Not yet being retired (and it may be a long time at this rate of withdrawal) I haven't checked, but is the 2.8% recommended rate below the required minimum IRA/401K/403B withdrawal from the IRS? Could get interesting if one has to set up a second taxed investment portfolio to survive retirement and meet the drawdown requirement.

FYI:
Regards,
Ted
http://www.investmentnews.com/article/20130207/FREE/130209947?template=printart
M* Video & Transcript: http://www.morningstar.com/cover/videocenter.aspx?id=582877

Mr. Auxier runs Auxier Focus Investor AUXFX.
Link to his latest quarterly report:
http://auxierasset.com/2012/12/31/auxier-report-year-end-2012/
Since 1999, this guy knows how to control risk and still beat the market:

Down side and draw down deviations 7.4% and 8.6%, respectively, through end of last year.
He also initiated an institutional share class last year with a bit better ER of 1.1 for $250K min versus 1.25 for investor class. Auxier AUM is currently $270M, up from $147M when David first profiled AUXFX a couple years back, now archived.
From Mr. Auxier's latest commentary:

The power of compounding is so phenomenal that a long-term investor should strive to avoid losses that interrupt the process. We did not believe the Federal Reserve would instigate an $85 billion a month bond buying campaign, dubbed “unlimited QE,” that’s focused on the unemployment level. Allocating roughly a trillion dollars at today’s record-high bond prices makes no sense. Excessive borrowing to buy wildly overpriced assets are common causes of capital destruction. Misallocation based on extremely easy credit has contributed materially to the two major market declines in the past 12 years. This past year the mindless rush for yield drove investors into the danger zone once again. “Stretching for yield” without understanding the source or true risk for yield contributed to the financial crisis in 2008. This year, across the globe, total central bank stimulus could exceed $8 trillion. This is unprecedented, can’t be ignored, and provides a powerful but artificial tailwind for equities.

Prospective investors in the Fund often ask why we steadfastly avoid such high-profile tech stocks as Apple and Facebook that dominate coverage on CNBC and other financial media. Our answer is that we prefer to own comparatively mundane businesses like Unilever and Tesco PLC that actually have benefited from technology’s inexorable march toward lower unit prices and profit margins.

And from David's original profile:

Management’s Stake in the Fund: rather more than $2,000,000. Mr. Auxier reports investing his entire personal retirement into the fund and has committed to never selling a single share while he still manages the fund. The company reports that “everymember of the Auxier team has significant percentages of their personal net worth invested in the Auxier Focus Fund.”

Reply to @bee: I tend toward skepticism of total bond funds, for the reason Teresa Kong shared - they are weighted based on how much debt you've already issued rather than on how creditworthy you are. That said, there are two funds that implement a strategy much like that. Fidelity has a Four-in-One Index fund and TIAA-CREF has, in their retirement line-up, a set of Lifecycle index funds.
For what it's worth,
David

It's been vexing me for a long while now, which is why I haven't said much.
In general, I think a long-term holding needs to minimize manager risk and to accord a fair degree of flexibility to the manager. That is, I'd be reluctant to box someone tightly in. Beyond that, it needs to be as inexpensive as possible.
Beyond that, I think that the fund would have a fair and opportunistic exposure to growth drivers; that is, the ability to expertly harness things that demographic changes favoring the emerging markets or the prospect of tens of trillions in infrastructure spending. It's tough to have broad enough expertise, though, to do more than dabble dangerously in some of those niches.
So probably a tactical allocation sort of fund (mostly stocks with the opportunity to invest elsewhere), a strategic income fund (mostly fixed-income with the opportunity to invest elsewhere) and an emerging markets balanced fund (mostly e.m. equities with the opportunity to invest elsewhere, increasingly called "multi-asset" funds).
For what interest it holds, here's what I actually own:
Northern Global Tactical Asset Allocation (BBALX) - a very low-cost fund of index funds with a tactical overlay.
FPA Crescent (FPACX) - a reasonably low-cost fund whose manager famously roams over the world's capital markets, investing (successfully) here and there, in equity, debt and alternatives.
Matthews Asia Strategic Income (MAINX) - a reasonably low-cost package of Asian fixed-income with a dash of equities, managed by one of the bright younger stars in the best Asian manager.
T. Rowe Price Spectrum Income (RPSIX) - a low-cost fund of actively managed, income-oriented funds which offers a broad basket of global fixed-income funds with a dash (up to 20%) in dividend-paying equities.
Seafarer Overseas Growth & Income (SFGIX) - an Asia-centric, equity-centric emerging markets fund that diversifies outside of Asia, outside of equities and even outside of the emerging markets.
Matthews Asian Growth & Income (MACSX) - the Asia-only version of Seafarer.
I also have owned two Artisan funds from about the day they opened (Artisan Small Cap Value, Artisan International Value) and one cash-management fund (RiverPark Short-Term High Yield).
The collection is currently about 60% stocks, 15% cash, 15% bonds, 10% other. That's my non-retirement portfolio. The allocation is a bit risky for something with an indeterminate time horizon, but the managers are - on whole - really quite risk conscious so I've been happy.
For what interest it holds,
David

