FYI: If you just entered the workforce, it’s time to start preparing for retirement. Over the next four decades, you might pull in tens and perhaps hundreds of thousands of dollars every year. An October 2012 Census Bureau study estimates that those with a bachelor’s degree have average lifetime earnings of $2.4 million, figured in today’s dollars.
Of course, it’s lucky you have all that income coming in, because ahead of you lies life’s toughest financial task: amassing enough money so you can retire in comfort. In dry economic terms, your working career is about accumulating enough financial capital, so that one day you’ll no longer need the income from your human capital. This, alas, is a task that most Americans are not good at.
Want to do better? As you ponder how to pay for retirement, it’s helpful to think about your life in three stages—your 20s, 30s and 40s, your 50s and early 60s, and age 65 and beyond—which is how this part of the guide is divvied up.
Regards,
Ted
http://www.humbledollar.com/money-guide/retirement/

Okay, since we're off topic anyway, I'll add that my dad took me to my first MLB game - the first Colt .45 game, in '62, an offensive show against the Cubs. The one mental picture left is Al Spangler's triple to the corner in right in the bottom of the first that drove in the first run in franchise history.
A shot of Al on his '63 Topps b-ball card ...

Tortoise Capital Advisors:
http://www.businesswire.com/news/home/20171005006383/en
Morgan Stanley:
https://www.morganstanley.com/im/publication/forms/tax/2017-estimated-yearend-distributions.pdf

1962 was before my time, Ted!
White Sox played great in 2005. Jermaine Dye & friends were awesome. I believe they had the best record in the AL that year.
That Astros team won 89 games, finished 11 back of St Louis, and clawed their way to the World Series as a wild card. No one around here expected them to get that far.
It was Biggio and Bagwell's last hurrah. As great as they were, they rarely produced in the postseason. In nine postseason series together, Biggio hit .234. Bagwell .226. Went 5 for 26 combined against the Sox. Sad face.

@PBKCM: Nice Astros win ! Do you go back as far as the 1962 Colt 45's. But the best is when in 2005 the White Sox swept Astros 4-0.
Regards,
Ted

Thanks @Ted
From today's summary:
"The S&P 500 Index advanced 0.6 percent to a record 2,552.07 at 4 p.m. New York Time.
The Dow Jones Industrial Average added 114 points to 22,755, rising for the seventh day in a row to a record. The Nasdaq 100 Stock Index rose 1 percent to 6,057. The Stoxx Europe 600 Index gained 0.2 percent after falling as much as 0.3 percent. Spain’s IBEX Index rose 2.5 percent, the most since in almost six months."
Pretty numbers. But my benchmark, TRRIX (a conservative 40/60 fund for old farts) was flat. My holdings did slightly better at +.07%. Nothing I hold was particularily strong. OAKBX (+.35%) has been running slightly ahead of the pack in recent days (perhaps on it's GM stake?)
What gives? a 100+ point rise in the Dow and my allocation fund didn't budge a bit. Guess bonds gave up a little, but nothing dramatic. (Donald's remarks hurt munis.)
Strange markets.
Edit: Mystery solved. The fund was late posting its day's results. Actually, TRRIX did gain a couple cents (+.13%) for the day. I'd forgotten that these types of allocation funds are sometimes late due the large number of different funds they invest in. If just one of those comes in late it affects the posting of nav for the allocation fund.
Still, weird markets I think.

FYI: The three main U.S. indexes climbed to fresh record-highs for the fourth day in a row on Thursday, fueled by gains in technology stocks, including Microsoft (MSFT.O) and Amazon.com (AMZN.O).
Nine of the 11 major S&P indexes were higher, led by the information technology .SPLRCT and financial .SPSY sectors. Tech stocks, which have powered much of the recent rally, have risen about 26 percent this year.
Regards,
Ted
Bloomberg:
https://www.bloomberg.com/news/articles/2017-10-04/dollar-bonds-are-listless-as-oil-drops-below-50-markets-wrap
Reuters:
http://www.reuters.com/article/us-usa-stocks/wall-street-indexes-scale-fresh-record-highs-on-tech-gains-idUSKBN1CA18I
MarketWatch:
http://www.marketwatch.com/story/us-stocks-set-to-hover-at-record-levels-with-fed-speakers-in-the-spotlight-2017-10-05/print
IBD:
http://www.investors.com/market-trend/stock-market-today/nasdaq-leads-solid-up-session-as-bull-run-continues-unabated/
CNBC:
https://www.cnbc.com/2017/10/05/us-stocks-sp-record-high.html
AP:
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
Bloomberg Evening Briefing:
https://www.bloomberg.com//news/articles/2017-10-05/your-evening-briefing
WSJ: Markets At A Glance:
http://markets.wsj.com/us
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures: Positive
https://finviz.com/futures.ashx

