hi scooter. if you want to look at the inflation portfolio, look under the hood of some Target Date Income funds. BlackRock, JPMorgan and some others create income category for those approaching retirement, so the main goal is income of course, but also maintaining purchasing power (i.e. inflation protection). That's why these portfolios usually have 20-30% equities, 7-12% TIPs, around 3% in commodities and a share in REITs (physical RE or farmland would be preferable of course). For youngsters, those who mostly hold equities, there is little need for other inflation assets -- from the portfolio construction point of view. Since you already own farmland, broader allocation to diversified equities should suffice.

Reply to @andrei: A year ago I read that Bill Gross was extremely bearish on Treasuries. I completely agreed with his ideas and wanted to move my bond allocation from VBMFX to PTTRX. However for external reasons, it was not practical to do so and my bonds stayed at VBMFX.
Of course you probably already know that Bill Gross turned out to be completely wrong. PTTRX returned 4% while VBMFX returned 7.5%.
Gundlach made the opposite bet, that investors would actually flock to Treasuries because the rest of the world was that much worse. His funds ended up doing great.
Dan Fuss at Loomis Sayles... well I don't really know what he has been doing. At least I don't think I've lost money there, although in 2008 he really seemed to be trying to.
I also have money with Tad Rivelle and his team at Metropolitan West.
I think all of these managers are smart folks. The key is finding managers that you can trust that in the long run, they will be right more often than they will be wrong.
In practical terms, if you find several managers equally persuasive, you can simply split your portfolio among them.
On the inflation issue, I think the key question is whether you personally are concerned with sudden short-term inflation. If you are retired then it may make more sense to buy inflation protection now, because the risk may not be worth it. I am still working and quite far from retirement so I am not too worried about inflation right now -- I think a combination of employment income, stock funds, and commodities funds will tie me through.
I am not really sure about the various scenarios for a "bond bear market." If you think it could happen, then your reaction probably depends again on your overall allocation and also on whether you need to preserve principal or not.

