Howdy,
Again, a thank you to all who post the links and also start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... I know you know, those little steel balls in the handheld games where one tilts and moves the flat base around to drop the balls into holes, or pass through a maze or some other quest. You may have one of these stashed away in a drawer at home. Well, I envison such a game from time to time and presume my game board and the holes represent investment choices. There are 20 holes in the base board representing the investment sector choices; but there are only 10 steel balls. Hey, I can do this with enough time, practice and experience. Cool, I got the balls into the holes of choice. Whoops, who bumped my board? Ah, that's it. While I slept, someone else was messing around with my game board. As you may assume by now; after placing the steel balls into the investment sector holes of my choice; I find during one practice event with the board, the sensation of other hands also attempting to move the board. Now this hole alignment thing is hard enough; let alone another set of hands trying to override my moves. I'm sure your understand my connective note about this board game and the others who are also playing with our game; even while we sleep. Keep your thinking caps in place, be patient and continue to assess your own risk and reward behaviors. There always will be others who are messing around with your game.
#72 There also exists rules 69 and 70. These, of course; are the simple, quick and dirt methods using head math to rough guage investment return rates; although these may be used for other caluclations, too. I know some here question why I would bother with such a note about the rule of 72. I will note that there have been more than enough adults whom I have encountered over the years who have never heard of the rule; so I will assume this may apply here, too; and that I/we have no way of knowing how many first time and young investors may be reading through the posts here at MFO. The number 72 has many of the easy factor numbers from multiplication that most folks learn in the 4th grade. So, one conjures that their portfolio is able to return about 6%/year with proper management. How long before one may be close to doubling their monies, from a set value? Divide 72 by 6 (annual % return); and one finds about 12 years are required to double the worth of the original investment dollars. Now, if one is really good with money; and gathers returns of 35%/year; the money will double in worth in just about 2 years. Okay, enough for this.
Sideways, with a twist. This is what our current portfolio could be named. A little bit of this and a little bit of that, with a yield average of about 4.7%; awaiting to find if there is more than sideways markets in our near future, and where and what may be the sectors.
Well, just some out loud thinking and writing.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh?
Hey, I probably forgot something; and hopefully the words make some sense.
Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
SELLs/BUYs THIS PAST WEEK:
NONE
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 3.3% + .4 week
PRPFX ....YTD = + 6.6% - 1.3 week
SIRRX .....YTD = + 1.5% + .3 week
HSTRX ....YTD = + .81% + .2 week
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a + .34 % move this past week. A M* returns list I really like. Click the link just below.
http://news.morningstar.com/index/indexReturn.html?msection=IdxReturns
Many equity markets were just kinda hanging around this week; with the exception of the U.S. small/mid cap area, which received a slight haircut. Treasury yields still indicate a bit of an edge for some investors; or at the very least a parking spot for some extra cash. Yields in most Treasury durations ended the week in the down range, with prices reflected upward. The old Funds Boat is at anchor, riding in the small waves; watching the weather and keeping the existing cargo. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

Reply to @catch22: Financial Engine provides a comprehensive picture using Monte Carlo simulation. It allows quite a few inputs including social security, retirement pension plan, tax-deferred accounts, properties, taxable accounts, expected return... Similar to what you provide above, it gives you the probability to reaching your goal.
Vanguard used to offer Financial Engine as free tool in retirement planning, but I can't located it right now. I wonder if they have eliminated it for cost saving.

Hi msf,
I should have had that extra cup of coffee. You are correct. I reversed my fee numbers between the old and new VA accts offered at Fidelity.
And has been mentioned, and too which I agree; there may be a place for using the Fido VA's when other avenues are not available.
The current list of funds (54) does provide a fairly decent choice of investments.
I have not looked at all of the funds for ER; but a quick glance and guess would indicate about a 1% average ER.
Our current retirement accts holdings ER average is .70%; and we know there are numerous folks who are paying much higher than 1%, especially if also paying adviser fees.
Anyhoo, if I was using the Fido VA; I suppose I would prefer to take my chances of compounding the non-taxed earnings each year; versus the monies being taxed at current rates for cap gains and dividends. Maybe a coin toss for the winning totals at the end, eh?
Thank you for your input, msf.
Regards,
Catch

