@Sven Puerto Rico bonds are exempt from federal and ANY state taxes. That is why OPCAX, CA muni fund I own holds 11% Puerto Rico muni. The fund is up 0.83% today. Even ORVAX with 33.8% Puerto Rico bonds is up 0.36% today. Something I do not understand.
I just noticed that the article is from 2015 and percentage of Puerto Rico bonds is outdated.

Several Oppenheimer muni bond funds hold many Puerto Rico bonds. Ouch!
http://cnbc.com/2015/06/30/is-your-bond-fund-invested-in-puerto-rico.html

The restructuring of Puerto Rico's roughly $70 billion in outstanding debt would be the largest in the history of the U.S. municipal bond . However, the reaction of the muni bond market today is very positive - they all up sharply. Any idea why?
http://www.cnbc.com/2017/05/03/puerto-rico-officially-triggers-bankruptcy-protection-proceedings-.html

The arithmetic, the reasoning, and the writing are all a bit off in this column.
The best I can do in guessing where that $3245 (-67.55% total return) came from is that the writer flipped four signs. Instead of +30%, +30%, +30%, -20%, -20%, he used -30%, -30%, -30%, + 20%, -20%. That comes out to $3293. Still not what he got, but maybe he can't multiply, either :-)
The sentence that Tony quotes does explain things, but barely manages to convey the thoughts. Tony is right that order doesn't matter, and that's what the sentence is saying: whether you gain 20% and then lose 20%, or you lose 20% and then gain 20%, you wind up with less than what you started with. That's because in the first instance you're losing a bigger dollar amount than you made, and in the second instance because you make back less than you lost.
If you want an investment with a surefire minimum volatility, have I got the perfect investment for you. It's called cash. Won't return a dime, but will do that consistently, year in, year out.
Reducing volatility may also reduce average returns. Vanguard said as much when it introduced VMVFX - that this fund would reduce volatility, but not maximize returns.
The basic premise of the column, that all else being equal, lower volatility yields better returns does not lead to the conclusion that you can do better with lower volatility. That's because all else is not equal - lower volatility doesn't come for free.
IMHO it gets worse at the end of the column, where the suggestion is to invest in funds that in turn pick low volatility stocks. I generally expect stocks with similar attributes (here, low volatility) to have higher correlation than stocks that have nothing in common. Combining low volatility stocks does not strike me as a way to reduce the volatility of a fund or of a portfolio.
In another description of VMVFX, Vanguard states: "We look at the interaction between the individual stocks and their cross-correlation with one another ... [to] further lower the overall volatility."
If your idea of investing in low volatility is in line with this - that you want a fund with low volatility, as opposed to a fund holding lots of securities with low volatility - then you might prefer something like USMV rather than the ETFs and funds mentioned. But do it because you want to sleep better at night, not because you expect reduced volatility to lead to superior returns.

How did you find your Ideas?
peter-lynch-vs-faye-dunaways-hemline

Hello David,
As always, I thoroughly enjoyed your monthly commentary. One little caveat: I was doing the calculations on your MaxDD and portfolio impact for FPA Crescent and I think it should be 4.9 instead of 5.9, which is shown in the table. Can you check the calculation again? I multiplied 29 by .17 and came up with 4.93.
I'm doing the calculation on my current portfolio and found this MaxDD impact exercise to be quite interesting. Thank you for this.

I can't understand how the author gets to $3,245 in this example:
"Say you gain 30% a year in three years and lose 20% in the other two... your $10,000 would be worth only $3,245..." Multiplying the corresponding factors together, 1.3x1.3x1.3x.8x.8 = 1.4061, so your $10,000 would be worth $14,061, not $3,245.
Also, "... because losses after good years would be bigger dollar amounts than average, and gains after bad years would be smaller dollar amounts." is not an explanation. The order of the gains and losses in the example doesn't matter; for example, 2x4 is the same as 4x2.

@MFO Members: Article from Mutual Fund Wire.Com
Regards,
Ted
http://www.mfwire.com/common/artprint2007.asp?storyID=56114&wireid=2

Fahmy bases his prediction on three factors: technicals, fundamentals and investor sentiment — all of which he says are pointing to a big rally.

Article:
marketwatch.com/story/a-life-changing-rally-is-shaping-up-in-the-stock-market-predicts-one-fund-manager-2017-05-01?link=sfmw_fb

FYI: Low-volatility funds can give you a smoother ride down Wall Street.
Regards,
Ted
http://www.marketwatch.com/story/how-to-pocket-more-of-the-stock-markets-return-2017-05-03/print

FYI: From the moment that Steven Mnuchin first hinted back in November that the Trump administration would entertain the idea of selling ultra-long bonds, the consensus across Wall Street was pretty clear: Don’t do it. There’d be no easy way to lure a steady stream of buyers, the skeptics said, and the initiative could prove costly to U.S. taxpayers
Regards,
Ted
http://www.fa-mag.com/news/mnuchin-to-wall-street--u-s--is-serious-about-ultra-long-bonds-32571.html?print

@David_Snowball offered readers this month a peak inside his portfolio and an exercise in understanding portfolio risk using a MaxDD calculation. One thing that occurred to me was the timing or correlation of MaxDD for different assets held in a portfolio. Highly correlated assets would be additive as in David's example, but not all assets experience MaxDD at the same time. Cash has a MaxDD of inflation...always. Bonds and hard assets often expressed what I will call MaxFTS (Maximum Flight to Safety) at the very moment that equity assets are experiencing MaxDD. So holding a percentage of cash, Bonds or hard assets may very well serve at the best way to counter balance an equity asset's MaxDD.
I'll use David Snowball's table included here as a way to gauge a need for uncorrelated assets in a portfolio.