@David; "On the Nifty 50 indexing issue, we have certainly considered the effects of indexing at our shop." For those of us who are unwashed like me, who or what is PBKCM ?
A. Fund Company Executive ?
B. Fund Manager ?
C. Fund Analyst ?
D. Back Office Worker ?
E. Janitor ?: Custodian ? (Being politically correct)
F. Joe, The Pizza Delivery Guy ?

You raise some important issues, LLJB.
There are over 28,000 mutual funds. Roughly 10,000 if you disregard share classes. Trying to pick which ones will outperform is mind-numbingly difficult. Compare stocks, where approximately 1700 stocks comprise 95% of the market cap in the US. Websites like this one are vital for mutual fund investors to separate the wheat from the chaff.
In terms of indexes, let's not forget that the S&P 500 et al are not passive. They are actively managed indexes whose constituents change frequently over time. I don't know what the performance would be for the orginial 500 S&P stocks to date, but it would be far, far worse than what history currently shows.
The hardest thing for active managers to do is to beat their benchmark (after fees) during an uptrend. In my opinion, the managers with the best chance to do so are quant funds. The potential for substantial outperformance from active managers comes in sideways/down markets. I became PM at my shop on 1/31/16. We got long a couple of weeks later and my partner and I haven't had to face a sideways/down market since (although there were a couple of scares). We are busy trying to "win the peace."
But we're preparing for war.

@PBKCM, it's a very good point but I think you're leaving out a couple of points that I'd love to have your perspective on. First, as long as 20 cents of every new dollar in the stock market goes to passive and 80% of that goes to market cap weighted passive, there's a lot of momentum behind the continued success of market cap indices. Unfortunately, saying active management is positioned to take advantage doesn't help at all with choosing one or more of the thousands of active managers.
Mark Hulbert wrote an article in May (marketwatch.com/story/why-way-fewer-actively-managed-funds-beat-the-sp-than-we-thought-2017-04-24) based on S&P research suggesting the chances of picking an active manager who can beat their benchmark was 5% over the last 15 years. In the best category, global equity, there was a 17% chance.
When the tide finally changes how high do you think the chances will be for someone to actually pick one or more managers who can beat their benchmark, market cap weighted index? And how many of those will be able to outperform to an extent that gets them out of the hole they're in now?
Second, I wonder a lot why the discussion tends to be dominated by active and passive with the assumption that passive means market cap weighted. If we start with an assumption that you're right, that market cap weighting is distorting the weighing machine but the scale will eventually win, why should we expect active managers to do better than other forms of passive, like equal weighting or factor based? I know other forms of passive are subject to the same argument as market cap weighting, but if one day everyone gives up on market cap passive and decides to put their money in dividend weighted passive, they might outperform 95% of active managers for the next 15 years.
Just for the record, I have always been and still am almost entirely invested in actively managed funds over passive. I just struggle sometimes with the idea that we're all trying to predict the future, almost no one has been able to do that in a reliable way but everyone who engages in these discussions wants us to believe that its a logical exercise and they have the best logic.

I've noticed that the Contact Information has been missing for awhile too.

Very interesting issue, David. Congrats.
On the Nifty 50 indexing issue, we have certainly considered the effects of indexing at our shop. Despite the growing number of smart beta products, over 80% of the AUM of all passive index funds remains invested in cap-weighted products.
Cap-weighted products are by nature momentum-based investments. When momentum is in vogue (such as we saw in the Nifty Fifty era), these products can perform well. But over time, we feel cap-weighting is a terrible way to invest.
We studied the Dow, the S&P 500 and Russell 1000 over time. It turns out that Fama's size effect works well in these larger cap indexes. Over time, there is a size penalty for the biggest companies of the index, and a size premium for the smaller companies of the index.
Bill Ackman wrote in his letter to shareholders in January 2016 that 20 cents of every new dollar invested in the stock market comes via a passive index-tracking fund, and that number grows every year.
Think about this: for every dollar that goes into SPY, 12 cents goes into the largest six stocks of the Dow. For every dollar that goes into XLP, 13 cents goes to Procter & Gamble. Similar story for the other sector ETFs.
Ben Graham wrote that the market is voting machine in the short run, and a weighing machine in the long run. That in the long run, the best businesses attract the most market capital. And that's the way it used to work before ETFs.
Now, the market is hit with a blizzard of crazy votes, and it is throwing the scale off. The largest companies aren't the largest because they are the best. They are the largest BECAUSE they are the largest (and get hit in the face with ETF inflows whether their business fundamentals justify it or not).
We believe actively traded mutual funds are in the best position to take advantage of the opportunities presented by passive indexing.
Keep up the good work, David.