Reply to @Flack: Had I been into "statistical" analysis and even more so had I been a disciple of Bogle, my retirement nest egg would be but a fraction of its present value.
As is often said on this board, it's different strokes for different folks. We are all wired differently and in this game it pays to march to the beat of a different drummer.

Reply to @andrei:
Hi Andrei,
I fully understand your frustration with an investment policy that passively seeks average performance. To most, that is unappealing because it appears like a cowardly surrender before the battle begins. The behavioral researchers would enjoy a field day with such thinking and the anxiety must be overcome on a personal level. Not easily done. Nobody wants to be labeled as just average.
I partially converted to the passive Index policy about 15 years ago after reading John Bogle’s “Common Sense on Mutual Funds” book. Since that milestone moment, I have continued my conversion incrementally; I prefer small steps, especially when investing retirement money.
The general public has matched my trickle towards index holdings, but institutional investors have increasingly flooded that trickle into a tsunami. In spite of their human and capital resources, these institutions are finally getting the message. They are so talented at what they do that they are neutralizing each other, and nobody can maintain a competitive advantage. Thus who wins and who loses (they basically distribute the market returns according to Bill Sharpe) becomes a roll of the dice. This equally matched and dedicated talent pool means that performance persistence is illusive.
Even with some giant institutions becoming major participants, Indexing is still a small fraction of daily market trades, and is likely to remain that way. That’s a good thing since the daily trading establishes the market price, keeps it fresh, and reasonably efficient.
Now let’s focus on issues surrounding the collection of merely average returns. That may seem unexciting on an annual basis, especially when contrasted against some rock-star performers. But remember, even on the short-term single year standard, Index players will outperform two-thirds of all the market participants. And if an Index strategy is consistently applied, the Indexers ranking on the rewards ladder will soar upward over time. That accumulated effect is the product of always taking an annual position that has an above average likelihood of winning over half the market participants. It is simply an exploitation of the odds strategy.
That ladder climbing is almost a certainty because year-after-year the Index policy will generate average returns while the superstars will have a few bad years slipped into their highly successful years. Make up is tough sledding; end wealth erodes quickly. It is integrated Indexing consistency that makes a champion investor destined to outperform 90 % of the market participants over the long haul. This seems to be a remake of the children’s tortoise and hare story. It is.
It is also salient to note that rock-stars all too often flash destroy, giving themselves rather than the market exaggerated credit for their success.
Ken Heebner is the poster-child for the hero turned villain turned hero again professional money manager. His annual returns volatility is breathtaking. At times his average returns are very attractive, but his clients still lose money because of poor entry-exit point tactics. To paraphrase Paul Simon, investment gurus keep slip-sliding away. Many are ephemeral players; a few do have staying power and deserve special attention.
Experience teaches that no single investment strategy works forever or under all market circumstances. Styles change.
Look, you’re a serious investor, and are totally capable of making your own investment decisions. It’s good to get other’s opinions, but in the end, you are the master of your portfolio construction, not of its performance. In the final analysis you will not “stay the course” with your portfolio unless you are comfortable with the overall choices you made and the investment policy you adopted.
The key is that you understand and fully endorse your freedom of policy design and product choice. Remember, nothing is permanent. You always retain the option to change your mind and your investments, including an overarching strategy adjustment. Also, investing is not an either/or set of decisions. You can elect to sit on the sidelines or you can move incrementally. You choose and bear full responsibility.
Best Wishes.

