@Old_Joe: I wish I could say I have a majic formula for successful investing, but that would be dishonest. Generally speaking, I'm, a very aggressive investor and am always looking for investments opportunities especially when there is blood in the water, ie.; investments no one else wants. Two examples are EIX Preferred Stock who's dividend was suspended for eight quarters the share price dropped below ten dollars,(par $25) and GMAC Bonds that no one expect Marty Whitman and a few other were buying at 40 cents on the dollar.
Investing is not a one sided game, never make an investment with the idea of not losing money, invest to make money even though there at times when that will not happen. You cannot walk away from risk, if you can't stand the heat, volatility, don't invest in the first place. If you make a mistake, cut your losses, never get emotionally attached to any investment. Always, run with you winners, Big Mo, two examples NI bought at $8.40
a share and still holding, PFF bought at $16.00 and still holding.
I don't believe in owning too many stocks or mutual funds. You can attain success with the motto 'few is better". Never invest in something you know nothing about.
Regards,
Ted

One ... QRAAX, which is probably a 5 alarm fund :)
I own it and like it going forward. (Please don't ask me to explain why.) My biggest concern is that at now under $100 mil in assets, Oppenheimer might shut it down or merge it into something else before commodities enter their next bull market. It's so hard to run against the current now days.

Hey there Ted-
I got to thinking about you while in the shower this morning (no, not that way!), as I was mentally reviewing your general style with respect to market investing. To the best of my recent recollection at least, my impression is that you tend to be nearly fully invested, aggressively so if you don't mind, and pretty optimistic with respect to the market potential as a whole. And that perspective seems to be working just fine for you.
The reason that I happened to single you out, in addition to your perspective, is that we are pretty close in age- only a couple of years apart, if I remember correctly. Also, I can't ever recall you being at all negative about staying fully invested. So that led me to wondering...
Would you describe your approach as perhaps a "modified buy-and-hold", in the respect that while you may from time-to-time sell some stuff and replace it with other stuff, by and large you are always pretty much fully invested? How exactly do you see your market approach?
Taking that question a little further, I would think that such an approach could be very rewarding over a long time-frame of investing, such as someone in their 30s/50s might be looking at. But at our age, with the markets "scheduled" to take a significant dive "sometime" in the future (who knows when?) is that a good position, given that we are getting up there and that the next major market down/up cycle could take 4,5, or 6 years to play out?
I'd be very curious to know if in your lifetime of experience you have ever attempted to "get out" before something really bad happened, or have you just let the thing roll no matter what?
I hope that you don't interpret this as being too personal- I'm always trying to learn, and you can only do that by listening to folks with ideas and experiences different that one's own.
Regards- OJ

FYI: Stocks rose, with the Dow Jones Industrial Average moving into record territory, as investors were reassured by the prospect of low interest rates for a while longer.
Regards,
Ted
http://online.wsj.com/articles/u-s-stock-futures-pause-ahead-of-fed-decision-1410956625#printMode
http://markets.wsj.com/us

FYI: Oaktree Capital Group LLC (OAK), the world’s biggest distressed-debt firm, is starting its first in-house mutual funds as it joins the largest private-fund managers in raising money from individual investors.
The Los Angeles-based firm filed today with the U.S. Securities and Exchange Commission to sell shares in the Oaktree High Yield Bond Fund and the Oaktree Emerging Markets Equity Fund. The minimum initial investment in each would be $25,000, according to the filing.
Regards,
Ted
http://www.bloomberg.com/news/print/2014-09-15/oaktree-to-start-first-mutual-funds-to-woo-individuals.html

FYI: One index that has done very well over the last couple of months is the Dow Jones Transportation Index. As shown below, while the Dow Jones Industrial Average has yet to make a new high, the Dow Transports index has broken out nicely. In fact, the Dow Transports index is up nearly 17% year-to-date, which is 13 percentage points more than the Dow Industrial's minimal YTD gain of 3.46%. Many investors look for the Transports to lead the way, and the fact that it has done so well is a bullish sign for the major indices like the Dow and S&P 500 in our view.
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/9/17/dow-theory-still-bullish.html?printerFriendly=true

@JohnN: Sorry John, but I linked this article at 5:00 AM this morning, but don't stop, keep on linking.
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/15730/bill-gross-used-45-billion-derivatives-to-lift-gain#latest

Is it the Fed or is it a hyper financial media over speculating and creating hysteria? You decide.
http://www.cnbc.com/id/102005319

Vanguard Total Stock Market (VTSMX) and other broad market averages are putting in extremely high showings relative to other mutual funds for the year-to-date. What might be the reason for this, and what might this portend?
Your thoughts appreciated.