Hi claimui,
You noted:
I noticed that you don't always get responses to your weekly posts, so I just wanted to mention that I always read and greatly appreciate these updates, even if I do not always comment on them.
>>>>>Every once in awhile someone will make a comment or ask a question. I presume "x" number of folks at least take a peek from curiousity. I am pleased to know there may some value with at least a few of the words or thoughts. I can't ask for more than that.
I also hold LSBDX (or rather, the retail version LSBRX). I am not sure this fund is doing what I want and the expenses are rather high (even for LSBDX). For tepid 2011 performance I could have just stuck with Pimco Total Return or Metropolitan West Total Return, which also seem to pursuing diversified bond strategies. In fact given how quickly investors were willing to dump Bill Gross, it is disappointing to me that my other bond managers also bet against treasuries with similar results. (Except for VBMFX - hah!)
>>>>>Many professional investment managers missed targets in 2011. Our house is not displeased with LSBDX; but were surprised with it and PTTRX , as to the returns in 2011. On more than one occasion, I would look at the pc screen and ask (when viewing the current return); what is going on here, into what are you invested? We'll stick with both of them for the time being; as it is not clear where else to move any monies that suit our current risk and reward.
One question: Given the retirement focus of the portfolio, is inflation a concern and if so, are you also holding gold, commodities, property, etc. or are you solely relying on your TIPS funds for protection? I notice you have a commodity fund and gold fund but those seem to be stock funds and only a small portion of your portfolio. I'm still far from retirement but I am interested to see what an overall conservative/retirement strategy looks like.
>>>>>Inflation and mandatory withdrawal amounts after age 70.5 that will be taxed as ordinary income; excluding the Roth IRA's. Both are and should be concerns, eh? I will say that the overall/total return of the portfolio is the attempt to stay ahead of inflation; not just relying upon what are noted to be traditional inflation fighters. A properly positioned equity portfolio may be able to stay at pace or ahead of inflation, too. Although TIPS funds imply an inflation tool; at least for current yield, there isn't much value. The value is in the pricing at this time from money flows into this area; not unlike many other bond sectors. This momentum will last until the sellers step in, to out number the buyers; and the pricing retreats. Something all of us attempt to monitor for all areas of funds.
One theoretical, and in my opinion; a true advantage to U.S. debt, be they TIPS or other and also higher quality corporate debt; is that this area is very large as to total value and very liquid. One is not likely to get trapped too fast with a move in the negative direction, if the "tea leaves" are being monitored.
Another thing I have been wondering (and my apologies if this has been asked and answered before): why so many different funds? For the diversified/total return bond funds, I can understand a little, perhaps these managers all use different strategies and you want to diversify among them. But presumably (I have not checked) the investment bond funds are not that dissimilar from each other, so why 5 of them? I'm thinking maybe they are left over from various retirement plans, but surely you have an opportunity to consolidate/reorganize them at some point?
>>>>>The different bond funds in similar sectors are because of several different retirement accts., which likely will be consolidated in another year. As to the premise of holding 3-5 funds in a sector that you favor; I do not find this to be a problem. One gets the benefit of a particular fund having problems being in the right place at the right time; and being supported by the other similar funds If that given sector is moving up or down, all similar funds may track in a similar fashion to allow one to make a better decision about pulling some monies for profits or starting to unload going in the other direction. As is the case with so many funds today, is trying to determinet "what is in a name"? Not unlike 3 of our bond funds LSBDX PTTRX and FTBFX . Two of them are named "total" and Loomis is likely as multi-sector as the other two. The winner in 2011 was FTBFX. So, from these 3 was received a blended return, with one better performer supported the other two. That could change this year again. The two TIPS funds we hold are not pure twins, except that they both are oriented towards TIPS. But the performance does vary based on some other holdings and/or the duration of the holdings and the skills of management. One may find a fairly large variance both on a daily and weekly basis for the following: STPZ TIP LTPZ .
Even with consolidation of all of the retirement portfolios to one vendor, I suspect we will maintain a 3-5 fund holding in a given sector be it equity or bond; and go for the blended return.
Also with the equity funds, I can understand that they are all different sectors/strategies, but this is a very small part of your portfolio and it looks like you basically have about 1% in each fund. Completely hypothetically, if the total portfolio was around $5 million (which would be nice!), then 1% would be $50k. In that scenario, a 20% rally in a particular sector would get you a $10k upside -- it's not pocket change, but seems rather insignificant considering the bonds should be yielding maybe $100k-200k a year in interest alone.
>>>>>Yes, currently the equity portion of the portfolio is not a large percentage. Smilingly, I will say that Our House has been awaiting, for more than two years upon the House of Europe, for clarification of an political/economic direction.
---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)
I do believe I will adjust and note this M* data again in the weekly report; as it provides a better overview of the holdings.
Alternatively, why not give the whole 8% equity allocation to one or two crazy market gamblers. Then a 20%+ swing would seem a little more interesting.
>>>>>As most of the equity holdings are correlated; they do tend to move up or down together; not unlike the HY bond funds. The majority of the equity funds are U.S. oriented (M* thinks otherwise) at this time; among LC growth down through small caps. The Fido Leisure fund offers exposure to consumers...McD's, Yum Brands, Darden, casinos, etc. These areas are still expanding globally and old habits (fast food and restaurants) are hard to break. FSAGX and FFGCX lend towards the metals, energy and agriculture equities. As you note, we do not have any investments at this time that are directed towards the likes of GLD or SLV . We will rely upon the equity positions at this time, for precious metals exposure. Some of the other equity funds are mixed with their bond positions, and also offer a decent yield. Even the FAGIX fund, which is listed as a HY bond fund, maintains about 20% towards the equity sectors. Our smallest equity position is the Asian area with MACSX.
I'm curious about this because I have been trying to actively trying to reduce the number of funds I hold. Granted I'm far from retirement so my portfolio is quite small, but I don't plan to invest less than say 5% in any single fund on the theory that any risk/reward will not be worthwhile.
>>>>>Too many funds to monitor may present a problem; although less so today, with our handy-dandy computers. This is an individual choice. Less than 5% per fund is a reseasonable consideration. Part of this decision is involved with types of retirement accounts. One 401k plan I am familiar with has used both Vanguard and Fidelity as the vendors. Both very good vendor choices, but the company did not open up the plan to very many investments; and of course, dollar cost averaging into the fund choices all begin with much less than 5%.
As a side note to employer retirement plans; I did battle with the employer for 10 years to greatly expand the investment choices, The HR folks knew my name well. The agrument being that our job description (15,000 employees) indicates that we are responsible for managing and making smart business decisions each and every day; and yet you (HR) will not allow the employee to also be use their skills with a wide open investment plan. This is even more critical today with the demise of a defined benefit retirement plan; leaving the plan upon the back of the employee with a defined contribution 401k plan. The plan has since opened to more choices; but is still a very poor offering.
Is there a rationale for this? Or maybe it is just for fun?
>>>>>Hopefully, I have offered some rationale to our mish-mash of holdings.
Lastly, our house is at the sunset of our traditional work careers. This places even more emphasis upon our investing skills, to maintain what we have built to date. You and many others here at MFO find yourselves at a most wonderful place; being this site, to help build your investments going forward, too. While there are 1,000's of sites from which to gather other data and comments, be most assured that we are all at one of the best sites for fund discussions. In particular, the civil nature of exchanges related to all of our investments and thoughts.
I may have missed something.......don't hesitate to let me know.
Thank you for your excellent questions and thoughts.
Regards,
Catch

