are reinvested (monthly like the SPLV) is something that may be more volatile than fixed income, but the monthly reinvestment could at least take some of the stress off over time in that you can let it go on autopilot and just reinvest (?)
You can be 100% in any one asset class, but as long as you're accepting of the risks (and potential underperformance at times, possibly for longer periods) of that. The same goes for anything - equities, commodities, bonds or even more specific sectors - emerging markets, tech, whatever.

HFMDX = 1.97%
WSBEX = 1.68%
SMVLX = 1.48%
GASFX = 1.24%
MSCFX = 1.21%
WAFMX = 0.36%
PONDX = 0.08%
Way, way, way too many funds for me. Sold MSCFX, HFMDX today (too volatile for my tastes) while increasing in GASFX which is my kind of fund. Still too overweight in PONDX at now around 75% but such a great retirement anchor.

http://www.sec.gov/Archives/edgar/data/754510/000072921813000007/main.htm
Supplement to the
Fidelity® Small Cap Growth Fund and Fidelity Small Cap Value Fund
September 29, 2012
Prospectus
Effective the close of business on March 1, 2013, new positions in shares of the Fidelity Small Cap Value Fund offered through this prospectus may no longer be opened. Shareholders of Fidelity Small Cap Value Fund on that date may continue to add to their fund positions existing on that date. Investors who did not own shares of Fidelity Small Cap Value Fund on March 1, 2013 generally will not be allowed to buy shares of Fidelity Small Cap Value Fund offered through this prospectus except that new fund positions may be opened: 1) by participants in most group employer retirement plans (and their successor plans) if Fidelity Small Cap Value Fund had been established (or was in the process of being established) as an investment option under the plans (or under another plan sponsored by the same employer) by March 1, 2013, 2) by participants in a 401(a) plan covered by a master record keeping services agreement between Fidelity and a national federation of employers that included Fidelity Small Cap Value Fund as a core investment option by March 1, 2013, 3) for accounts managed on a discretionary basis by certain registered investment advisers that have discretionary assets of at least $500 million invested in mutual funds and have included Fidelity Small Cap Value Fund in their discretionary account program since March 1, 2013, 4) by a mutual fund or a qualified tuition program for which FMR or an affiliate serves as investment manager, and 5) by a portfolio manager of Fidelity Small Cap Value Fund. These restrictions generally will apply to investments made directly with Fidelity and investments made through intermediaries. Investors may be required to demonstrate eligibility to buy shares of Fidelity Small Cap Value Fund before an investment is accepted.
The following information replaces the information for Fidelity Small Cap Value Fund found in the "Fund Summary" section under the heading "Portfolio Manager(s)" on page 11.
Charles Myers (lead portfolio manager) has managed the fund since May 2008.
Derek Janssen (co-manager) has managed the fund since January 2013.
The following information supplements information for Fidelity Small Cap Value Fund found in the "Fund Summary" section under the heading "Purchase and Sale of Shares" on page 11.
Shares of the fund offered through this prospectus will be closed to new investors effective the close of business on March 1, 2013.
SCP-SCV-13-02 February 27, 2013
1.808094.115
For more information, see the Additional Information about the Purchase and Sale of Shares section of the prospectus. Remember to keep shares in your fund position to be eligible to purchase additional shares of the fund.
The following information supplements information found in the "Shareholder Information" section on page 18.
Shares of the Fidelity Small Cap Value Fund offered through this prospectus will be closed to new investors effective the close of business on March 1, 2013.
The following information replaces the biographical information for Charles Myers found in the "Fund Management" section on page 29.
Charles Myers is lead portfolio manager of Fidelity Small Cap Value Fund, which he has managed since May 2008. He also manages other funds. Since joining Fidelity Investments in 1999, Mr. Myers has worked as a research analyst and portfolio manager.
Derek Janssen is co-manager of Fidelity Small Cap Value Fund, which he has managed since January 2013. Since joining Fidelity Investments in 2007, Mr. Janssen has worked as a research analyst and portfolio manager.