I do think it is remarkable how the broad market indexes, the Total Market Index and the S&P 500, are beating the pants off the vast majority of actively managed funds.
I certainly don't have all the answers to this, but one issue is that small cap stocks are doing terribly this year, and the 2 indexes mentioned above are cap weighted......so they are invested in the large cap stocks that are outperforming, and underweighted in the small cap stocks that are underperforming.
That certainly is not the whole of it. Hank mentioned the cash balances of active funds, but that is more by choice. There are many active funds that have almost no cash. You don't have to have much cash sitting around for redemptions....you could just sell as redemptions come in. But a lot of funds have elected to hold larger than normal cash balances, some as a risk-reduction measure.
I guess a large part of it is expenses......the Vanguard Total Market Index ETF has a .05% expense ratio...as do the Admiral Share class of the mutual fund, which has a 10K minimum purchase. I guess if the market is up 9% and you have a 1.0%-1.25% expense ratio, and brokerage fees on top of that, some losses due to bid-ask spread and "market action" from your purchases [your buying makes the price go up, your selling makes the price go down], you can't compete.
Another reason may be the zero-sum game aspect of it all. If an active fund outperforms the index, some other guy has to underperform. The successful buyer on one end of the trade has an unsuccessful seller on the other end, and vice versa.
I agree with you, the index funds are trouncing the actively managed funds, and there may be some other reasons not given so far. I'd like to know too.

I'm glad Charles went first. Knows a lot more than I do.
On point 1, I'm hoping we're seeing what's known as a "consolidation" stage, and that after a certain period of months stocks will continue higher. I've no scientific or other data to support this. But, where are we without hope? :)
On point 2, it seems to me like there are long stretches (years or even decades) when indexes outperform, and also long stretches when the opposite is true. I think it is partially due to investor psychology and money flows into and out of both categories - but can't nail it down for you in an intelligible way.
A 3rd point is that stock indexes will (almost by definition) outperform the aggregate of actively managed funds over very long stretches. That's baked in the cake. Not just the lower fees, but remember that managed funds are rarely 100% in equities like an index is. They have to hold some cash to facilitate inflows and redemptions. Unless it's a highly aggressive fund, it's also probably holding a significant "cushion" in fixed income for unexpected contingencies (5-15% is not uncommon).

Markets’ Rose-Tinted World Commentary from MOHAMED A. EL-ERIAN
PLENTY of UNCERTAINTY
"This is a rather weighty list of questions. Yet financial-market participants have largely bypassed them, brushing aside today’s major risks and ignoring the potential volatility that they imply. Instead, financial investors have trusted in the steadfast support of central banks, confident that the monetary authorities will eventually succeed in transforming policy-induced growth into genuine growth. And, of course, they have benefited considerably from the deployment of corporate cash.
In the next few months, the buoyant optimism pervading financial markets may prove to be justified. Unfortunately, it is more likely that investors’ outlook is excessively rosy".
Read more at http://www.project-syndicate.org/commentary/mohamed-a--el-erian-asks-why-investors-are-overlooking-six-major-sources-of-global-uncertainty#qor2xgIp358RJKSw.99
Also:
Policy: Economy
New HUD chief: Mortgage credit too tight
By Joseph Lawler | September 16, 2014 | 4:55 pm
"A few years ago, bad loans and risky secondary market products prompted a housing crisis. There was plenty of blame to go around. Some believe it was too easy to get a home loan. Today it’s too hard," Castro said at a housing event hosted by the Bipartisan Policy Center Tuesday. "The pendulum has swung too far in the other direction," Castro added.
http://washingtonexaminer.com/new-hud-chief-mortgage-credit-too-tight/article/2553496?custom_click=rss