Reply to @scott:
Hi Scott,
You may already know this, but the institutional class of the A-Q-R fund (expense ratio 0.95%, no 12b- fee) is available for purchase in retirement accounts at Fidelity with no minimum but an initial $75 transaction fee. This is the only brokerage that I could find that offers this class for less than the prospectus $5M minimum. In this space, we own this class/fund and the Invesco offering.
Kevin

I noticed that you don't always get responses to your weekly posts, so I just wanted to mention that I always read and greatly appreciate these updates, even if I do not always comment on them.
I also hold LSBDX (or rather, the retail version LSBRX). I am not sure this fund is doing what I want and the expenses are rather high (even for LSBDX). For tepid 2011 performance I could have just stuck with Pimco Total Return or Metropolitan West Total Return, which also seem to pursuing diversified bond strategies. In fact given how quickly investors were willing to dump Bill Gross, it is disappointing to me that my other bond managers also bet against treasuries with similar results. (Except for VBMFX - hah!)
One question: Given the retirement focus of the portfolio, is inflation a concern and if so, are you also holding gold, commodities, property, etc. or are you solely relying on your TIPS funds for protection? I notice you have a commodity fund and gold fund but those seem to be stock funds and only a small portion of your portfolio. I'm still far from retirement but I am interested to see what an overall conservative/retirement strategy looks like.
Another thing I have been wondering (and my apologies if this has been asked and answered before): why so many different funds? For the diversified/total return bond funds, I can understand a little, perhaps these managers all use different strategies and you want to diversify among them. But presumably (I have not checked) the investment bond funds are not that dissimilar from each other, so why 5 of them? I'm thinking maybe they are left over from various retirement plans, but surely you have an opportunity to consolidate/reorganize them at some point?
Also with the equity funds, I can understand that they are all different sectors/strategies, but this is a very small part of your portfolio and it looks like you basically have about 1% in each fund. Completely hypothetically, if the total portfolio was around $5 million (which would be nice!), then 1% would be $50k. In that scenario, a 20% rally in a particular sector would get you a $10k upside -- it's not pocket change, but seems rather insignificant considering the bonds should be yielding maybe $100k-200k a year in interest alone.
Alternatively, why not give the whole 8% equity allocation to one or two crazy market gamblers. Then a 20%+ swing would seem a little more interesting.
I'm curious about this because I have been trying to actively trying to reduce the number of funds I hold. Granted I'm far from retirement so my portfolio is quite small, but I don't plan to invest less than say 5% in any single fund on the theory that any risk/reward will not be worthwhile.
Is there a rationale for this? Or maybe it is just for fun?