@bee EDV is a bit unusual in that it holds a portfolio with an extremely high duration. You've got a good idea in looking at zeros (like the AC target date funds) for other vehicles with high duration. (That's because for zeros, duration equals maturity; normally with LT bonds, duration is much less than maturity.)
But since BTTRX is a target date fund, its duration gets shorter and shorter. Its 2025 target date means that it now has an 8 year duration. Even a decade ago it started with just an 18 year duration.
If you just need a 10 year history (and not all of 2016), you can try using PTTRX. Identical 5 year return to EDV. Over the earlier part of EDV's lifetime, it did a little better. It was more stable in 2008 (not rising quite as much) and 2009 (not falling quite as much), and outperformed in 2010.
Other long duration funds didn't track EDV nearly as well (i.e. were not nearly as wild) over 2008-2009. Maybe WHOSX (duration ranged between 16 and 23 years over the past decade) would be a passable substitute if you need to cover all of 2006.

As I have expressed before, IMO; one may continue to name the ongoing markets since the big melt as still feeling the effects of policy(s) and that "this time is still different" and thus the "mean regression chart line" is progressive/dynamic, not static and has the baseline in "float" mode. The 2008/2009 market melt was/is an overwhelming shift in the financial marketplace that is still impacting and discovering its future path.
In other words, jolts to the market come along that can take years to work their way through. There may or may not be an ultra long term static "mean regression chart line", but at least for these multi-year periods, it's dynamic.
Even assuming an ultimately constant mean, because of these jolts it seems one needs an extremely long time frame to compute that average - say 100 years or more, in order to include the jolt of the Great Depression, or maybe 150 years back to the panics of the late 1800s, or ... At some point you're essentially averaging the entire "modern" history of the stock market.
More info from the 1928-present NYU/Stern data set I've cited (this table was in the spreadsheet, they're not date ranges I selected):

Period     S&P 500   3 mo Treas   10 Yr Treas
1928-2016  11.42%     3.46%        5.18%
1967-2016  11.45%     4.88%        7.08%
2007-2016   8.64%     0.74%        5.03%

. The S&P 500 is up "only" about 15% YTD. If it ends 2017 up 20%, that would raise arithmetic mean of 2007-2017 just to 9.68%. If you're a believer in a constant long term mean, that suggests that recovery from the 2008 jolt still has years to go.

@catch22,
Using portfolio visualizer I was able to create a third scenario, a 50/50 portfolio of LT treasuries (I used BTTRX since data wasn't available on EDV back far enough) and your EFT choice, SDY.
Compare the data in yellow. Since 2006, 50/50 portfolio has gotten you the same return as a 100% all equity dividend paying EFT like (SDY), with a lot less of a roller coaster ride.
Will this be the case going forward? I think non-correlated assets will help provide smoothness, but returns may be muted for many asset classes.

Hi @msf
Thank you for your presentation.
I started this reply to the thread relative to the bond portion of this discussion. I've obviously blipped more just below.
What I'll name, The Exquisite Investor; being without much meaningful flaw as to getting the timing right 75% of the time and being patient enough to wait until the next trading (buy/sell) shows its face via technical numbers in particular, but with an understanding of real world events that can/do/may factor into why the technical numbers arrive and depart creating a more possible profitable investment.
I suppose this process could place this as to one being a "value" investor; being careful enough to try to understand that some "value" within investment sectors is cheap for a good reason and may remain cheap for a long time; a perverted "mean".
As I have expressed before, IMO; one may continue to name the ongoing markets since the big melt as still feeling the effects of policy(s) and that "this time is still different" and thus the "mean regression chart line" is progressive/dynamic, not static and has the baseline in "float" mode. The 2008/2009 market melt was/is an overwhelming shift in the financial marketplace that is still impacting and discovering its future path.
I may be completely wrong about any or all of this....tis my view at this time. @Tony may respond as to the technical side.
The below chart compare for about 10 years for EDV and SDY may surprise a few folks for total returns over the time frame. I recall @bee using EDV for reference points against other sectors for cross over points, etc. I fully expect most folks would not consider a holding as EDV or similar versus a more likely holding of a total bond fund or a 10 year Treasury fund for a bond area investment. One is able to view the movement of EDV and cross overs points relative to my pick of SDY for reference, especially during the ongoing turmoil of the markets for several years after the melt. Europe, in particular; was still attempting to find a path forward for several years, which includes events as "Greece" being in the news headlines as well as the ongoing, questionable stability of many European banks during the "recovery" period.
Yes, the 10 year Treasury will remain a reference point and this is valid for on overview of risk on or off conditions, but remains a choice of various bond types, eh?
http://stockcharts.com/freecharts/perf.php?EDV,SDY&n=2467&O=011000
Okay, time for another coffee, yes?
Regards,
Catch