Agree with others that VA should not be used before some other forms of tax-sheltered investments (notably IRAs and defined contribution plans).
Catch - I think that what you were looking at was the older VA that Fidelity used to offer - Retirement Reserves. This had an 80 basis pt wrapper (it was originally 100 basis pts when it firts launched), plus underlying fund fees, and insured return of premium. The current plan, Personal Retirement Annuity, costs 25 basis points plus underlying fund fees. It is still technically insurance, and guarantees return of accumulated value (i.e. what you've currently got in the underlying funds). Now to you and to me, that doesn't sound like any insurance at all, yet it's treated as insurance, and thus regulated on the state level and not by the SEC.
A VA is like a cross between a non-deductible IRA and a 401k plan, taking the worst attributes of both. Like the non-deductible IRA you get no immediate tax benefit, and capital gains are transmuted into ordinary income. Like the 401K, you investment options are limited to what's in the plan. The calculations on whether it pays (after exhausting other options) are very similar to deciding whether a non-deductible IRA makes sense. And the answer is: sometimes, but generally only if you'll have money in it for decades. (Otherwise, the transmutation of cap gains into ordinary income costs more than the tax sheltering saves.)
Finally, note that there's nothing about "variable annuity" that says "deferred". There are immediate VAs, and given the low interest rate environment we're in, might even make more sense than the traditional (fixed) immediate annuity.

What you are looking is Monte-Carlo simulation to evaluate portfolio survivability.
If you have an account at Fidelity, Fidelity provides a Retirement Income Calculator which does Monte Carlo simulations.
A better alternative is to use Financial Engines. It is available free from a number of Retirement Plans. You can also have a trial access at:
https://www.financialengines.com/FeContent?act=presswelcome

I'm happy to agree that VAs are not good products for most people. But while I like Scott Burns, this article is filled with distortions and half-truths.
"[A] death benefit ... guarantees that your designated beneficiaries will get your original investment, even if the value of the investment has declined."
Not necessarily. All policies (I believe) must have a death benefit to be qualified as insurance. But that death benefit can be as simple as promising to pay your beneficiaries the current value of the underlying portfolio. For example, by default Vanguard offers what it calls an "Accumulated Value Option" for its death benefit. The traditional death benefit that Burns is referring to, Vanguard calls "Return of Premium Option", and Vanguard adds 0.2% to the cost for this option. TIAA-CREF similarly offers a barebones return of premium death benefit as default and offers the return of premium option for 10 basis points extra. Fidelity used to offer a VA with return of premium (Retirement Reserves); it cost 55 basis points more than its current annuity offering, Personal Retirement Annuity, that doesn't even come with a return of premium option.
The point is that VA costs don't have to be as high as he's claiming - because he's claiming they have to offer a benefit (return of premium), when they don't. (A second point is that the death benefit is a huge profit add-on for the insurance companies - just compare what Vanguard and TIAA-CREF charge, at cost, vs. what Fidelity charged when it was using it for profit in a "low cost, no load" annuity.)
"A typical variable annuity ... has an average annual insurance cost of about 1% [and] another 0.75% to manage the basic [underlying domestic equity fund. ... As a consequence, the insurance company skims 1.75% or more ..."
I won't harp on his hyperbolic "or more", other than to note that since these are average figures, it could just as easily be "or less". Rather, I want to focus on his blaming the insurance company for "skimming" the whole amount, including the fund management fees. If I buy a fund through a brokerage, the brokerage may or may not charge me some fees, but the money that goes toward managing the fund isn't "skimmed" by the brokerage - it goes to the fund management company. Same here. In fact, Burns forgets to point out that the average (non-dollar weighted) management fee for domestic equities is somewhere around 1%, so you're getting something of a break with VAs, as they tend to use "institutional-like" funds. That doesn't make up for the average wrap fee, but it does mitigate it.
Finally, while he chooses to use "average" cost figures for VAs, he picks index funds (rather than average domestic funds as he did for the VAs), and even among index funds, he picks the cheapest. If he picked the cheapest VAs, with the cheapest death benefits, and the cheapest funds within those VAs, and then considered the fact that the "average" investor sells funds every (what, 2-3 years?), and factors in the tax impact of those trades, he'd come up with some different conclusions, or at least figures that were a lot more honest.

I tend to move really slowly in realigning my portfolio. Among the things I could imagine doing:
1. noticeably increasing my allocation to River Park Short-Term High Yield (RPHYX). The rationale is that I'm way low on "cash" in my non-retirement portfolio because I used a chunk (returning 0%) to eliminate debt (3.5%) and cover an unexpected household expense.
2. liquidating my Matthews Asian Growth & Income (MACSX) position and reallocating to Matthews Asia Strategic Income (MAINX) and Seafarer Overseas Growth & Income (SIGIX). That would be hard for me, given my happy history with MACSX but it would open two new opportunity sets and still keep me in my comfort zone (Matthews + Foster).
3. liquidating Leuthold Global (GLBLX) and moving the money into Vanguard STAR (VGSTX) or Northern Global Tactical Asset Allocation (BBALX). Since inception, Leuthold has substantially beaten Morningstar's "world allocation" peer group but has trailed both of the two alternatives. It's a little more volatile and a lot more expensive but it also has theoretically greater flexibility than either of the other two. Much of the lag occurred in the six months after launch (in the midst of the meltdown) when the other two had a structural stake in Treasury bonds. I could move the money into another core holding, FPA Crescent (FPACX), though that does increase my exposure to manager risk. Romick has been excellent for me.
Just pondering,
David

