Considering hiring a financial planner affiliated with UBS.... his model portfolio for my retirement (which I am) includes about six funds with front-end loads, including Templeton World. I mentioned I generally have a strong distaste for paying loads and he said there would be no loads or front-end fees charge for these funds. He mentioned something about an arrangement with UBS but I was unclear about that. Am I missing something? Thanks.

I've been converting bond holdings to cash and making sure existing bond holdings are short in duration (3 years and under). Over the past week I've taken signficant % of aggressive international and emerging markets off the table with nice profits. I'm sticking with risk-conscious global managers (First Eagle Global, IVA) and high-quality, large-cap, and dividend paying domestic funds. This is for a pre-retirement (5-10 year horizon) portfolio that is currently about 60% equity, 20% short/inter bond and 20% cash, with a small position in Ag Commodities (DBA) (if you count First Eagle and IVA as equity). If you take into account their cash and fixed, the overall portfolio is closer to 50% equity. I believe we are living in particularly high-risk times and that is particularly true for high-risk and long bonds and emerging markets, particularly China.

Being of a younger age than most people on the board, I don't recommend what I'm doing, especially for those in retirement.
I certainly do take some risks (although I wouldn't consider what I do very aggressive as a whole), but am interested in a wide-ranging group of asset classes and strategies. My approach is definitely not traditional, but for me I think an element of it is a learning experience, from taking the step to invest in some individual EM stocks (starting from square one learning about companies I've never heard of vs letting managers do that selection - some might work, some might not, but I think the research process has been highly enjoyable) to buying funds on the London market and other aspects.
There is a very large element of research in terms of the choices made, but I think it's also learning about new methods/asset classes and learning even more about other cultures an added bonus of global investing. The few single stocks that I plan to own for 5-10 years represent holdings that I am comfortable with in order to play what I believe are longer-term themes. Otherwise, I'm very flexible.

I find these discussions interesting, but a bit hard to interpret.
I think when people describe their relative positions, compared to their own prior (and perhaps expected future) stances, it is most informative.
I say this because when trying to compare allocations across different portfolios for different people, I get confuzzled about possible apples/oranges comparisons.
For instance: when people are talking about allocations to different asset classes within a portfolio, I don't know how to interpret "portfolio". Does "my portfolio" reflect all potential resources, including say "emergency fund" cash and somewhat illiquid investments like real estate and fine art (per the Rothschilds), somewhat liquid collectibles like gold coins (per Rono)? Or does "my portfolio" refer to something more narrow, like "money in tax-advantaged retirement accounts" or "money I have for my own reasons decided is investable in securities of various types"?
For those already retired, it can be hard to infer context: is this money you eventually expect to live off of, or are you already able to live off of income from social security and a defined benefit pension? Do you have other protections in place like long-term care insurance?
To take one example, it is pretty clear from his postings that Scott has quite a sophisticated portfolio, with many elements (including plans to hold onto some single stocks for 5-10 years). So while I find all his comments extremely interesting, I am quite cautious about attempting to imitate what he is doing, since I am a pretty dull stick with a limited range of approaches I am willing to try in the handful of portfolios I handle for people in the family.
gfb

As the WSJ article below pointed out, "...Buy ETNs only in tax-deferred retirement accounts." considering tax disadvantages in taxable account.