A fund that offers a unique point of view, has flexibility, is not heavily correlated to the market and has a demonstrated track record of success (in this case, with the company's hedge funds) is appealing. I view this fund as part of a second generation of long-short vehicles that are more flexible with the definition (this doesn't even fall into the l/s category on Morningstar, interestingly.) Funds that, despite being "long-short" funds, realize that there's going to be times where there aren't many short opportunities, and have the ability to dial up and down risk to a greater degree. I think these funds may lose more in down markets than a number of their long-short peers, but also have the potential to capture more of the upside in up markets than many of their long-short peers.
Marketfield also falls under this category, as well. These funds definitely rely on management calls (although certainly every fund does), but I believe that the flexibility offered will be positive in the years to come.
Otherwise, I've thought for a while that essentially A:) we didn't learn anything from 2008, it was just "how quickly can we throw money at the problem to reboot everything?" However, with the Fed doing what it was doing, you had to be invested. Now, as I said the other day, it's nearly 5 years later and the Fed is still doing QE and ZIRP and the training wheels have not been taken off. What if we do have a recession, or are we not going to have them anymore because they'll just be met with more QE?
Seth Klarman noted the other day that, "(The) underpinnings of our economy and financial system are so precarious that the un-abating risks of collapse dwarf all other factors."
Personally, I think, despite what markets have done, there is some degree of shakiness to the foundation because what has happened is built on what the Fed has done, but nothing more than that; there has not been real reform to the financial system to strengthen the underlying foundation.
Or, as Jacob Rothschild recently noted, "“We are living through a
period of unparalleled
complexity and
uncertainty.” These
words remain as
regrettably true today as
when I wrote them in
my report to you two
years ago. To avoid the
situation becoming even
worse, governments
continue to roll their
printing presses in one
form or another. Their
actions prevent systemic
collapse but the deeper
underlying problems
remain."
That's not to say that I think people should freak out. That's not to say that I think you should sell everything. However, I think if someone is in retirement age or near retirement age especially, take a look at what you own and realize that the markets have been very comfortable the last few years. They may remain comfortable, but realize that there remain real issues here and abroad that have not really been addressed at the core level. If the market did have a substantial downturn, would you sleep well at night? If not, this may be a point, given where markets are, where you want to address that. That's not to say that a substantial downturn would be another 2008, and there are funds that allow people to remain invested, but with less risk and volatility. There's no one path to recommend, because everyone is different and everyone has different goals, different risk tolerance, etc, but I think the general idea is to remain invested but - at this point (especially if you're towards retirement age - maybe dial down risk a bit if you believe that some of what you own may not fare well if things were to turn South at this point.
As for the Whitebox letter, I think confidence in treasuries comes down to a belief that the Fed can buy enough paper to keep rates low, but I think retail investors continue to pile into bonds because they believe that there's a level of safety in bonds that can be maintained for the foreseeable future and they're looking for yield. That "safety" can go on for longer than anyone can think it will, but eventually the Bond market will turn South. People continue to reach for yield (no surprise, given that they can't earn anything in CDs or other "risk-free return") in fixed income and REITs and MLPS, but I think personally, given the environment, I'd rather own real, productive assets and get yield from that.
Additionally, as Marc Faber noted - and I agree with, at least for the foreseeable future - "I think that in equities you will be better off because you have an ownership in a company, than by being the lenders to companies, and the lenders, especially, to governments." If the bond market really turns substantially (and possibly suddenly), I think it will be large, institutional-level sellers that do it. It's not going to be all the retail money that has gone into bonds that will be first to leave.
In terms of the even the "rosy" scenario discussed in the Whitebox letter, I think there are some fairly large transitions implied by that, and while they may just go smoothly, I tend to believe that large transitions by many people, at one point or another, tend to get disorderly. Hopefully not. I do agree with the favoring of well-established large caps and I think a Yacktman or "Yacktman-like" fund of big brands and established names an appealing place to be right now vs taking more aggressive risks.
As for the Fed and Treasury losing credibility, that will likely never happen, because the Fed is the Great and Powerful Oz. The Treasury is, well, some new guy. I tend to wonder if there was ever a real loss of credibility for the Fed if it would ever be started internally, and wonder if it would be more likely an external event. But, that's neither here nor there.
I did find the discussion of "devaluation is inevitable" if treasuries rise towards 600bps rather interesting and I would have liked the letter to go into a little more detail on that.
There have been a lot of discussions of the implications of rates even getting back to rates considered "normal" lately, and it makes me tend to believe that if that occurs sooner than later, it would be due to things getting disorderly. I also question whether we will get the growth that is needed that is discussed in the letter, and if we do, it becomes a matter of how much is that growth actually costing, and the diminishing returns on the cost of buying the appearance of growth.
Overall, I think that people should not freak out, but realize that there are real risks that have not been addressed in the financial system and real obstacles yet ahead. Things, in terms of the markets, have been very comfortable for a while. I'd say stay invested, but the time to look to reduce potential volatility and risk is not in the midst of crisis, it's when everything seems comfortable.

Initiated a small position in the retail class this summer.Intrigued by "Hedge Fund Style Approach"? Adding to my retirement position weekly @TD Amer.Low minimum initial and no minimum subsequent,check it out! If any of that "rosy scenario should go wrong,especially the Fed's credibility,look out below! Avalanche and Earthquake are scary words,I'll buy this insurance no matter what Ted says about high fees for cash and EFT management.Sounds like their cash management is a little more sophisticated than just parking it in FSLXX. Thanks for posting this alternative investment fund news Charles!

Howdy,
1. In or out of retirement only matters to the degree the taxes do on any gains (see #2).
2. As Scott said, you'll need to handle the K1 and all that.
feh. I don't really see any of these funds suitable for trading the pm market, however, the ETFs are no better if it's in a taxable account.
Mark brought it up but it would help frame my response if we knew what your goal was. Is this to be an relatively permanent investment, a speculative play, a momentum play, what?
peace,
rono

I think really becomes what are you looking for in terms of gold - a short-term (more of a trade?) or long-term (maybe a year or more?)
I wouldn't think there would be a substantial difference in terms of retirement or non-retirement and am not sure about PFIC issues, but I'd guess it's similar (just more paperwork hassle) to a K-1. If you're just looking for a trade, I'd think there would be easier ETFs to do that with (although some of the commodity ETFs do produce a K-1)
I'll also note that Sprott Resource Corp (SCPZF.pk) has substantial holdings in physical gold, but is a mix of a lot of different things. (public/private investments, farmland, etc etc) That just started paying a monthly div.

Am interested in getting more information for the following closed-end funds before investing any money:
Sprott Physical Gold Trust (PHYS)
Sprott Physical Silver Trust (PSLV)
Sprott Physical Platinum and Palladium Trust (SPPP)
Two topics that come to mind immediately are:
T1. Pros and cons of holding the units in a retirement account vs. non-retirement account
T2. U.S. federal income tax issue (will be considered a U.S. Unitholder). Can anyone speak to this issue assuming that I plan to make and maintain a QEF (Qualified Electing Fund) with respect to the units (will need to file IRS Form 8621 for any year that the Trust is a PFIC (Passive Foreign Investment Company)). Aside: Since I most likely will NOT meet the minimum requirements for redeeming units for the physical stuff, any units redeemed will be for cash.
Any other information in regards to these three Trusts will be greatly appreciated.
Thanks in advance to all those who care to share their wisdom.
AlsakaDan