Reply to @bee: Hi Bee. I wouldn't go much with Bloomberg's classification. If you look at the ETF's on this list, they are basically just high yield bond funds. PGDIX does have a good percentage in junk also, ~36%. But it also diversifies it's portfolio into emerging debt, REIT's, preferred securities, dividend producing value stocks, infrastructure and MLP's. Though there may be similar funds out there, this one seems unique to me. If there were such a category, I'd call it an alternative income. M* puts it in the 'world allocation" cat. I've also seen it listed as conservative allocation. So, I guess categorizing funds that use a variety of securities is tough to do.
I purchased this fund in my 401k through TRP. No load. I think the exp ratio was ~0.8. Not sure what the minimum is but I believe it's low, $2000? range.
This is just an idea. When you mentioned 1 fund to draw off income, this one range a bell. From the web site I attached in the 1st post, it suggests who might benefit from this fund.:
Helping to Meet Client Objectives
Many investors are looking for sources of monthly distributions, whether to fund a retirement lifestyle or meet other income needs. The Principal Global Diversified Income Fund is designed to offer several potential benefits to a traditional fixed-income portfolio:
Increased investment yield potential with greater diversification
Exposure to equity securities within a predominantly fixed-income portfolio
Addition of “non-core” asset classes with multiple experienced managers
Convenience of a diversified portfolio within a single position
Leveraging asset class diversity around the world with the expertise of a global investment management team

Howdy,
This is a very generic retirement calculator; but have some fun with this.
The 3 slider bar amounts are at default values, so you may adjust these to your own values.
The 3 allocation choices are also at default settings.
The calculator is likely to only be of value to those in or near retirement. However, it is interesting
to find the variance in the assumptions of how long "x" amount of money will last when changing
the 3 allocation choices. In particular, I "0'ed" the cash and and varied to the mix between equity
and bond holdings to find what mattered the most.
NOTE: read the footnotes below the simulator section first, to obtain a clearer baseline of how the
numbers are crunched. Also, Vanguard had a real sweet calculator in the late 90's; but is no longer
available. One could really tweak the input data. And those type of Monte Carlo programs
are out there on the "net".
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf
Have fun.
Regards,
Catch

Interesting, though it suffers some of the same deficiencies that it complains about.
Basically, it is saying that if the absolute bare minimum you're willing to accept in income (draw) is less than the standard 4% (or whatever), then you can withdraw at a higher rate. But be prepared to drop down to that bare minimum, because you're significantly increasing the chance (or the amount of years) that will happen.
It is making the same simplification that things remain constant during retirement. The usual 4% withdrawal rate studies assume that the desired cash remains constant (inflation adjusted), while this study assumes that the bare minimum acceptable remains constant. Both are wrong for the same reason - spending patterns shift over retirement. (I think the spending is supposed to start high, as one has the health and relative youth to make use of the money, decline, and then increase as medical expenses rise rapidly.)
I regard the fixed percentage (traditional) studies as a proxy for this change in spending patterns over time. By underestimating what one could spend early, one also has more available for what one may likely need in latest years. Also, one should consider the probability of a catastrophic event - if this occurs early in one's retirement, that can throw all the planning off, especially if one is drawing more heavily.
While this study does consider different risk tolerances, it is addressing only the risk of market fluctuations (portfolio performance) and not the risk of extraordinary events.
Finally, just in terms of utility analysis - the paper discounts the idea that additional dollars (the difference between $60K and $80K) have less utility than base dollars (the difference between $40K and $60). It acknowledges the greater utility of the base dollars, but says that there's still some utility in the later dollars. Sure, but then it flips this argument around and suggests there's little utility in dying with money left on the table if you don't have a strong desire to leave a bequest. But just as there's still some value in the additional dollars, there's also some value in leaving money - one may not have heirs, and one may not care deeply about, say, one's alma mater, but that doesn't mean that leaving money is without value to you.
My takeaway is that one can draw "nonstandard" amounts if one is willing to be flexible, but I think we all knew that. It posits a pretty simplistic definition of flexibility (willingness to drop to a base amount, regardless of whether that happens for one year or thirty). That definition of flexibility does add something to the conversation, but still not enough.