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.....Well, Mr. Patient has more of a smile, so far; this month, this year. Mr. Patient is one of those little characters whom we've seen portrayed as the pro or con perspective resting upon either shoulder, voicing opinions and thoughts. Mr. Twitchy could be named for the other shoulder character. Mr. T is relaxed most of the time, or at least keeps his thoughts to himself. Mr. P and Mr. T generally do offer a balance, related to most things; and in particular, investing and investments. Mr. P is the one with patience, Mr. T. is less patient; but is also the most curious and is the explorer, and therefore discovers more and new items of interest. Mr. P is indeed the named and actual pilot of the investment boat, using the charts and information placed before him. He is generally content with the tried and true safe passage ways upon the investment waters. But, it is Mr. T who offers up thoughts and suggestions about new passage ways and ports of call. As patient as Mr. P may be, he realizes that the ports and safe harbors he is most familiar with and has enjoyed in the past, can change. Mr. T is the one who keeps track of the reports from the other investment pilots as to their perspective of changes in the familiar ports of call; and who also offer up alternative ports of call; to which, the Funds Boat has yet to visit. Mr. T will investigate these reports and offer a navigational passage, to a new port of call. The boat may not stop or stay at a new port; but will at least take a closer look and make some notes for future reference.
Mr. P is a decent boat pilot; and Mr. T is a decent navigator. Both realize that their travels upon the waters of investments are best served and safer when both of their skill sets are combined; as neither could perform both positions as well, on their own. They continue to attempt to find the best passages and ports of call, going forward.
You may find a slight pressure of weight upon each shoulder top from time to time. The pro's and con's friends you have; debating this or that. One may name the "con", as is sometimes referred; the devil's advocate. Although this naming has its own reference to many; it should not be taken as a negative aspect; but as the balancing argument as to setting an investment plan.....the "why should I" or "the convince me".
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 = + 1.6%
PRPFX ....YTD = + 5.8%
SIRRX .....YTD = + .8%
HSTRX ....YTD = + 1.1%
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 + 1.45 % move this past week. Related to the Mr. P and Mr. T above. Patience has won out so far this year, as is related in particular to LSBDX. This fund's performance in 2011 was a bit on the rocky side; and Mr. Twitchy offered choices for change and to split this fund 4 ways in 2012, forget 2011 and move on into other investments with the proceeds of the sale. LSBDX has performed very well in 2012, to date. The investment positions taken by the managers in 2011 were apparently not incorrect; but as with many other investment areas, continued to be hammered to the downside with the continued unknowns from Europe in particular. Mr. Patient will continue to watch the situations surrounding us; and is assured that Mr. Twitchy will be in place, too; looking at as much as possible, using his curiousity, to perhaps discover something that has been overlooked. 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

Hi msf,
Yes. I revisited the "vit" naming to discover the annuity. Thank you for your efforts with this.
It remains a sad dispostion for this and other MM's; where we must presume a very large sum of monies are parked.
Of another note, at least for some in retirement accts; are those with access to "stable value" parking places. My recall as to these are a synthetic/psuedo bond fund, at least to the build by the vendor or investment house presenting the "sv" for use inside of some retirement accts (401k and related).
Take care,
Catch

I would suggest that the "rule of thumb" that uses your age as a determinate of how much to put in stocks and bonds is, on the surface, shortsighted. As rono said, there are a lot of factors that will influence investment decisions. The most important factor might be when you need to take money from your investment portfolio, and how much you will take. After that, your general investment profile of risk tolerance and investment goals come into play. We have clients who will NEVER need to touch their investments, except for the required distributions from retirement accounts. Some of them look at a portion of their investment portfolio as "belonging to our kids", so they would take a more aggressive approach to those dollars.
If you have not already done a lifetime cash flow projection of how long your portfolio will last, based on when you start to take money, how much you will need, and what your other sources of retirement income will be (SS, pension, etc.), you absolutely should do that. It will force you to look at how much you expect to spend in terms of what the withdrawal rate is on your investments, and that ultimately determines how long your money will last. For example, if you project a 5% growth rate on your portfolio, and your initial withdrawal is at 4% gross, with a 3% inflation factor, it may affect how your dollars are invested from a risk standpoint. Then change the input...4% growth, 5% withdrawal...and notice what happens.
Maybe you don't need to have ANY dollars in stocks. But I would suggest that your age alone is not the most important factor. If we are indeed near the end of a 30-year bull market for bonds, that has both positive and negative ramifications. Eventually higher interest rates and higher inflation rates impact your cash flow projections. What if the stock markets return a net of 0% over the next 10 years? There are just so many variables.
You own some very good mangers, but without looking at the time horizon of when you need cash, and how much, and for how long, and whether there are other sources of income, it's just a small part of the puzzle.
I don't think I answered your question at all, but I hope I gave you some things to consider.

