FYI: When Michelle Brownstein started a summer job at an apparel retailer in the late 1990s, her father made the then-teenager a deal: If she agreed to save a portion of her earnings in a Roth IRA, he would match her contributions.
In doing so, Brownstein’s dad explained, she would be able to stash away savings at a very low tax rate; benefit from decades of compounding; and, eventually, withdraw the money free and clear.
Regards,
Ted
https://www.barrons.com/articles/roth-ira-for-teenagers-51550247933?mod=djem_b_Weekly barrons_daily_newsletter

FYI: I must admit, with all that I write about the S&P 500 Index, it looks weird to see it without the last zero, as it is in the title of this article. But that is not as weird as the sustained predicament with that index regarding its “concentration.” That is, the index which holds approximately 500 stocks is essentially ignoring half of them. You see, the S&P 500 is like many indexes (and thus the ETFs and mutual funds that track them) in that its holdings are allocated by the size of the stock (“market capitalization”). That means that as big companies get bigger, as the market as a whole moves higher, and as a few high-flyers emerge into “hot stocks,” the S&P 500 becomes far less democratic.
Regards,
Ted
https://www.forbes.com/sites/robisbitts2/2019/02/14/sp-500-more-like-the-sp-50/#47859ce2136e

@FD1000 what is your upper limit of stocks since you are in preservation mode? If MA goes below 50-200 day you toggle from 5 to 2%AA in stocks? 2-5% seems like it may as well be 0%. Of course if those are individual stocks...something with large upside or large capital gains I can see holding on. I am interested in trend following so using MA is interesting to me. Regards,Mike

@davidrmoran. Lost 20.5% from it's 9/20 high to it's 12/24 low.

In my main account at Schwab, I have 3 funds, but I do add some bond funds to make it 65/35, so technically not 3 funds. PRWCX, AUENX, VMVFX. Time will tell, I'm just letting it ride.

@FD1000
>> Last year, when the SP500 lost 20%
Not seeing that. When was that exactly?

EVBAX Is Unranked In The (MB) Fund Category By U.S. News & World Report:

EVBAX portfolio is similar to Loomis Sayles Bond fund. Invested with it early on and left when it turned out to be even more volatile than LS fund. Last year this fund lagged badly, -5.7%.

Actually, CAPE is wrong. CAPE can be off by years so why use it. Sure, eventually stocks will be down at some point, they always are. There is no indicator that can predict when prices reach tops or bottoms so the best way IMO to use a mechanical method.
The easiest way is using asset allocation rebalance. Suppose you have 60/40 stock/bonds, when they are off by 5% just rebalance. No need to listen or follow any adice/experts/indicators.
I use the following for years since portfolio preservation is the most important to me because I just need 4.5% annual return for the next several decades.
The only indicator that works in real time, 100% guarantee, must relate to the price. Here is my simple formula. When the price of the SP500 goes under 50 days MA(moving average) and stay there several days I reduce my stocks % to under 5%, when the price goes under 200 days MA my stocks % to under 2%. Then the reverse.
So, how did the above work last time? Since the top at 09/2018 to today, my portfolio is up more than 3%. Last year, when the SP500 lost 20%, my portfolio lost just -0.9%. My portfolio volatility on the worse days was only 5-10% of the SP500.

This article discusses why the author thinks an inflection point has been reached that will begin to draw the P/E ratio back down towards long term historic norms. The focus on interest rate trends ties into the argument Gundlach makes in a video I posted a few minutes ago....

Here’s the problem that the CAPE highlights. Earnings in the past two decades have been far outpacing GDP; in the current decade, they’ve beaten growth in national income by 1.2 points (3.2% versus 2%). That’s a reversal of long-term trends. Over our entire 60 year period, GDP rose at 3.3% annually, and profits trailed by 1.3 points, advancing at just 2%. So the rationale that P/Es are modest is based on the assumption that today’s earnings aren’t unusually high at all, and should continue growing from here, on a trajectory that outstrips national income.It won’t happen. It’s true that total corporate profits follow GDP over the long term, though they fluctuate above and below that benchmark along the way. Right now, earnings constitute an unusually higher share of national income. That’s because record-low interest rates have restrained cost of borrowing for the past several years, and companies have managed to produce more cars, steel and semiconductors while shedding workers and holding raises to a minimum. Now, rates are rising and so it pay and employment, forces that will crimp profits...The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably high profits are artificially depressing the former and that profits are bound to stagnate at best, and more likely decline. The retreat appears to have already started.

https://finance.yahoo.com/news/cape-fear-bulls-wrong-shiller-151355864.html

According to Schwab:
Cash & Equivalents 99.51%
Government 0.49%
How exactly do you get to 6.5% that way?