Howdy,
Again, a thank you to all who post the links and also start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... Tinker: the archaic meaning generally reflects to a person who traveled the road and repaired household utensils....metal pots and pans and related. The older reference also indicates a person of the poor working class and uneducated. However, one must consider that this work required a broad-based knowledge of many areas; as one may consider that such a person was also employed to perform many other types of repairs while in the community or at a household. The tinkerer was only uneducated in some areas; not unlike the broad citizenery now. Today, many consider the word to also have the meaning: "To exert one's self for a purpose; to put forth effort for the attainment of an object; to labor; to be engaged in the performance of a task, a duty, or the like." While one's skill set may not be in a particular area of effort; we may still "tinker" around with something; be it planting flowers in the springtime of the year around the house, simple painting of the interior or exterior of the home or simple repairs around the household; be it replacing this or that or a repair of the lawnmower. While these areas may not be our primary knowledge area; we are bright enough to read and consider whether the task is within grasp of the efforts to attain a "decent" outcome; or whether to leave the circumstance to those skilled in the task; to hire someone.
This reflection upon tinker, reminds me of myself and others; we individual investors.
Although I do not know the composition of other's portfolios; I do assume there is "tinkering" in place; now and then.
This brings me to a recurring thought about portfolio tinkering at this house. Some days, tinkering is a lot of fun and one is always learning something. Our house doesn't tinker very much, with only a few funds changing in a year's time. This brings me to the active managed/traditional vs the eft fund. I will note a few quick and dirty numbers; although these eft's would not be my primary choices. Starting with year 2006 and including 2011 returns for these two eft's; VTI and BND , and one having 50% in each, the average return over this period = +3.35%. Our portfolio over the same time period average = +6.4%. To be fair about this compare; VTI is U.S. equity based and had a - 37% in 2008. We sold 84% of our equity portfolio in mid-June of 2008. Obviously, these two holdings views are not twins in construction; and the VTI and BND are indicated with a buy and hold position maintained.
As 1/3 of our account holdings are currently with Fidelity; we have access to 30 etf's that provide nominal exposure to numerous market sectors; and the price is right, too. Beyond this, the brokerage function of the accounts offer whatever etf we may choose, although at a higher cost (trading fees).
The next question this house must answer is whether we may provide similar results as in the past, using etf's for this function. Are we able to find and/or manage etf's that would replace managed mutual funds; several of which, have management skills with which we are most satisfied. Could we be more skilled than the management of FNMIX ? Or FLPSX ? Might it be just as easy and with acceptable results to hold TIP versus FINPX ? I am not assured of this. Even for monies invested in gov't tips bonds, active managers may move among the durations as they feel indicated. We could try to provide a similar exposure using STPZ LTPZ and TIP . Yow......too much work there, eh?
Another question. Would this house become more "twitchy" about moving monies around more frequently? We have not been a house which flips funds often, and we suspect this temperment would be maintained. Although one must consider the low cost of flipping among some etf's.
The question that becomes presented is whether to gather a basket of 12-15 etfs to attempt to match our holdings at any given time. At the very least, we could gather .30-.40% of reduced fund expense fees. M* indicates our current average expense ratio of .70%.
A fling it "here and there" could include lg cap, mid cap, sm cap of a blended and domestic/international flavor. Bond styles could be mix and/or matched to one's choices. Special sectors may be thrown in to suit one's market thoughts or trends. And no, I don't think this house would be or become a "lazy portfolio" of buy and hold. Although some statistics indicate a reversion to the mean for a given market area over time; I know we would still practice our own form of "reversion to our own mean"; attempting to minimize the downside and preserve capital. Time is not in this house's favor. Now if we were 30 years old again..............
A result into the future may be a mix of active managed funds and eft's, or perhaps an index here and there, too.
Well, just some out loud thinking and writing.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh?
Hey, I probably forgot something; and hopefully the words make some sense.
Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
SELLs/BUYs THIS PAST WEEK:
NONE
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 2.9%
PRPFX ....YTD = + 7.9%
SIRRX .....YTD = + 1.5%
HSTRX ....YTD = + .60%
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a + .62 % move this past week. The old Funds Boat is at anchor, riding in the small waves; watching the weather and keeping the existing cargo. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

Hi, hank.
Opened to the public around May, from what I can tell. Price's retirement funds routinely allocate 5% to PRAFX. I've contacted Price's p.r. folks for an explanation of the decision but they are one of the least responsive communication teams that I've dealt with. I'll poke them again.
I should note that the same is true of the Inflation-Focused Bond Fund, which was called Short-Term Income. It balances cash and short-term bonds and served as the ballast for some of their asset allocation products.