Reply to @andrei:
Hi Andrei,
Indeed, not all wizards in any complex field of endeavor are equal. There is always a distribution of skill, experience, resources, and luck. If you ever participated in competitive sports this becomes abundantly clear at an early age. There are always a few good men, and women too
But it is a Herculean chore to identify these talented individuals, that special market environments make into a superstar because of an amplifying convergence of market conditions and their special talents, before that transient resonance juxtaposition vanishes in a dynamic investment sea change.
That’s a mouthful to swallow. Sometimes the marketplace and the experts investment concepts just merge together to form a single entity, and profits soar. But markets precipitously change and wizards don’t easily adapt. It is not that the expert has suddenly become dumb. Just what worked so beautifully in the recent past, no longer is awarded outsized profits. Change happens.
It happened to Legg Mason’s Bill Miller. It happened to PIMCO’s Bill Gross. It has impacted mutual fund performance at the very experienced Dodge and Cox outfit. It has heaped havoc on the American family of funds performance. No person or organization is immune from such a rapid change in fortunes. Everyone is exposed to downward performance perturbations.
The industry is littered with such serious and costly mishaps. That is why the industries fund demise rate is so high. These disasters typically don’t occur in well run Index operations.
Even apparently actively managed funds with a stated divergent investment policy seem to exhibit a performance track record that is surprisingly similar. I recommend you conduct a few experiments along this line of inquiry using the Morningstar fund plotting tool, and contrasting the records of candidate funds in the same category as a function of time. These comparisons might better inform your decision making process. It makes no sense to pay extra above Index costs for nonexistent or ephemeral diversity.
Andrei, you are precisely on target with your objective to lower your overall portfolio’s risk by controlling its volatility sensitivity. However, that is probably best accomplished by investment category diversification rather than by an individual manager’s ability to do so.
In an earlier post, I quoted Julius Caesar: “Don’t be consumed by small matters”. Category diversification is the dominant player when addressing volatility control issues.
As I mentioned in previous submittals, I plan to modify my portfolio towards the more passive class. However, I do plan to retain a small percentage of actively managed mutual funds. I can not completely dismiss the excess returns challenge, and the gambling trill that accompanies it. But it will be small enough such that our retirement survival prospects are never put at risk.
Best Wishes.

FYI: Read reason #2, read it again. There are a number of people on this board who's investment strategy is at all costs avoid losing money. If you want to make money, it requires taking risk not to be confused with volatility
Regards,
Ted
http://www.marketwatch.com/Story/story/print?guid=8CBE259D-8138-4C3A-88A8-4ECDFD6E427F

Howdy Skeeter,
Heck, I sure don't have a problem with anyone for how and what they choose to fund their portfolio(s).
As I noted several days ago, I find no problem with having several multi-sector bond funds, cause they sure don't act the same and one has added more diversity into this portfolio group.
Now, if one has several active managed funds in a narrow sector; that may be another cosideration. This could be more true using only etf's or indexes.
Skeeter, not unlike your situation; we currently have numerous acct. positions within difference retirement accts using different vendors. These will get the big blend in the near future.
You got your groove on handling your mix with your methodology that is providing results. This is the important part, eh? You surely are way out in front of this house's returns so far.
Lastly, with the technology we have at our fingertips; it is not difficult to monitor numerous holdings; unless one is a trader using etf's and related.
Although we are still in the grips of winter here in MI; I can't believe that Daytona is not far away on the calendar. I didn't get much of a chance last year, to view many races; but will always do this one and 'Dega.
Take care down there,
Catch

Reply to @hank:

"Perhaps our house should just grab the best 10 balanced/flexible funds, and let the money ride ..."
Yep - not a bad long range approach for a conservative fellow. Problem is: even so-called balanced funds are designed for long-term investors (think 5-10 year time horizon.) For one intent on monitoring returns weekly or monthly they're as apt to disappoint as to please.

Unless you will need all of your retirement monies in 5 years, having a portion of your monies invested in balanced/allocation fund is reasonable.
People can and do live 20-30 years after reaching the retirement age. So, you have to have a portion of your assets invested in moderate growth, moderate risk funds. I think equity exposure of the portfolio should not be lower than 20%.

