I am trying to understand how a fund can be considered outstanding when for the last 10 years it could not keep pace with the S&P, for the last 15 years was ahead of the index by only 0.46%, with volatility higher than the benchmark - for most of the period. If this is considered 'enviable long-term results", then indexing is indeed attractive.

+1

I am trying to understand how a fund can be considered outstanding when for the last 10 years it could not keep pace with the S&P, for the last 15 years was ahead of the index by only 0.46%, with volatility higher then the benchmark - for most of the period.
If this is considered 'enviable long-term results", then indexing is indeed attractive.

>> the time to be in PRPFX is when stocks are heading south and the metals are heading north.
If that happens.
https://twitter.com/paulkrugman/status/885926494937128960
some of the responses are good

PRPFX owns both gold and silver. One might be able to get close owning CEF - Central Fund of Canada which contains roughly 65% gold and 35% silver. As mentioned by others previously the time to be in PRPFX is when stocks are heading south and the metals are heading north.

@hank, the etfs I used for comparison were VTI for stocks, TLT for bonds and GLD for gold, so its physical bullion. For cash, portfolio visualizer has it's own version of cash, CASHX, which I don't think is a real fund, but the rate it earns in their model has to be based on a money market fund or a bank account, I'm not sure. In fact, portfolio visualizer has a pre-configured portfolio for Harry Browne's Permanent Portfolio and I just compared that to PRPFX starting at the beginning of 2005.
According to Wikipedia, "the Permanent Portfolio mutual fund, however, is more complex than Browne's original concept and has six asset categories. The fund aims to invest in a fixed percentage of uncorrelated, asset categories to minimize risk in changing economic climates. These include 35% in government bonds, 25% in gold and silver bullion, 15% in growth stocks, 10% in cash and Swiss francs and 15% in energy, mining, and real estate stocks."
I certainly wouldn't want to put all my eggs in history's basket, but PRPFX has seen a lot more volatility in getting to what, at this point, is a worse return, at least in the last decade plus. My understanding of Browne's intent was to have a portfolio that would be profitable in any type of economic environment. In my simplistic way of looking at things that suggests less volatility and that's not what the fund has delivered. I have no idea which will do better in the future but considering the expense ratio together with the historical volatility, I'd far prefer a straightforward etf approach if I was going to invest in something like this.

An additional thought related to PRPFX. Harry Browne's simpler approach that this fund is based on, allocating 25% each to stocks, bonds, cash and gold, is easy to copy with far lower cost etfs and the historical performance has been better on both an absolute and risk-adjusted basis. Of course that's all history, but the guys who run this fund haven't shown that they're 'system' is any better than Browne's and whatever active management they've done certainly hasn't added enough value to justify their management fee. With only $2 billion of AUM they're still earning a management fee of $20 million each year. It's no wonder why we have 10,000 distinct funds chasing $30 Trillion of AUM according to Charles' update recently. Who wants to start a mutual fund? I'm totally confident I can do far better than these guys and charge far less.

FYI: Gold-rated Dodge & Cox Stock’s seasoned team, low fees, and decisive value approach have led to enviable long-term results.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=815776

I have no reason to believe Foster has suddenly taken dumb pills. He has ably managed dollars for my clients and me for about 10 years, first at MAPIX and with SIGIX since he started that fund. I frankly do not care if the fund under-performs during an EM bull market. It is up about 12% year to-date. I'll gladly take that. The way bigger test for me is when EM is struggling, as they did in 2013, 2014, 2015, and even 2016 to some extent. In those years, SIGIX came through as I expected it would. If you bought SIGIX for outsized gains during EM bull markets, you bought the wrong fund. That is not how the fund is run. While I am sure Andy would like to be at the top this year, and that he is frustrated to be near the bottom, that does not bother me one bit.

The original post did not suggest selling the fund - only "disappointment" on hearing Foster's explanation. And the query appears directed mainly towards other investors in the fund. It's their b***s that's in the fire. I commend Lewis for his fair and judicious handling of the issue in his last post.
Listened to the first 5 minutes of the linked interview and thought Andrew Foster sounded kind of stressed out trying to explain his fund's recent performance. Yikes - if this is the life of a fund manager, who would want the job? Every day at 6 PM your fund's gain/loss is splashed all over the internet for the world to see. Who wants to be graded nearly every single day of their life? A few clicks at M* brings up your weekly, monthly and yearly performance. Tough seat to be in. Like it or not, that's how many (dare I say most?) investors today evaluate their fund managers. The fund flows speak for themselves.
" He’s a man way out their in the blue riding on a smile and a shoeshine.
And when they start not smiling back—that’s an earthquake."
(Arthur Miller)

Another way to play the "Innovators" Concept is with IWIRX , more than just Asia, it is global and beats MATFX in 1, 3, 5 10 and 15 years. It has not done as well as MATFX ytd, but worth looking at if you like the Innovators concept. I own it and plan on keeping it for the long haul, recently added to it. There is an interview with David Snowball a few years ago on MFO.
http://www.mutualfundobserver.com/2014/08/guinness-atkinson-global-innovators-iwirx-august-2014/

It looks like they all did only that some did it better than the others. The only trouble I have is the usual and customary past performance is ..... blah-blah.