Hope this ain't too old or stale - PRAFX was originally created for Price's own use in their target date retirement funds and other fund-of-funds. Not sure when they opened it to the public. Has ridden the commodities and energy wave, posting + 12% YTD. No plans to buy it, but might some day. I currently have commodities exposure with Price's New Era PRENX and Oppenheimer's Commodity Total Return QRAAX. All three appear to use very different approaches to natural resource investing. The Oppenheimer fund is a strange one, keeping around 80% in cash and bonds, but attempting to track a basket of commodities prices with futures contracts and derivatives. (So, that cash & bond allocation might be misleading) FWIW

http://www.sec.gov/Archives/edgar/data/1370177/000137017712000004/rnf497.htm
RIVERNORTH FUNDS
RiverNorth/DoubleLine Strategic Income Fund
(Class I Ticker Symbol: RNSIX)
(Class R Ticker Symbol: RNDLX)
SUPPLEMENT TO PROSPECTUSES DATED FEBRUARY 1, 2012
Effective after March 30, 2012, the RiverNorth/DoubleLine Strategic Income Fund (the "Fund") is closed to new investors. Unless you fit into one of the investor categories described below, you may not invest in the Fund.
You may purchase Fund shares through your existing Fund account and reinvest dividends and capital gains in the Fund if you are:
·
A current Fund shareholder as of March 30, 2012;
·
An investor who has previously entered into a letter of intent with the Fund or RiverNorth Capital Management, LLC prior to March 30, 2012;
·
A participant in a qualified defined contribution retirement plan that offers the Fund as an investment option as of March 30, 2012;
·
A wrap fee program or financial advisory firm charging asset-based fees with existing accounts as of March 30, 2012 purchasing shares on behalf of new and existing clients; or
·
A client who maintains a managed account with RiverNorth Capital Management, LLC
Except as otherwise noted, these restrictions apply to investments made directly with the RiverNorth/DoubleLine Strategic Income Fund through its Transfer Agent and investments made through financial institutions and/or intermediaries. Once an account is closed, additional investments 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. Management reserves the right to (i) make additional exceptions that, in its judgment, do not adversely affect its ability to manage the Fund, (ii) reject any investment or refuse any exception, including those detailed above, that it believes will adversely affect its ability to manage the Fund, and (iii) close and re-open the Fund to new or existing shareholders at any time.
In addition, it should be noted on page 8 of the current prospectus, that because of different class level expenses, the returns for the Class R shares are lower than the returns of the Class I shares which is shown in the prospectus.
Dated: February 23, 2012
RIVERNORTH FUNDS
c/o ALPS Fund Services, Inc.
1290 Broadway, Suite 1100
1-888-848-7569
Please retain this supplement with your Prospectus for future reference.

If I wanted to own the RiverNorth DoubleLine Strategic Income Fund, I would only purchase RNSIX (net expense ratio 1.20%), which is available below the prospectus minimum ($100K) for $25K in Firstrade retirement and taxable accounts. RNDLX has an excessive expense ratio of 1.45% for a multisector bond fund. Net expense ratio details here:
http://www.rivernorthfunds.com/rndlx-rnsix-fund_info.php
I refuse to pay over a 1% expense ratio for any bond fund, so I do not own and I am not interested in owning either class of this fund.
In this space, I prefer ADBLX (0.95% ER, minimums $2500 taxable/$500 retirement) or preferably, ADLIX (0.70% ER, $100K minimums both taxable and retirement). We own DBLFX, but will likely convert our position into ADLIX in the near future.
Kevin