It's easier to have some degree of balance in a portfolio and really a perspective that's longer than the near-term. Otherwise, things can certainly become problematic and/or "funk"y at times.
If you're all bonds, you're bummed today. If you're all equity, you're bummed the next time the market tanks. If you're nearly all Asia (which Max was for a while), then I'd guess you're not thrilled when Asia underperforms for 3-6 mo.
You don't HAVE to have balance - especially if you strongly believe in something - but if you don't have balance, then you have to be wiling to accept days, weeks and possibly months of underperformance.
I really have no interest in fixed income and don't find it appealing at the moment, so I'm mostly equity - but that's my choice. Catch has done remarkably well with nearly all bonds, but I don't understand how fixed income can continue performing as it has. Maybe I'll be totally wrong, but I can accept that.
Here's the thing that would concern me if I was all bond or equity though; if you're not balanced and are all bonds (for example) and you can imagine that - at some point in the near future - you want to switch a significant amount of your portfolio to equities, that's really a major instance of having to time the market to optimally make that switch, and that - at least to me - is really unappealing. If you have some degree of balance, you can tweak things in a much easier and more relaxed fashion.
As for a need to be conservative, I absolutely respect that people want to be more conservative as they move towards/into retirement age, but I do think there are relatiely low-risk ways to get equity exposure - there's a lot of Johnson and Johnson type plays that are dull ways to get equity exposure and a nice yield that may rise over time.J & J is never going to be a home run (although it's done pretty well in the last year or so), but it also only lost about 10% in 2008.
J & J (and Procter/Gamble and the like) are going to have their problems occasionally, but there are certainly names out there that a person in retirement age could add and not have to feel overly concerned by the day-to-day and collect the 3-3.5% yield. From what I continue to see, consumer staples companies are certainly increasing prices.

I too have what many consider as too many funds.
Specifically 24 unique funds are spread over 5 accounts compromising 68 positions at the moment (excluding cash which is very small if any). Top 10 funds make 62% of the portfolio. If I include one more fund to cover all funds above 4% allocation, I have 66% of the portfolio in 11 funds. Largest fund has about 9% allocation. These accounts belong to me and to my wife. I consider the totality of these accounts as the retirement portfolio.
I tend to own the very same funds in different accounts so the total number of positions is much more as a result. I also like to maintain similar asset allocation in most accounts.
The smallest account has only one fund. My largest account is my Rollover IRA which has 21 mutual fund positions but has several one off funds that are not shared by the other accounts. A few are small positions that I maintain because the fund is closed and I might choose to increase to a significant allocation in the future if necessary. A couple funds are only available NTF in a particular broker so it is not possible to own the same fund in all in those situations and I have different funds. A couple are intended to be short term trading positions.
For actively managed funds I would like to spread the manager risk to several funds. This also contributes to the larger fund collection. If one is mostly using index/passive funds there is probably no reason to do this. If I were a purely index investor and covering the same asset classes, I could reduce the number of funds to may be around 10-12.
Anyway, what I am trying to say that I understand how one can end up with large number of funds. With online access to the accounts it is really not that difficult to manage these days.
Having said all that I intend to reduce the number to 20.

Owning only a multisector bond fund over the last year you would be no worse or better off than if they had invested solely in VTI...probably better off if in retirement because of the lower volatility of the bond fund.
Adding EDV (long duration treasuries) to this chart shows (in my mind) how important other types of bonds are to a portfolio mix that include equities. I'm seeing valuing in buying EDV with profits from VTI or any other equity fund that is out performing right now.

Different strokes for different folks. If the idea of spreading risk over many funds is comforting to an investor, then owning many funds has it's purpose. It's not my style. I have essentially about 13 "core" funds and I like to tweak my equity balance (with-in a range) using index and the TRP retirement target date funds. The core funds keep about a 50:50 mix of equity/fixed by themselves. Part of the reason I use index and target funds to adjust equities is because of the way my 401k is set up. I can move within index funds and target date funds without timing restrictions.
What is more important and what will contribute most to Skeeter's overall returns will be his portfolio balance using his valuation criteria. Not the number of funds he holds. At least in my sometimes less than humble opinion :) And for me, even using many less funds, I can still use the basic Skeeter 'range-valuation' method.
Thanks again Skeeter.