If these were my equity holdings I could approach the MaxDD risk I might hold an equivalent amount of cash equal to the impact MaxDD would have on these holdings. In David's example this would be 16.56% of what these holdings are worth at any given point in time. If this part of his portfolio (he states 55%) has a value of $100K, then $16,560 (plus inflation) might be held in cash. This would be where an investor could turn for distributions during MaxDD periods. This cash might also be used to buy discounted shares of these very same equity holdings that are experiencing MAXDD.
Bonds and hard assets in an portfolio could also serve both of these functions (distribution demand and reallocation). Bonds, especially those that experience a highly correlated MaxFTS, have proven themselves as a great counterbalance when equities falter. Here is a chart showing the benefit of holding uncorrelated assets (VFINX & EDV), the S&P 500 and Long Duration Treasuries.

I believe a well constructed portfolio needs to Ying while it Yangs. I'll assume that the rest of David's (the other 45%) portfolio includes some of these uncorrelated assets.

And, another take on what's up ... Before the bell.
http://money.cnn.com/2017/05/03/investing/premarket-stocks-trading/index.html?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+rss/money_markets+(CNNMoney:+Markets)

FYI: U.S. stock-index futures on Wednesday pointed to a drop at the open, weighed down by an earnings-driven drop for Apple Inc., the world’s largest company by market value.
Regards,
Ted
U.S.:
http://www.marketwatch.com/story/us-stocks-set-to-open-lower-hurt-by-apples-earnings-driven-drop-2017-05-03/print
Europe:
http://www.marketwatch.com/story/european-stocks-fall-from-20-month-high-ahead-of-gdp-data-fed-decision-2017-05-03/print
Asia: (Japan, Hong Kong, South Korea Indexes Closed For Holidays Australia Open)
http://www.marketwatch.com/story/with-major-asian-markets-closed-australian-stocks-retreat-2017-05-02/print
Current Futures: Negative
http://finviz.com/futures.ashx

I understand why J. Bogle is not into International funds. There aren't a lot of Vanguard International Funds that I would want either. I do own VMVFX, along with GLFOX and GGSOX which are global funds, and FMIJX is my only truly International fund sans U.S.

You mentioned VMVFX which is a nice global minimum volatility fund with an ER of 0.25%, VWIGX with an ER of 0.32% and that is up over 18% YTD and if your want to index broadly, VFWIX or VGTSX are very good inexpensive funds.

GPEOX = predominantly small-micro (<$5 billion)
RNWOX = all-cap (> $1.5 billion)
May be some, but GP also seeks higher growth than Rondure, supposedly.

For me, the "Sell in May" strategy has worked more times than not. I have never sold competely out of equities but generally sell down certain equity holdings and then redeploy the money somewhere in the equity structure come late summer or early fall that I believe provides good opportunity. During the month of April the barometer indicated certain elements of the S&P 500 Index that the barometer tracks were in decline (going soft). Corporate Earnings was not one of them but both the breath and technical strength indicators indicated some softness was developing. I'm thinking this will soon show up with a decline in the Index's price unless these indicators reverse. This is the big reason I average in and out of the "Sell in May" strategy and don't go all in (or out) based upon the calendar alone. Currently, the barometer indicates that the Index is just barely in fair value territory with a reading of 146 as of Monday's May 1st close; but, extended. I have been in a gradual equity reduction mode since mid March.
My market barometer provides information that assist me in both my exit (Where I reduce my allocation to equities.) and entry back into the market (Where I raise my allocation to equities).
And, so it goes. To each, their own way.
I wish all ... "Good Investing."
Old_Skeet

In terms of the track record....yes, the prospectus traces to privately managed accounts like institutional, pensions, etc. The retail funds represent ~15% of AUM. I'm not seeing the correlation that folks are trying to make from that.
As for this critique..."BTW. 25 years is not a strategy, it is a career". I don't understand what point u are trying to make?

You are correct Junkster, the fund was allowed to use previous track record. I learned of the fund here from Mr. Snowball's fund profile. The first two years were good and the fund was discussed frequently. Not much discussion as of late. I did find it showing up in what are the best worst funds discovered on MFO. BTW. 25 years is not a strategy, it is a career. IMO. Thanks for everyone's comments.

Certainly the last 3 years have been subpar. But Rolfe's selective approach to equities isn't always going to be aligned with the overall market. Their 10 yr return still holds up due to their outperformance in 2009.
You can peruse longer term returns (~25 years) for the overall strategy on the fact sheet posted on their institutional site.
Wedgewood Fact Sheet

You obviously hold the fund and know more than me re. RWGFX and RWGIX. Morningstar shows inception in late 2010. Is the fact sheet performance information then based on the manager's track record before being offered to the public. And isn't that the point. That when an institutional manager with a great track opens a fund to the public........ It looks like it did well the first two years it was open to the public (the new fund effect) and then subpar vs its benchmark. It has made money for sure but isn't this just another example of passive beating active?