Follow the money...First, thank you Kenster1 for the link. It's not my intent to disparage Mr. Rodriguez or his financial prowess, knowing his investment credentials to be solid. Did, however, wonder why I'd never received a solicitation from IPI. Guessing most of us probably haven't:
"In 2011 IPI was acquired by Campden Media, which serves ultra-affluent business-owning and fnancial families worldwide."
https://www.memberlink.net/about-ipi
... Rodriguez starts off slow and subtle - like a walk through the park. Along the way, however, come the inevitable comparisons to Europe and Japan - followed by admonitions we better cut Social Security, Medicare and other social welfare programs lest we wind up just like them rascals. Nothin about how he'd help the near third of families living in or close to poverty, the disappearing middle-class, seniors whose pensions been gutted, or kids that can't afford college. Or, for that matter, the outrageous disparity of wealth - where half resides in the hands of the upper 2 or 3%.
By way of perspective: (1) Parallels to Japan and Europe are easy to make rhetorically, but an awful big leap in terms of culture, resources, history, institutions and other. Having lived through the 70s and 80s, recall similar rhetoric (invariably from the party out of power) that we weren't doing enough to emulate Japan - and would surely be left behind in their dust. (2) If he wants to insist on those dire projections, then, speaking to a group of affluent investors, why not focus on how to protect and grow their already enormous wealth? Which assets or companies will do well under the future he envisions? Knowing the proclivity of politicians to bite the bullet tough on fiscal matters, I'd guess he's already stashed his $$ in them safe havens - whatever he identifies them to be. (3) His "slash and burn" rhetoric may have received a generous ovation. What have the "ultra affluent" got to fear? For Aunt Millie struggling to subside in retirement or the neighbor without work, it's likely a whole different ball game.
The board ain't for politics and social change. But when a money manager invokes it under the guise of investing, than fair enough. Now, budgets consist of income and outflow. Did he mention any reductions in defense spending? If so, I missed it. He talks of a more equitable tax system, but that's pretty vague. How about the Buffet proposal wherein millionaires would have to pay at least 30% in taxes each year? My social security's currently taxed at around 20%. But a big name millionaire running for President paid 16% last year. Didn't hear Rodriguez mention that. My budget's in balance. Yours probably is. Truth is this country's budget's rarely been balanced since at least Hoover's time.* We done pretty well from 1940s to 2008 - and that included a world war, a space race, and several smaller wars. You'll find a fair number of economists who don't think it should be balanced. I don't know, just saying beware solutions put forth in forums devoted to the super rich.
*Recent Presidents who submitted balanced budgets:
Eisenhower 3
Nixon 1
Clinton 1

I am potentially interested in the Natixis Managed Futures Fund. Unfortunately, the class A shares have a one million dollar minimum to avoid the 5% load! The C class shares avoid the 1M minimum but have a 1% higher annual fee.
I called Natixis and they were oddly cagey about how one could buy yet avoid this fee. They did say the class Y shares don't pay the fee but "ordinarily" aren't available to the retail investor. They told me to read the prospectus. I looked at the prospectus and it was also confusing on the Y shares. It reads:
Class Y shares of the Fund may be purchased by the following entities at the following investment minimums.
A minimum initial investment of $100,000 and the minimum subsequent investment of $100 for:
• Other mutual funds, endowments, foundations, bank trust departments or trust companies.
There is no initial or subsequent investment minimum for:
• Wrap Fee Programs of certain broker-dealers, the advisers or Natixis Distributors, L.P. (the “Distributor”). Such wrap fee programs may be
subject to additional or different conditions, including a wrap account fee. Each broker-dealer is responsible for transmitting to its customer a
schedule of fees and other information regarding any such conditions.
• Retirement Plans such as 401(a), 401(k) or 457 plans.
• Certain Individual Retirement Accounts if the amounts invested represent rollover distributions from investments by any of the retirement
plans invested in the Fund as set forth above.
• Registered Investment Advisers investing on behalf of clients in exchange for an advisory, management or consulting fee.
• FundTrustees, former Fund trustees, employees of affiliates of the Natixis Funds and other individuals who are affiliated with any Natixis
Fund (this also applies to any spouse, parents, children, siblings, grandparents, grandchildren and in-laws of those mentioned) and Natixis affiliate
employee benefit plans.
I don't know if Y shares is a generic term that means the same for all funds or if each fund family defines Y shares differently. Any ideas or suggestions on ways to avoid a sales load without paying higher management fees would be appreciated. Unfortunately I would be holding this outside of a retirement plan so I don't qualify in that regard. Thanks.