Howdy,
There are many others that can better comment on your specific funds but I'm sure you've done your homework, so let's talk about some basics.
The age old rule of thumb was to subtract your age from 100 and that should be your percentage of equities. In your case, that would be 53% leaving 47% to be divided between bonds and cash - mostly bonds. Let's call it 50/40/10 or something similar. This asset allocation will change, or course, as you age, but also as your risk tolerance changes and also your time horizon (related to your age but separate).
Now, this allocation can be for the accounts in total or you can treat them as separate allocations. Being the same type of account (tax treatment), you'd normally lump them together for your allocation UNLESS you can access some specific funds in one an not the other.
As for equites, you seem very shy on international and this area is normally allocated any where from 15-40%. Keep in mind that global and international funds are different as global includes US multinats and thereby can give you less foreign exposure than intended.
You fail to mention other retirement vehicles - Roth, etc. Explore them as they will give you options in retirement. Think of your retirement as a footstool. You want to maximize the number of legs AND you want each leg to be strong. Count your legs and think of ones you might add - Roth, savings, home equity, income property, second income stream, SocSec, pension, biz equity, sons and daughters that are doctors, etc.
Lasty, from the Old Baron R. about preserving your wealth. Keep 1/3 of your wealth in securities, 1/3 in real estate and 1/3 in rare art. [define rare are as you will, but it's not beanie babies].
I'd venture to guess that most folks on this forum or any other are mostly securities with a little real estate. When I first ran my numbers I was 90/8/2 and blew chunks on my monitor. I'm about 60/25/15 now and still working on it.
Anywho, just some thoughts,
peace,
rono

(it's been in a 30 year bull cycle but interest rates can't go down from here and since prices move inversely to yield . . .)
I suspect all fixed-income investments have become a risky asset.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Worried minds think alike. Adhering to the quaint old guideline of stocks/bonds mix according to age would be 40/60 but feel more comfortable with 35/65 or even 30/70.
But dislike bond exposure at this juncture point for the reasons above. A rather sticky wicket allocating a majority of assets to a credit market that offers a negative real return
on most anything that addresses the interest rate risk (shorter term higher credit qualities.) I/we restructured the entire fixed income side over a year ago, in hindsight over a year early. Fidelity holdings are floating rate, short term muni, New Markets.
Also RPHYX, RNSIX which I was introduced to here and much thanks for that. The remainder of long-only bond funds were rolled over into a couple multi-asset strategies launched by Loomis Sayles and Doubleline employing complex long-short derivative strategies across currency, commodity, stock and bond markets. Apparently too complex. The Loomis Sayles fund
managed (...) to get wrong-footed whipsawed daily with a steadily dwindling NAV in both up and down markets plus no yield (MARYX, don't go there.) Bye-bye, rolled into RNSIX which continues on quite a roll in up, down or sideways markets, don't ask me how, now 20% of assets, its three separately managed subportfolios are a comfort factor for an outsized position. I'm aware of the overconfidence/hubris factor that afflicts fund managers who consistently find everything breaking their way until not, see Bill Miller,
Ken Heebner and the alphabeta bet, confusing one for the other, alpha and beta. The Doubleline Multi-Asset (DMLIX) continues to break even after a year, no more nor less with scant yield, basically a hedge fund for the 99% mom/pop retail investor with the same dismal performance as the pricier high net worth 1% varieties, commiseration knows no class.
The accumulation phase ended with retirement nearly a decade ago, capital preservation is the goal. Long term wind-at-back bond fund complacency will end with surpise and shock in the sort of interest rate rise exceeding all forecast guesstimations by hundreds of basis points the likes of which bankrupted Orange County in the mid-'Nineties. Amnesia is not a strategy. Seared both sides like a Texas-style steak by the '08 market crash the pain avoidance shift has been to the next burner to heat up. I'm not a shorter but it has its appeal regarding fixed income at present despite being dead wrong for over a year.
In a much higher interest rate environment laddering Bulletshares etfs hold vast appeal
for a buy-and-forget capital preservation minded individual with far better things to do (think beachwalk) than pay attention to financial markets having become a wall to wall mess, bumper to bumper, stem to stern, in my version because complexity favors the sinister.

I think anyone buying a fund that's essentially a bet of financial is plain nuts. If you bought it in 2008 is one thing. Wait for another 2008. I am. And yes, it is some Fairholme fund that I'll buy. The high minimums make that even more necessary. I mean 10K in FAIRX is bad enough. 25K for FAAFX. You better be 200% sure you will but and only sell in retirement.
I'm buying AUXFX instead. APPLX too.