merrill lynch wkly commentary
http://rcr.ml.com/Archive/11042554.pdf?q=0VgdV!!VHXj-8SGHLG20YA__&__gda__=1304772452_07d7d956c320c4cd20ac61848704d6b5
don't turn out the lights on commodities yet
http://www.usfunds.com/investor-resources/investor-alert/
Foreign Bond Funds Led Fixed Income In April
http://www.investors.com/NewsAndAnalysis/Article/570924/201105031756/Risk-Appetite-Spiced-Up-Taxables-In-April-As-US-Treasuries-Lagged.htm
are mlps worth the energy
http://online.wsj.com/article/SB10001424052748704810504576305774005723978.html
buy beaten down financials
http://www.thestreet.com/story/11106073/1/buy-beaten-down-banks-kovalski-says.html?cm_ven=GOOGLEN
buffett is the smartest idiot i know
http://www.marketwatch.com/story/warren-buffett-is-the-smartest-idiot-i-know-2011-05-02?dist=countdown
How half a percent can ruin your retirement
http://money.msn.com/retirement-investment/article.aspx?post=af16358a-0621-4d41-b0ef-0facdbc2fe03
Fund Favorites & Red Flags: Mutual Series and Vanguard
http://news.morningstar.com/articlenet/article.aspx?id=379561
trow price health fund gets a healthy report
http://www.financial-planning.com/news/-2673091-1.html
Popularity Of Target-Date Mutual Funds Soars
http://www.cnbc.com/id/42767457
Stock Funds’ April Gains Defy War, Disasters
http://www.investors.com/NewsAndAnalysis/Article/570921/201105031801/Small-Caps-Lead-Mutual-Funds-To-Best-Month-Of-11.htm
Pimco Total Return ETF: Same Thing, Only Different
http://moneywatch.bnet.com/investing/blog/against-grain/pimco-total-return-etf-same-thing-only-different/1038/
ot
http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/bill-gates-and-warren-buffett-praise-uranium/article2011037/
ot - Follow market rules of thumb, not crystal balls
http://www.chicagotribune.com/business/yourmoney/sc-cons-0505-marksjarvis-20110506,0,5850008.column
Small Caps that Pay Dividends have many Advantage over other Equities, both Large and Small
http://www.smallcapnetwork.com/Small-Caps-that-Pay-Dividends-have-many-Advantage-over-other-Equities-both-Large-and-Small/s/article/view/p/mid/3/id/985/
http://www.smallcapnetwork.com/Small-Caps-that-Pay-Dividends-have-many-Advantage-over-other-Equities-both-Large-and-Small/s/article/view/p/mid/3/id/985/?to_print=1
http://www.gurufocus.com/news/130886/investment-advice-from-jim-rogers-warren-buffett-and-doug-casey

Scott: addressing your initial remarks at the top of this thread: a nice problem to have... I try to follow the KISS principle. The "fanciest" stuff I hold is a Latin Amer. fund (PRLAX) and a EM bond fund. (PREMX.) With me, there's no shorting or derivatives or "push-pull" holdings. With retirement at least now on the horizon, I suppose that if one of my funds grew too big in proportion to my other stuff, I'd find a different fund in line with my objectives, even if it duplicated another. I need to grow my bond stake, so a global or int'l or even a domestic bond fund which throws off monthly dividends would be where I'm at.

Matt, if I knew a good answer to that one, I'd be the head honcho at Goldman and pull down 8 gazillion per year. I think that the key to sleeping well is to project, as accurately as possible, your anticipated annual expenses. I did this many years ago with a spreadsheet, where I could vary the inflation rate and see what might happen 25 years out, but you could do the same sort of thing with a calculator.
Do this also with SS and your pension income, if that has a COLA. Assume that both SS and your pension will always lag the real rate of inflation by maybe 2% as a safety factor.
Now you will have a rough projection of your income and expenses, and you will be able to determine what your needs will be from your investments. Once you have a good handle on that, you can determine, again roughly, what sort of division you can get away with between bonds, equities, (or bond & equity funds) and cash. You may find that you will be able to assume less risk, and thus upgrade your bond exposure and maybe stash away a percentage as no-income cash. For instance, we are now roughly 1/3 each in bond funds/equity funds/cash. Before retirement, less cash, less bonds, more equity.
The thing is, as Murphy knew full well some 70 years before "Black Swans" were discovered, "if anything can go wrong, it will go wrong, and at the worst possible moment". My spreadsheet incorporated various disaster scenarios, and I could see the potential results of a future market crash by varying both the future year and the amount of the decline. And guess what? 2007 was the year it happened, right after we retired: the worst possible moment. But because of our diversified investment reserve, we have survived and recovered.
The best of luck to you sir!
OJ

Let me preface by stating, I am retired, collecting a pension and SS and all monies are in either in a regular or Roth Ira.
Prior to retirement I redid my portfolio. Went from 100% equity to 35 % equity (as a hedge for inflation) and 65% income (split among 3 bond funds)
Since I do not need the added income, all bond and equity fund distributions are reinvested.
When the time comes that I need added income, I will take the monthly distribution from only the bond funds. I have no intentions of ever redeeming principal.
Therefore, if I am not redeeming shares I should not be concerned with NAV fluctuation and go for the largest dividends.
Any thoughts about my strategy?
Matt

Yep. These anticipated pull-backs are an opportunity to re-align the portfolio, which we do occasionally (now in retirement) to increase income stream, dump losers, trim over-achievers, etc.
We're about 20% cash with a wish-list comprising more divy stocks, MLP's, preferreds, utes, global bonds (maybe) and whatever else will shovel more cash our way.
Turning the boat 120 degrees or so from the 'accumulation' phase of life has come grudgingly. Generally speaking, it has meant accepting age. Crimeny!!
best, hawk

with TDF glide paths, one need to be careful if their offering is designed as the "to" retirement, or "through" retirement. different houses make different promises.