Howdy Anonymous OD:
You note: "A debt to GDP analysis ignores the fact that while the liability side of America's balance sheet has grown enormous so have its assets. There is immense wealth in America--well over $60 trillion--part of which could be used to pay down that debt gradually over time if capital gains, income and estate taxes weren't close to as low as they ever have been in the last 70 years. Rodriguez completely ignores this fact to attack entitlements and say they must be cut to save the nation. He never even mentions that maybe taxes should go up. "
>>>>> liability side The liability is in the current low interest rate environment. Wait until interest rates increase and the "minimum payment" due on the old credit card moves to newer highs.
>>>>>$60 trillion $60 trillion of what and from what time period? Part of which could be used to pay down the debt??? I presume that you consider that if each and every American paid their fair share of the reported $140 K liability of Federal debt burden; that the D.C. machine would reform and not piss any new money down the drain, eh? What would be a fair amount of monies to tax in the form of capital gains, income and estate taxes? And from whom would these monies arrive? Do you consider that any monies the taxing authority(s) choose to remove from the public are monies that are not spent into the economy? Where is the breaking point of no returns to this action? When governments choose to tax and spend; the consideration of enlightened spending must be a consideration that the government knows best of how to allocate the monies. Yes, there are functions of which a well run and efficient government is better able to provide for the citizens with a scale of volume. One may suspect that this type of government is only written about in books of theory.
>>>>>attack entitlements This covers a lot of ground. Which entitlements? Home mortgage deduction, child care credits, minimum earned income credit? Don't forget the almost tax free status of muni bond investments. Even retirement programs (401k's and related) are entitlements, eh? Lets get rid of those, too.
Too many in D.C. do the wrong things for the wrong reasons. How about the "clean energy" machine? Ethanol fuel? Oh, ya...........a real gem there. It requires more energy to produce, versus the benefit received. One may suppose a few new and temporary jobs have been created. Could or would you or I start such an operation based upon the merits of such an investment? I would not at this time.
In summary to your notes. Some group of folks need to pay more to operate the "monetary sink hole" in DC. Lets see: it is reported that about 50% of taxpayers pay no taxes, and the ultra rich don't pay as much as joe and jill sixpack. That only leaves what remains of a psuedo middle class. Given enough time, I can make most people appear to become rich upon the basis of inflation and tax code. If the current notation of $200K in earnings and above is rich; I can get you there eventually, if I never change the $200K level in the tax code. One may consider that a young couple who have studied their butts away to earn a masters degree and still paying off the student loans wonder why the government thinks they are rich with a gross income of $201K; solely based upon the fact that they are educated and have work that demands the wages they are making. Such a tax code kills incentive to become educated and work hard, eh? Our house is not rich, but I know our state and federal governments think we are today. 'Course they don't understand that we have to plan for the future and increased spending by our household. I am 64 years young. I have worked since I was 8 years old. I was pulled into a political war for 4 years of my young adult life. My spouse and I have been very prudent with our budget over the years; and those licking their chops over tax revenues of the boomer generation have a plan to grab a vast amount of wealth of this generation. This is money that will not be spent into the economy.
As you are here at MFO, I must presume you have interest in growing your invested monies. I will suggest that you should not work harder, or get more education or have monies in a 401k, 403b or IRA. Just spent the money now and enjoy. Don't even think about buying a home. In the end, your government will just take it all away from you. Why bother, eh?
Be totally aware of the flim-flam folks who speak with forked tongues and from both sides of their mouths in the "land of DC". Sadly, many "don't know, that they don't know". The blissfulness of ignorance.
Regards,
Catch