Yeah - Me too. If humans lived to be 300 and spent 100 years in retirement these kinds of simulations would be a lot easier. Market cycles are more predictable over 100 years.
Just for fun, from January, 1992:
Dow - around 3000.
NASDAQ - around 600
10-year Treasury - around 7%
Gold - around $350
Never considered PRPFX an income fund. Not sure why it was included. If anything, it's a "wild card" - liable to do almost anything over 25 years - with the potential to hold up better during periods of unusual financial stress due to investments in precious metals (25%) and Swiss Francs (10%).
Personally, I don't think in these terms (generating income in retirement). Probably because my overall positioning is quite conservative, having a lot of hybrid products, I pull distributions "off the top" without the concern about market fluctuations many voice. (That's not to say I don't include income generating investments for diversification within the whole mix.) Guess my approach is quite unorthodox - based on board discussions.
@Mark - I hope @ Old_Joe gives us the color of those things he never thinks about. :)

@catch22 - I think you misconstrued the point of the article/exercise. The exercise was to determine how these 4 funds would hold up over a 25 year withdrawal period assuming a 4% withdrawal rate with a 3% inflation kicker each year of withdrawal.
Set up another way lets say you decide to quit working in 1992, so you take all of your savings ($100K), plop it down in one of these funds, and then withdraw the 4% and the added 3% of that over the next 25 years. Will any or all of the funds hold up?
It looks like they all did only that some did it better than the others. The only trouble I have is the usual and customary past performance is ..... blah-blah.
It was just a barebones look at the numbers, a "what if" if you will.

Hi again @bee
Opps, you did have the question; which fund?
I would vote VWINX, too. We have some money in this fund.
A chart compare of the 4 funds starting with Jan. 1999.
A few points:
---one may see the market melt area
---also reactions to the U.S. AAA downgrade in July of 2011
---there was also a bond blip/psuedo sell off in mid-July, 2015
Also, that after the begin of the U.S. recovery in markets in March of 2009; Europe in particular, but also Japan were still very twitchy markets for several years after and for whatever reason, as I recall, most of the market jerks were in the late spring months. We know that Europe has just began to find some favor within the last 9-12 months.
PRPFX seems to have had a stumbling time since early 2011.
USBLX and GLRBX appear to have flattened a bit from early 2015.
Jan. 2015 to date:
---USBLX = +15.3%
---VWINX = +14.7%
---PRPFX = +7.7%
---GLRBX = +3.6%
The last two above remind me of VILLX , which was a very decent fund and then fell on its face in 2014 and 2015 and has not been very happy since. I read about investment rotations with this fund moving more into sm/mid cap and apparently the fund is still stuck in a funk.
http://stockcharts.com/freecharts/perf.php?VWINX,PRPFX,USBLX,GLRBX&n=4662&O=011000
Regards,
Catch

My daughter starts college this fall and it is completely funded by a 529 account. Knowing that we have only 18 years investment horizon, we started a month after arrived once we got her social security number. We continue to invest through the ups and down including the 2007 downturn. Thanks to monthly automatic investment and many discussion on this board. And it all pays off now.

Hi @bee
A few quick observations, with a quick read of the article, as outside chores await.
---Writer didn't note whether the investments are all, any or partial IRA monies
---Writer didn't note any other income/living sources
---Writer didn't state age....over 59 1/2 ???
I don't follow why the writer moves the dividends to a money market account. This move skews all of the data work he did with his graphics. How the hell does he think the 25 years of data he noted arrived? Not from removing distributions.
If these monies were rollovers into IRA's or mostly IRA's at the time of his write, he wold be required to pull about 4% after age 70 1/2. We don't have any reference to any of this.
I could not offer any opinion or suggestion to this writer, as there isn't enough information provided.
Regards,
Catch