I would only consider purchasing the institutional class of this fund, PAUIX (0.98% ER), due to the excessively high expense ratio of PAUDX (1.38%) for a $10.4B AUM fund. This fund is best used as a hedge-fund equivalent position in one's portfolio, in my opinion. Shortly after the merger of Wellstrade with Wells Fargo, I purchased online an initial position in PAUIX for a $100 minimum in my WT retirement account. This fund is also available for $25K minimum in Vanguard accounts, and there is no minimum for this fund at TDA.
Kevin

Hi Guys,
Are fund management fee incentives tightly aligned with optimum investment results for their clients?
No, not often enough. Since risk and reward are always positively correlated for most investment organizations, fund management fees are formulated and charged in a manner that encourages managers to seek risk levels that exceed those of their more conservative customers. Given their fee structures, this observation is valid for both mutual fund managers and for hedge fund managers, but especially so for hedge fund managers.
My assertion is not rooted in the obvious organizational goal to increase the size of the fund’s footprint and profits. Although that goal is paramount to the success of all funds, this posting focuses attention on the specific levels of the fee structure itself. That structure promotes extra risk taking to enhance the management’s rewards, mostly at the expense of degrading the client’s comfort level. It is especially egregious when considering Hedge Fund operations.
Let’s examine two representative fund fee schedules: first the nominal 1.5 % management fee charge for an average actively managed equity mutual fund, and secondly, the so-called 2-20 fees for a typical hedge fund. The 2-20 schedule refers to a 2 % overall management charge plus a 20 % tax on annual profits. Of course the hedge fund assumes no liability for failure, but also yields to zero bonus payoff if its performance is downhill for usually an annual measurement period.
For the purposes of this example I postulated a $100,000 investment, perhaps a slice from a much larger portfolio. This tactic acknowledges the old adage to diversify and not put all eggs into a single basket no matter how attractive or secure that basket might appear.
To make the rewards/penalties more concrete and the analysis more tractable, I’ll assume that the fund management is considering a single, very aggressive investment opportunity that has a 50 % probability of a 50 % gain, but also has a 50 % likelihood of a substantial 50 % loss for the next year. These aggressive projections are made to emphasize potential portfolio impacts. Given today’s hostile environment, a 0 % return on idle cash is postulated; that’s not a bad assumption.
Most private investors would pass on this risky proposition. Many would require projected expected returns to be at least double possible losses given our historic risk aversion. This representative risk aversion profile has been verified by numerous academic Behavioral studies.
But what about assessing the investment prospects from the fund manager’s purview? His reward incentives for gambling on a 50/50 target proposition might prompt him to make a decision that his client would summarily dismiss if left to his own assessments.
I’ll do the numbers for a private investor, for an active mutual fund company, and for a hedge fund operation to identify profit incentives. For illustrative purposes, I will only propose two option scenarios: either a decision not to invest at all, or commit a $100,000 investment to the stipulated risky venture (really an adventure).
I propose to make the decision to invest or not to invest on a Total Expected Return (TER) basis. For all possible outcomes Total Expected Return is equal to the product of Anticipated Return (AR) times the Probability of that Event (PE) occurring summed over all outcomes. In equation format: TER = summation of all (AR X PE) possibilities. The TER is the criterion that will be used as a measure to control the final investment decision.
Maximizing TER does not guarantee a favorable outcome, but it does optimize prospective profits in an uncertain world. It is a rational econometric approach given an imperfect and incomplete information environment. Note that in almost every trade, uncertainty and information asymmetry exists that gives one participant of the trade an edge over the other side.
There is a disjuncture here between customer and fund providers on the evaluations of their respective TERs. For the private investor or fund client, the TER is based on anticipated holdings performance; for the fund providers, the TER is based on various accrued fees since these firms have limited or no skin directly in the game. TER is very much perspective dependent.
Observe that the TERs for the investor or client are calculated separately from the TER for the fund operators. And that difference produces a disparate incentive between the engaged parties when making an investment decision. This is a distinction with a difference; it not only matters, it matters greatly.
I have completed these calculations to demonstrate the disconnect between the TER for a private investor and the TER for a fund agent. The analysis illustrates the asymmetric nature of the reward incentives. I elected not to incorporate these sample calculations in this submittal because they are somewhat mind-numbing.
The conclusion from these analyses is that a substantial disparity exists between fund management incentives (their TERs) and an individual investor incentives (our TERs). That disjuncture encourages fund management to accept risks that a private investor would discard out-of-hand. Economists will always tell you that incentives are a primary motivation for any action; incentives definitely matter.
The bottom-line is that fund fee schedules, especially those of the Hedge fund industry, are not properly aligned with those of their clientele. In many instances, fund managers are persuaded to seek risks that their customers would immediately reject. Improperly constructed incentives often do damage.
This is yet another argument to be as independent an investor as your resources, your agenda, your time, and your skill set permits.
I guess hindsight is always easier than foresight. In retrospect it is apparent that when risks are not mutually shared, the actors in any endeavor will align themselves across a wide spectrum of actions; those confronted with a heavy risk burden will be more conservative while those not so challenged will favor more risky approaches. If individuals perceive themselves as underwater, more risk is an acceptable avenue to full recovery.
Never is the risk exposure asymmetry more evident then in the Hedge Fund/client investment relationship. The Hedge Fund operations assume almost zero risk, yet have the potential for enormous profits. That’s an unhealthy arrangement.
Allow me to close with a quote from Nikita Khrushchev: “Call it what you will, incentives are what get people to work harder.” Even the Communists understood incentive priorities. As wise investors, we should recognize and honor incentive differences when making all our financial decisions
Understanding the importance of incentives and costs for all financial matters are mandatory considerations when constructing and nurturing a retirement portfolio.
Keep it balanced folks. And stay away from Hedge Funds.
Best Regards,
MJG