Howdy,
Again, a thank you to all who post the links and also start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... Today and with the past few weeks; the markets, I suspect our house may fall within the "lucky" area of investing for this 2012 year. I seldom do not have a feeling about some flow of intuition about where the monies should be, based upon our risk and reward sentiment. I find little guidance at this time. Perhaps it is just me, the phase of the moon or the doldrums one periodically encounters with any task of thinking. I recalled the lines of Clint Eastwood/Dirty Harry asking whether the punk felt lucky or not. Lucky and chance of draw to being in the right place at the right time is my best guess right now for the markets. I have placed a short list of recent items that have caught my attention. There are many other areas and items, too. I do not attempt to show the list as negative in aspect; only to a few items that are floating around and in global events. Not that there isn't always something going on in some part of the world which may affect investments.
Random thoughts, no particular order of priority:
1. Who is really doing the deal in Europe, and why?
a. ECB okay with breaking existing rules for bond holders, who may bend over and take the medicine.
b. Dear EU, take the medicine and let Greece go its own way. If you (EU) mess this up in a bad way;
many others will be in line for the same handouts. The trap is already set.
2. Some EU countries agreed to sanctions and not buy Iranian oil beginning July 1.
a. Opps, Iran announces; well, you may all bite our back side, we'll stop shipping to you, March 1.
*****update, Feb 19; Iran announces crude ship stoppage to France and England
b. Iranian sanctions are supposed to stem flow of U.S. dollars to Iran.
c. Not so fast, say some countries; we need the oil and we'll pay with gold (India reported story).
d. Iran reportedly needs grains (poor crop production) and is willing to do a swap/barter.
e. Russia smiles, a "crude" smile indeed !
f. The big, "uh-oh"; will global trades in commodities move away from a $US basis?
3. What to do about Syria? UN gives the voted hand slap; excluding China and Russia votes....uh-oh.
4. Social economists express, housing problem will be helped from the young ones and family formations.
a. Okay, but familes can not form without real and lasting employment; other than minimum wage.
b. "a", a catch22; if I have ever seen one.....
5. Cheap money, U.S., Japan and more coming in Europe, where central bank rates have to move down again.
6. Elections coming in many places; with some likely changes in "styling and profiling" by candidates.
a. one French contender states that he will undo the Euro-Pact agreements.
b. Germany......well, who knows, eh?
c. U.S.; take your best guess. Politicians, most of whom are not business oriented; but lobbied by those who are.
I have noted a few things below, in the Buy/Sell/Portfolio section.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh?
Hey, I probably forgot something; and hopefully the words make some sense.
Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
SELLs/BUYs THIS PAST WEEK:
NONE
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 2.6%
PRPFX ....YTD = + 6.5%
SIRRX .....YTD = + 1.3%
HSTRX ....YTD = + .65%
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
Portfolio Thoughts:
Our holdings had a + .16 % move this past week. For the better part of 2011 the investment grade bonds in our portfolios supported weakness in the equity and high yield bond holdings. The early part of this year shows a partial reversal forming; in particular since around January 17. No, investment grade bonds/funds have not become trash; but within the last month, a small sideways movement seems to be taking place. I have read this and that to find some knowledge about this; as usual one may find any number of conflicting viewpoints. Flows to many bond areas are still reported to be very large. New issues of bonds in many sectors are also very large. Perhaps a balance of money flows is meeting an issue flow. One still must consider how many big traders are watching Europe to find and know about a true agreement related to debt there. Very large holders (pension funds)of bonds will also maintain some long term positions in various bonds. Too many things in place right now to get a good feel for where equities and many bond types will be at the end of March. I note the month of March; as I feel this may begin to tell more of the story; as in theory, we may know about a resolution regarding Greece. I note this particular piece of writing to some bond sectors; but the equity sectors may be affected no less. Our house is not selling any bond funds at this time; as this area still may prove to be a smoothing factor again in 2012. I find little to convince this house that 2012 will be any less difficult to navigate than was 2011. A quick look at my words seems to find, at least for me; that I have not really written much of note. Me thinks I'm having an off-month for thinking. A summary may find: watching investment grade bonds for near term trends and sitting tight with all of our holdings until the end of March; barring a nasty event; and finding that this year, our house may just plainly be LUCKY. I better stop now; before the writing becomes more confusing. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
---Below is what M* x-ray has attempted to sort for our portfolio---
U.S.Stocks 11%
Foreign Stocks 11.14%
Bonds 70.83% ***
Other 7.03%
Not Classified 0.00%
***about 35% of the bonds are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

http://www.sec.gov/Archives/edgar/data/709364/000090630412000359/rse497-212.htm
Effective after the close of business (4:00 p.m. EST) on Wednesday, February 29, 2012, Royce Special Equity Fund will be open only to existing shareholders and existing relationships.
The Fund will remain open to the following:
Existing investors – in their own name or as a beneficial owner of shares held in someone else’s name – for example, a nominee, custodian or omnibus account holding shares for the benefit of an investor would not be eligible to open a new account for its own benefit or for the benefit of another investor, but the investor would be eligible to open a new account in the Fund;
Registered Investment Advisors with existing clients in the Fund. Registered Investment Advisors who currently have clients in the Fund may open new accounts as well as add to existing accounts in the Fund;
Certain pre-approved asset allocation based investment programs and, for a limited time, initial investments by certain institutional investors approved by the Fund’s investment adviser;
Certain pre-approved “Retirement Plans” offered through certain broker-dealers with accounts held on the books of the Fund through omnibus account arrangements (either at the plan level or at the level of the financial intermediary). “Retirement Plans” include 401(k) plans, 457 plans, employer sponsored 403(b) plans, defined benefit pension plans, profit sharing plans, nonqualified deferred compensation plans, other similar employer-sponsored retirement plans and rollover accounts from such plans to individual retirement vehicles such as Traditional and Roth IRAs.
Existing shareholders in other Royce Funds will not be permitted to open new accounts in Royce Special Equity Fund after February 29, 2012 nor will they be permitted to acquire shares of these Funds by exchange. Fund distributions will continue to be reinvested, unless a shareholder has elected otherwise.
Royce reserves the right to: (i) make additional exceptions that, in its judgment, do not adversely affect its ability to manage the Fund; (ii) reject any investment or refuse any exception, including those detailed above, that it believes will adversely affect its ability to manage the Fund; and (iii) close and re-open the Fund to new or existing shareholders at any time.
February 17, 2012