For what interest it holds, I've added Fidelity's Global High Income fund to my retirement portfolio. John Carlson, who manages their e.m. bond fund, is the lead manager here. Given my skepticism about the bond market (it's been in a 30 year bull cycle but interest rates can't go down from here and since prices move inversely to yield . . .), it seemed like a prudent move. There are certainly folks who'd oppose it on principle - the mantra is "don't put risky assets in your fixed-income portfolio" - at this point, I suspect all fixed-income investments have become a risky asset.
David

In an old tradition, I'll write a bit about my 2011 portfolio next month. I currently own a number of funds that I've written about (in my non-retirement portfolio, Leuthold Global, RiverPark Short-Term High Yield, Matthews Asian Growth & Income), but only MACSX was identified as a "star." I'm satisfied all around.
As ever, David

Reply to @Ted: "ETF's with greater flexability and lower cost will replace mutual funds in total assets within the next five years."
Are ETFs available for 401(K) and 403(b) accounts? We have asked our company retirement administrators and the answer is NO for the foreseeable future. We already have a number of Institutional Plus shares of Vanguard index funds with ER at 0.02%.

I built the 2 portfolios in M* when Fundmentals 1st came up with them. With out changes or adjustments, this is the result. I added the T.Rowe Price Target date funds (the Retirement fund and the 2010 fund) that have the closest mix of equity/bonds under each of Fundmentals conservative and agressive portfolos:
year 08 09 10 11
cons 5 25 11 2
TRP -18 22 10 1
agrs -19 38 14 -2
TRP -27 28 13 1
I can't remember, but I think he built these in early 2010, so he had the benifit of hind-site taking the best funds from 08 and 09 - Hence the strong results in those years. Still, pretty good comparible results in 2010 and 2011 versus the Target Date funds.

www.fairmark.com is the best site I know of for answers to questions of this sort. Answers provided by CPAs, enrolled agents, tax attorneys. A large chunk of the site is devoted to tax treatment of investment incomes inside (and outside) retirement vehicles.

Not to put too fine a point on it, but all returns in a retirement account - except for a Roth - are taxed as ordinary income. That rate's often higher than the current capital gains rate, in which case your tax would be higher in an IRA than out. It's particularly pressing if you put a tax-free bond fund in a retirement account, and accrue tax liabilities as a result.
David

Howdy,
To add and continue. Your 401, 403, 457 and traditional IRAs are your primary tax deferred retirement accounts. They enable you to defer your salary (compensation) before taxes and grow your money with tax deferred appreciation. You are able to start withdrawing at 59.5 and must start withdrawals by 70.5 (in some situations, you can start making withdrawals earlier - wifey started at 50). When you make withdrawals, the amount withdrawn is taxed at your then current marginal tax rate.
The Roth IRA is available to most wage earners and enables you to start $5K odd per year AFTER taxes into a fully tax exempt acct. This is a very wise thing to do as it gives you a pot of tax free money at some future date.
Normally, when offered thru your workplace, you should defer sufficient monies to fully captu
re any employer match - then fund your Roth IRA for the year - and then start funding your deferred acct again until you either run out of calendar or max it out for the year. I think the annual deferred limit is around $15K.
You want to have various pots of retirement monies each with differing tax and withdrawal rules and limits. Maximize your fiscal flexibility.
peace,
rono

Investors Climb Back Into Stock Funds; U.S. ETFs Dominate Flows
http://blogs.barrons.com/focusonfunds/2012/01/13/investors-climb-back-into-stock-funds-flows-dominated-by-domestic-etfs/?mod=BOLBlog
mf returns have not improve
http://www.forbes.com/sites/investor/2012/01/13/mutual-fund-returns-havent-really-improved/
does it pay to be couch potato
http://business.financialpost.com/2012/01/14/in-defence-of-couch-potatoes/
where can i find cd yielding 5%
http://www.usatoday.com/money/perfi/retirement/story/2012-01-13/cds-yielding-five-percent/52538816/1

Reply to @MaxBialystock: Max, it is indeed a great distinction to be "moderate" risk among the emerging bond funds (the riskiest bond asset class) or just "moderate" risk - period. Once you get other moneys, please don't pile up in high yield, another risky bond type. You will need to de-risk your portfolio. From reading your comments here and on FA over the years, I highly suggest that before you invest additional moneys, you should consult a fee-based financial adviser. I have much respect and appreciation for this Board, but having mostly EM equities and bonds so close to retirement is not the right thing to do. I will retreat now and will never repeat this again. Best wishes.