@Crash
RBC appears to be more than fairly priced at this point in time. If interest rates really move upward over the next few years; one may have a chance to have some profit from current pricing levels.
http://stockcharts.com/h-sc/ui?s=RY&p=W&yr=5&mn=0&dy=0&id=p16334527354

A basic problem with "the rule called 'regression to the mean'" is that it assumes what it purports to show, viz. that the mean doesn't change.
For example, since 1928, the S&P 500 has averaged around 400. Anyone expecting it to "regress to the mean"? I didn't think so. Why not? It's because the mean isn't a constant - the S&P has an upward bias.
On what basis are we to assume that the market rate of return doesn't also change over time?
The business insider article showed that 20 year time frames are too short a time to compute an average for "market" returns - even assuming that there is some constant long term average. The graph there showed that the average return over 20 year periods ranged from 6% to 18%. Hardly a constant average.
So now we have two questions. The original: Is there a single long term average return for the market? We now add: how long a time frame do we need to use to get even a decent approximation of that "constant" average.
Rather than explain things, "regression to the mean" shows how people take something on faith (consistency of long term returns) to circularly prove that over the long term, a certain average rate of return can be expected.
People like to assume constancy. That's the point of the seeking alpha piece. Market doing well? That will continue; not. Market return averaged X% in the past? That will continue. Maybe, maybe not.
Just for the record, "mean regression" is a short term prediction - it says that when the last value of a random variable is sufficiently far from its mean, the next value it assumes will more likely than not be closer to the mean.
http://mathworld.wolfram.com/ReversiontotheMean.html
If a random variable truly has a constant mean, then over time you'll approach that mean, not because of mean regression, but because of the law of large numbers.
http://mathworld.wolfram.com/LawofLargeNumbers.html

Hi Guys,
Change happens; it is a certainty.
"Richard Russell, the famous Dow Theorist, once noted that over a shorter time frame almost anything can happen in the financial markets, but over much longer, meaningful periods of time (referring to years), the surest rule in the stock market is the rule called "regression to the mean.""
This quote was extracted from this regression advocating article:
https://seekingalpha.com/article/2315705-regression-to-the-mean-and-why-investors-should-not-ignore-its-importance
I am in complete agreement with the main theme of this article. There is a compelling and irresistible market pull towards a regression-to-the-mean. In any single year, almost any extreme is possible; anything can and does happen even if probabilities are low. But as the timeframe expands, the marketplace adjusts to deliver more predictable average returns. Over time, sanity rules.
I have zero confidence that I can predict tomorrow's market returns, but I am very comfortable about staying in the market for the loooong run.
Best Wishes

A factor that affects returns about as much as expense ratio is turnover. Here's an old but readable column citing research from a decade ago supporting the thesis that trading costs amount to at least as much as costs included in the ER:
https://www.advisorperspectives.com/pdfs/newsltr27-2.pdf
I tend to lean toward managed funds, but at the same time I also keep an eye on expenses, both documented (ER) and implicit (trading costs via turnover). FWIW, with the exception of a few placeholder positions I have (in case I ever want the funds), and one major bond fund holding, all of my funds have less than 50% annual turnover. Of those, all but one fund has under 40% turnover.
M*'s portfolio analysis claims that my weighted average ER is about a half percent below a "similarly weighted hypothetical portfolio". So while my expenses are not rock bottom, I'm satisfied with my average expense ratio too.
One minor gripe concerning the cited AAII article - it uses RMDs as withdrawal amounts. The main problem with this is that people's need for cash in retirement is fairly stable, as opposed to RMDs. RMD calculations require you to take 1 / (remaining lifetime), which grows exponentially as you get older and your expected lifetime shrinks toward zero.