Reply to @Anna:
I think there are two different question here. One is borrowing vs. withdrawing, and the other is withdrawing vs. suspending. I'll assume for the sake of argument that a withdrawal is covered by one of the penalty exceptions (e.g. first home), so that all that one would owe is ordinary taxes on the withdrawal.
To take your question first - suspend vs. withdraw. Yes, in that case, the two situations are the same. If one contributes, say, $400 to a 401K and then withdraws it, then one sees $400 reduction in income (due to the contribution), but also $400 in extra income (due to the withdrawal). These cancel out, and it's as if you didn't contribute at all, i.e. the same effect as suspending. Notice that we didn't even have to assume anything about tax brackets here.
But borrowing comes out better than withdrawing (or suspending, which we've just seen, is equivalent to withdrawing). That's because you have the ability to put borrowed money back into a sheltered account. You lose that ability if you withdraw money.
If you withdraw money, then you pay taxes on it, say 25%. So if you withdraw $400, you pay $100 in taxes and have $300 to use. When you pay yourself back, you've got $300 in a taxable account. Say that the money doubles by the time you retire. You've got $600, but a tax liability on the gain of $300. You'll owe at least $45 in taxes (15% cap gains rate).
On the other hand, suppose you borrowed $300 (leaving $100 in the 401k). When you pay back the loan, you'll have the original $400 in the 401K. Again, say that the money doubles by the time you retire. The 401K now has $800 in it. You withdraw the money and pay 25% in taxes ($200). You're left with $600. Notice that here we did need to assume same tax bracket in retirement.
[ It turns out that this is the same logic that is used to show that contributing to a Roth is better than contributing pre-tax assuming one maxes out. If one doesn't max out and if tax rates don't change, then pre- and post-tax contributions come out the same. ]
But there are other factors to consider. As the article points out, if you borrow against a 401K and then leave a job, you have to repay the loan quickly, else it is treated as a withdrawal (which could push you into a higher tax bracket, voiding all the calculations above).
Also, I wrote about borrowing against a 401K and not an IRA because one cannot borrow from an IRA. (One can "touch" IRA money for 60 days before returning it as a rollover - even to the same IRA - but I figure that's not the type of "loan" we're talking about here.)

It's all kind of silly, isn't it? Less and less employers are offering a match so there is really no point to the IRA rules as long as the taxes are paid. After all if there is no match the best way to borrow from your retirement savings is just to suspend contributions. If the tax bracket doesn't change, the effect is the same as withdrawing the same amount, isn't it?

We sold our position in HAFLX on the day after learning that it would be liquidated. I have been tracking MFCFX (ER 1.43%) since the new managers took over on 7/20/12. If I were to re-enter this fund, I would buy the lower cost CCMZX (ER 1.25%), which is available at Scottrade for a $100 minimum in taxable and retirement accounts with no TF.
We own PVSYX which may also invest across a company's capital structure like MFCFX, although it targets leveraged companies. PVSYX is multicap with a much lower average market cap than the LCG MFCFX. So PVSYX is not a direct substitute for MFCFX.
Kevin

I want to add my Thank You to David and everyone else involved with the conference call. Teresa Kong's comments added to the list of reasons that resulted in my investment in MAINX a few months ago. Basically, the foreign bond segment of my taxable "retirement" portfolio (I am "retired" and withdraw a measured amount from that account each quarter) appeared to be under weighting Asia. MAINX appeared to provide a balanced way to increase my bond exposure to that dynamic region of the world. After the call, it continues to appear that way. The mix in that account will keep its equal parts of FNMIX, MAINX, DIBRX, and TTRCX for now.
Thanks again.
davfor

I wonder what "mark" they're missing?
The article focuses on 2015 Date funds. It makes one interesting observation: since 2009, their target asset-allocation has decreased from 49% to 40%. As market-timing generally goes, that was a poorly timed though the article offers no particular evidence that a 40% allocation is inappropriate for someone within a couple years of retirement.
Their other argument, about returns, strikes me as silly. In 2012, funds with this target date made 10.6%, only 66% of the S&P 500's return. Uhhh ... they had only 40% exposure to the stock market but generated 66% of its gains? On face, that seems like exceeding the mark by a lot.
The difference isn't made up for by their bond allocation alone since the bond aggregate rose just 4% last year. On average, 40% stocks/60% bonds should have led to a portfolio return of 8.8% but these guys managed 10.6%.
David