Finding this here a bit hard to follow. Appears to say 2010 target funds are 5% above where the S&P was in Oct. '07, which would be comparing apples and oranges. But, the gist is that 2010 target retirement funds have now recovered the losses suffered in the bear market from late '07 until early '09. That's a bit surprising as would wager that most who post here recovered much earlier. These funds promise a set-it and forget-it style of investing and have become the default vehicle in many company plans. Not a bad option as some young people could care less about investing and may be more concerned about their career, buying a home, raising kids, caring for the parents or grandparents. For them these funds may still be preferable to sticking the money in cash or worse yet not investing at all. Over a 30 or 40 year time horizon they should do fine. Even with a 2010 retirement date, they'll likely continue to invest for another 20 or so years However, if they had the time and inclination when young to read this board and pursue just about any of the many approaches discussed, got a feeling they would do much better than what target date funds can provide.

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; if and when it returns. 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 fund. Gains or losses are computed from actual account values.
While looking around.....TIC-TOC, neither may this house beat the clock. We all have just those 24 hours, eh? Spring is trying to arrive in MI and that means fix up and/or clean up inside and outside from the perils of winter. We may have 2-3 months of decent weather time, when substracting the ill weather days between now and September. I am already behind on me chores; and have more than enough family and friend functions on the schedule for this summer; of which, we are pleased to have. SO, the Funds Boat report will scale back to a quarterly report; at least at this point of time allowance. We'll just have to see how things, and time move along, at this house. The next scheduled report will be at the end of June, 2011.
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 THIS PAST WEEK:
NONE
BUYs THIS PAST WEEK:
NONE
Portfolio Thoughts:
Our holdings had a +.69% move this past week. And yes, we are satisfied with our risk adjusted returns YTD. If the portfolio can pull a +10 to12% for the year; you will not hear any whining from this house. GEE WHIZ....no buys or sells. In the way back days of "don't fight the FED"; I personally felt more comfortable with this statement. TODAY, the statement has the added ? of don't fight the "high freq trading machines". So, while the FED is still stimulating the money machine, this house really should be buying everything in sight that "should" continue to move up in value in equities or where ever the hot may travel. It all makes sense, eh??? Low real interest rates; I mean, what else would a fella ask for. 'Course there is the unemployment rate and a housing market that will likely be stuck in place for a few more years, at the very least. Some states are raising taxes and fees to overcome and to correct a mandatory budget balance. Assured our state folks via email, that every dollar they choose to take from this house will be one that will not be spent in the local economy...pretty much a "who cares". I guess we may just have to go with the flow and hang our monetary butts out onto the "investment clothes line" as far as we dare; and hope a big wind "market correction" does not come along and blow all of the new investment clothes onto the dirty ground. Former President G.W. Bush was the "decider" and Mr. Ben at the FED has created the world of the "riskers". Scott and others at FA mentioned/discussed a year or so ago about the possibility of the DOW going to 30,000, and other indexes moving to similar high turf. I guess all of this is possilbe; as more than ever, we really live in a world of "funny money". Our mish-mash portfolio is really getting its YTD pants beat off by the equity sectors; 'course we also do not stand to get the big face slap either, if and when the "machines" decide to go to the equity sell mode.
Good investment fortune to all in the coming months.
The old Funds Boat may make 5% or 25% this year. I expect some rough waters, changing winds and opposing currents; causing the most serious attention being given to a firm hand upon the rudder control.
How our boat's cargo is doing:
Week: = +.69%
YTD = +4.45%
And the cargo is:
CASH = 15%
Mixed bond funds = 78.4%
Equity funds = 6.6%
-Investment grade bond funds 12.2%
-Diversified bond funds 18.5%
-HY/HI bond funds 28.8%
-Total bond funds 14.6%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 6.6%
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
DHOAX Delaware HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
DGCIX Delaware Corp. Bd
FBNDX Fid Invest grade
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
TEGBX Templeton Global
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FCVSX Fidelity Convertible Securities (bond/equity mix)
FRIRX Fidelity Real Estate Income (bond/equity mix)
FSAVX Fidelity Select Auto
FFGCX Fidelity Global Commodity
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
---Equity-Domestic/Foreign
CAMAX Cambiar Aggressive Value
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock

IMO, David Iben is the real deal as I have discussed in numerous posts over at M*. He has consistently delivered at NWGRX, NVORX, NPTIX, NAWIX, and JGV. We have a 12% position in NWGRX, which continues to be available for reasonable minimums in Thinkorswim retirement accounts. I would really try and gain access to the institutional classes of the funds that he manages to keep costs at the lowest possible.
Kevin

RRTIX, Retirement Income R Series, is identical to TRRIX except that the "R" series snatches an extra half percent off the top in expense ratio, presumably to compensate your plans intermediary. TRRIX carries a .59% ER currently while RRTIX is at 1.09%. Bottom line: your annual return will be reduced in proportion to this added expense. This fund is the only retirement fund in Price's lineup that maintains a fairly static allocation to stocks and bonds, about 40% stocks and 60% bonds. Unlike the other retirement funds, its mix does not tilt more toward bonds over time. One option, then, would be to include this fund in your lineup and do the math to arrive at the % in bonds you want to have.
PTTAX carries a 3.75% front end load and a .90% ER. While the ER is a bit lower than RRTIX, keep in mind that with the Price fund you are also paying for the management of the stock portion.
A third option is to keep your cash and bond money in non-retirement accounts and include them with the retirement monies for allocation purposes. With the very low rates of interest available, your not gaining a whole bunch in the way of tax savings using a tax sheltered account for stable assets. Course that will change some day. Bonds vary alot, but in a stable short term bond fund or CD at current rates, it would take a number of years to earn the equivalent of the 3.75 Pimco load you'd pay up front. Not sure what the Pimco fund returned in recent years, but with rates as low as they are now, a repeat of recent performance seems unlikely. However, there is a tax break at the time you contribute to a 401K and so it may not be desirable from that standpoint to invest outside the plan. If you could do so through a separate Roth IRA (translate: lower fees and more control) it might make more sense to you. Hope this helps.

I am trying to save as much as I can in my 401k and really don't know what choices are the best. I have mostly equity funds with 30% T.Rowe Price 2030- RRTCX, 20% MSF Value- MVRRX, 20% Alger Cap Appr-ALARX, 15% Allianz NFJ Sm Cap-PCVAX, and 15% Janus Overseas-JIGRX.
The only exposure to bonds is in the 2030, so I am going100% to the PTTAX for a few months to build it up to 15%.
My company 401K is through ADP and ADP pretty much sucks in terms of service but I don't really know if the funds are quality or not. The complete list is:
I welcome all comments and observations.
Invesco Stable Asset Fund
RRTIX- T. Rowe Price Retirement Income R, + 2010-2050
PTTAX- PIMCO Total Return A
MVRRX-MFS Value R2
SVSPX- SSgA S&P 500 Index Instl
SRVEX- Victory Diversified Stock A
ALARX- Alger Capital Appreciation Instl I
FMIVX- Virtus Mid-Cap Value A
ATHAX- American Century Heritage A
PCVAX- Allianz NFJ Small Cap Value A
FSCTX- Fidelity Advisor Small Cap T
SSCRX- SSgA Small Cap R
PAIGX- T. Rowe Price Intl Gr & Inc Adv
JIGRX- Janus Overseas S

Of the funds you have listed only thee PIMCO Total Return fund is bond fund. Other funds you listed (Target Retirement funds) have some bonds but they are not pure bond funds.
If you need more bonds, get PTTAX (assuming it is load waived in 401k). Alternatively, if you have been investing all your retirement monies in a target fund, you can step down the date to pick up more bonds.
BTW, If you are investing in a mix of funds yourself, then there is no point in also getting target fund.