The following Article was posted here at MFO back in February and I wanted to rekindle the conversation regarding your strategies for generating retirement income from your investments.
The article looks at 4 open-end mutual "conservative allocation" funds using the following criteria:
VWINX, USBLX, GLRBX, PRPFX
The Retirement Income withdrawal will be 4% of the beginning investment value with each successive year's withdrawal increasing by 3% to allow for inflation. Any dividends collected in excess of this will be accumulated in a money market account (MMA) until the year the mutual fund produces less in dividend income than is required and the difference between the next year's household income need and the dividend collected is taken from the MMF. I'm assuming the interest rate on the MMA is zero. If the collective cash reserve is not sufficient…or non-existent…and the dividend collected that year is not sufficient to meet household income need, then sufficient shares will be sold at the end of the year to provide the required cash. This is repeated each December at the end of the month (last trading day).
The clear winner over the the last 25 years?
Read on:
https://seekingalpha.com/article/4050402-long-term-growing-income-open-end-mutual-fund-possible

Hi @Old_Skeet
First, we have not been front or back loaded fund investors, and have never used an advisor. I recall discussions with a friend back in the early 80's about an investment club he helped organize and they were going to use a local Merrill-Lynch broker/office. Others here or you may help with this; but I recall some of the mutual funds under consideration with ML had loads as high as 8%. Is this accurate from the early 80's?
We steered all of our personal investments to Fidelity and never had any investments with the big money houses of the day with the front/rear loaded funds.
Note: for the newer investors, Fidelity did have loads on some funds (3%) and I have a list stashed away somewhere in a filing cabinet from the way back days.
Secondly, a question about your loaded fund investments; at least your long ago initial purchases.
A presumption on my part of how the front loads may work:
Example: Fund "x" has a front load of 5%.
I will presume at some monetary level one no longer pays any load to add more money to the "same" fund? I'm guessing at levels, but perhaps the first $2,500, $5,000 or $10,000 of monies has the full load and then the load is no longer, yes?
The only clear status of the loads that I understand is payment, at least in part; to a/the firm and/or an advisor for their work.
Anyway, would appreciate your description of how this works or did work.
Regards,
Catch

Hello,
Thanks @carew38 for the question.
No, I was never charged an additional sales charge that I remember. This is not to say all my purchases were in bond funds which got moved to equities. The way I learned to do this was through a seasonal investment strategy where during the late spring I'd do some nav exchanges from equity funds to bond funds. During the summer months I'd buy more of the bond type funds; and, then come fall I'd move some back to the equity type funds. Nothing was ever said, to me, nor was I charged any additional commission and/or fees to do these nav transfers other than the commission I paid when additional shares of the bond or stock funds were purchased. With this, I started to purchase more bond funds than equity funds and made portfolio adjustments through more and more nav transfers from bond funds to equity funds. And, I did this for a good number of years. Now, in retirement I am doing less and less new purchases; however, I am moving a good bit of money from all equity funds to some hybrid type funds (over time) rather than to bond funds. I am wanting to grow my footprint in hybrid funds by about one percent per year while reducing all equity fund holdings by a like amount. Currently, about 20% of my portfolio is in cash and cds, about 10% in bond funds, about 45% in hybrid funds and the remaining 25%, or so, in equity funds. When Xrayed this produces an asset allocation of about 20+% cash, about 30% domestic equity, about 20% foreign equity, about 25% bonds and about 5% other. Notice I used the word "about" a good bit because the percentages are rounded to the nearest 5% whole number. As the equity allocation contines to grow I periodically rebalance and move some equity money to hybrid money through nav exchanges. In doing this the hybrid type funds generally have a broader investment universe that they can invest in over other fund types giving the hybird fund manager leadway within ranges, of course, to position into assets classes they feel will offer the better returns and/or offer a more complete investment package. This makes my overall portfolio more adaptive to the ever changing investment environment more automatic whether due to seasonal trends and/or investment activity in the markets by other investors relative to positioning.
For me, one of the better benefits for A share investors is the ability to do nav exchange transfers without paying additional sales charges. I believe the level load funds many classified as T shares do not offer the free nav exchange transfer option.
I hope this somewhat lengthy answer is helpful to understand how and why nav exchanges were made along with cost associated, for me, with these nav transfers.

Over the last dozen years, I think, one of my kids did an undergraduate econ paper analyzing Apple, then revisited it in grad school, and after that as a blogger --- and each time (so now perhaps up to 4-5 instances), I thought to myself, 'Hmm, interesting, I wonder, ... still looks awfully expensive, we better pass.'
Phooey.

@Old_Skeet-when you paid the lower sales charge on the bond funds, did the brokerage ever charge you the higher sales charge when you moved into the stock funds? I know I wish I had been willing to pay the 5% sales charge on SGENX in 1993.