As I charted STATX against RPHYX, ZEOIX and MINT, I noted a supernatural steadiness to its returns. It has returned 6.5% since inception, over the same period the others have returns something in the 3.5 - 5.5% range.
David

Yes, its that "supernatural steadiness" that really caught my eye. How do these guys manage to pull off what no other MF can?

The advisor, New York Alaska ETF Management, seems to have two employees, offices on the third floor of a nice though anonymous Las Vegas building (5550 Painted Mirage Rd) and about $90 million in assets. The founder's, Ofer Abarbanel, Linked In profile identifies him as "Founder, Prime Brokerage Ltd, Aug 2000 – Present. Contact Prime Brokerage Ltd is Israel's No.1 ranked Non-Bank Secured Credit Brokerage firm which specializes in Securities Lending, Covered Bonds, TRS, CDS and Repo transactions."
The manager, Nicholas Abbate, "has significant experience in capital markets [through] various roles at Knight Capital Group," but extensively as "a market maker in NASDAQ securities and Over the Counter Bulletin Board (OTCBB)/OTC Pink Securities in various sectors." He left KCG in 2010 and, for four years, was an independent real estate investor and developer.
As I charted STATX against RPHYX, ZEOIX and MINT, I noted a supernatural steadiness to its returns. It has returned 6.5% since inception, over the same period the others have returns something in the 3.5 - 5.5% range.
No opinion or recommendation, just a bit of additional data.
David

@johnN: FWIW ... I have not bailed from the markets nor have I jumped largely to cash.
Old_Skeet has raised some cash ... but, I have not bailed. I'm still with my "all weather" asset allocation of 20% cash, 40% income and 40% equity. Now being in my early 70's I felt it wise to increase my cash and income areas by about 5% each and throttle back my equity area by about 10%. This put me at 20/40/40. Within equities I'm tilted towards value.
With the strong upward run stocks have lately had has skewed my asset allocation and put me a little equity heavy. To solve this, I'm simply putting new money to work in my cash and income areas while I'm letting equities build.
At the end of the first quarter I may decided to rebalance if warranted. My rebalance threshold is + (or -) 2% from my target allocation for both my income and equity areas while I generally let cash float. With this, I could be up to 42% income and 42% equity and at 16% cash and not rebalance. Going the other way, I could be 38% income and 38% equity and 24% cash (or somewhere in between) and not rebalance being inside the upper and lower limits of my gardrails. Thus my asset allocation along with my gardrail stops has become part of my risk management tool kit while allowing for some asset valuation movement without triggering a portfolio rebalance.

I'm normally 80-20 stocks but over the last 18 months have been cutting back slowly to now about 55-45. About 20% is cash now. Don't know if it will pay off, but I'm at a point in my life that it is better to keep what I already have than to build it all over again.

Small post Xmas new yr crash...
Is it another small hump before the real large crash - 35%s bound to happen
Anyone jumping largely to cash + govt bonds beside Ted and skeet.. Bailing out?!

FYI: Famed bond fund manager Jeffrey Gundlach said some high-net-worth individuals should be paying more in taxes. The rate he pays in taxes, however, is high enough as is, he said.
Regards,
Ted
https://finance.yahoo.com/news/jeffrey-gundlach-tax-high-net-worth-individuals-211226955.html

Dear friends,
In an interesting development, Eric Cinnamond (ex of Intrepid Endurance ICMAX and Aston/RiverRoad Independent Value ARIVX) and Jayme Wiggins (ex of Intrepid Endurance ICMAX) are joining forces to launch the Palm Valley Capital Fund. A small cap absolute value fund. 1.25% expenses (undercutting ICMAX on price), $2,500 minimum. ICMAX has a cluttered manager history with both guys on the fund from 2005-08, then Wiggins leaving in 08, Cinnamond leaving in '10, Wiggins returning in '10 and leaving in '18. Mark Travis, the firm's founder, helped manage the fund from 2005-17, left, then returned for about four months after Mr. Wiggins' sort of sudden departure. ICMAX is now managed by three guys who I don't particularly know.
Messrs Cinnamond and Wiggins are both excellent stock pickers, a fact mostly masked by their absolute value orientation. At base, absolute value investors believe that stocks are sometimes insanely profitable but are always insanely risky. The only rational time to buy is when you can buy them at a 50% discount to what they're worth. In most markets, there are dozens of stocks, especially the stocks of tiny firms, that are massively undervalued. In part of every market cycle, though, such bargains disappear as momentum investors and froth fiends pile in. When that happens, absolute value guys run out of stuff to buy and begin building cash. Later still, their holdings become uncomfortably expensive (that is, risky) and get sold one by one; if there's nothing to replace them, cash builds further. Somewhere in there investors with short memories are seized by FOMO and flee from the absolute value funds to the funds that have made the most profit during the market's frothy phase. Somewhere thereafter, the market collapses, the folks in the riskiest funds get burned the most badly and the absolute value investors make a mint for their remaining investors. Shortly thereafter, panicked people fleeing the high growth funds rush in the door, assets soar and the cycle begins anew.
Market cycles usually run around seven years, but the intervention that probably saved the economy in 2008 kept market valuations from plumbing their normal bear market lows and a decade of effectively zero interest rates have prolonged the current one. As a result, absolute value guys were holding historic levels of cash for historic periods; in consequence, they became historically unpopular. In 2016, Mr. Cinnamond decided to liquidate ARIVX which was sitting at about 90% cash; his argument was that he didn't see an immediate prospect for a return to normal valuations and he wasn't willing to indefinitely charge his investors equity fund fees for something close to a money market. In 2018, for reasons not made public, Mr. Wiggins left ICMAX which was sitting at about 85% cash.
The launch of Palm Valley, likely at the end of April, raises interesting questions (what led the managers to decide that this was the time to beginning raising capital which will only be useful after a really substantial correction?) and will offer a really interesting opportunity for small cap investors who are intensely aware of the need to manage the enormous extremes of such stocks.
https://www.sec.gov/Archives/edgar/data/1650149/000089418919000884/spt-palm_485a.htm
David

Does anybody know what the 5 letter symbol is for fund 82 on the Great Owl listing? It is named as the American Funds Growth Allocation Portfolio C. I went to the American Funds website and only found the American Funds Growth Portfolio, GWPFX.(F1) Are these the same funds? On this website instead of a 5 letter symbol, the number '10923M609 is listed.

@MJG - Thanks for the link. I feared it was some MonteCarlo sim - but it isn’t. :) Let’s folks imput different allocations to many different classes of equities, bonds, cash etc. and see how they performed over specified time frames. Should be of interest to many.
If possible, some of us “seniors“ should by now be able to do our own back-testing. I ditched my fee-based 403B “advisor” (skimming 4+% off contributions) in ‘95. Switched to TRP and took charge. I’ve got some rough recollections of my investment history from ‘95-‘98. After ‘98, when I retired, I began keeping detailed records. I know how I was invested each year and what the % of gain or loss was. The plan changes little - but I’m aware of when allocation changes (mostly age-related) occurred. That’s my back-testing - detailed records spanning nearly a quarter century.
I know what my IRAs were worth in ‘98. I also know I’ve now withdrawn considerably more dollars over those years than the beginning balance. And I know that I currently have nearly double the amount invested that I started with. (Withdrawals didn’t begin until 5-7 years into retirement.) Over the first 7-8 years investments compounded at around 7% yearly - but less in recent years. Except for 2008 when I lost 20% (followed by +28% the next year), I can’t recall another down year of more than 5 or 6%. I don’t consider these returns very good relative to others. I’ve always been very risk averse.
Of course, a dollar today isn’t worth what it was in ‘98. Assuming a 50% decrease in purchasing power over those 21 years, I’m at about where I was when I retired. One source estimates inflation averaging slightly above 3% over a 20 year time-frame with prices roughly doubling over that time. (Can’t vouch for its accuracy.) https://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp
Maybe what I’m saying here relates mostly to the value of keeping good records. No attempt to tout returns. As I said, many will have done much better. (I’m in envy of a number of others on the board. :) )
Regards
* Footnote - Being conservatively positioned allows me to remain 100% invested all the time in a wide variety of fund types, including a modicum of cash. Mention that because many maintain multi-year cash reserves separate from their “investments” and exclude that cash when calculating returns. May result in apples-to-oranges comparisons.

The answer is actually "it's different for everybody." There is no formula.

Couldn’t agree more. Some have no REI since everything is covered by SS and pensions. My REI is 45 years and I am about to turn 72. That tells me I need to obsess more about spending my nest egg instead of more accumulation. But old habits are hard to break. Even more so since in early January there was a buy signal I have seen but 4 times since 1960.