Hi again dryflower.
Hmmm.
I hear all the correction talk. And, maybe it will happen.
But I remain cautiously optimistic that things are continuing to improve, though I recognize stupid things can always set us back.
Mostly institutions drive the market.
And, if you are an institutional investor, do you really want to sell some top SP500 companies that may be healthier and perhaps better run than ever?
Do you really want to sell XOM, GE, BRK, AAPL, AA, BAC, DIS...?
To buy what?
Not so, obviously, with companies like SHLD (ouch).
Hard to see better investment options currently.
So, maybe that helps explain lack of volatility. Things are "fairly" priced. Economy continues to improve. Unless something dumb happens. Accommodative fed.
Translate: Let it ride.
I do not think it is apathy. Lots of folks still sensitive to another big drawdown.
On your 2nd point.
I think many funds today evolved during the 2008/9 crisis. All asset. Absolute return. All authority.
And all those funds, and even simple balanced funds, are struggling.
It's a bull market. And when that happens, all hedge strategies lag.
My 2 cents.
Hope all is well.
c

Mike, was looking the other night at what's available at Scottrade among the top funds in that category. Ever since its recent inception, LSFYX has pretty much led the pack here. I've even been in that one once or twice so if push comes to shove and there is no place to hide in Bondland may hang out there. Then again, (and might post on this tomorrow) I've been looking at the relation of Fed funds to money market funds rates. There seems to be a consensus that Fed funds will begin a gradual, albeit sustained rise to the 3.25 to 3.75 range by the end of 2016. A lot of seniors, including me, would jump for joy at what that would to money market fund rates. Give me 2% to 3%+ in a money market fund and......

Hey guys, sorry for the delayed response. I've been out of town. Thanks again (especially to msf and mrdarcey for the great answers! I just have a theory that the funds that don't participate (TF) will do a better over time than the funds that do participate (NTF) as far as performance goes. Yes, lower fees is part of it but I also think there is a higher level of shareholder care with the TF guys. I found it interest that many funds, like Primecap/Mairs and Power are $50 at Fidelity vs Dodge and Cox/Vanguard at $75. I looked at the "other expense" for both and assumed that Prime and Mairs may share more of the expense and, as a result, the client doesn't have to the $75.

Of these, I have
SGENX (load-waived through Schwab): Very consistent performer, 1/3/5/10/20year average returns all range in 8.95-11.61% per year.
WASYX - small amount in an old ROTH
FMILX looks interesting -- somehow I had never come across it and considered for investing.

FYI: I like Market Senario #3:
This middle scenario at 13.6%, so by Worth’s experience the least likely, suggests the market zig zags higher from current levels.
The S&P 500 rises to a new high of around 2050, or about 2.8% above current levels, by the end of the month. Then after some range trading in October, the index rallies to about 2100 in November before dipping to about 2075 in mid December. The index then powers higher the last two weeks of the month to end the year around 2150, for a yearly gain of 16%.
Regards,
Ted
http://www.marketwatch.com/story/the-smart-money-says-buy-stocks-but-not-till-november-2014-09-16/print

FYI: The aging bull market, now nearly 5½ years old, is seemingly unstoppable. It has survived a flash crash, budgetary brouhahas, the threat of war in eastern Europe, hostilities in the Middle East, tepid earnings growth and, last but certainly not least, one of the most feeble economic recoveries ever. What's more, stock prices have continued to march upward despite signs that the Federal Reserve is moving closer to the day when it begins to raise short-term interest rates, after keeping them near zero since 2008.
Focus on investing
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So, for funds that own stocks, the past year was terrific. Every category tracked by Morningstar save one (funds that invest in Latin American stocks) delivered double-digit returns. Among U.S. stock fund categories, returns fell in a narrow range. The top group, funds that focus on large, fast-growing companies, gained 26.2%, on average through June 30.
Looking ahead, all eyes will be on central bankers around the globe. The availability of cheap money nearly everywhere has been the single most important driver of rising stock prices. It has given companies the wherewithal to buy back shares, purchase other firms and pay dividends. And it has forced investors out of bonds and cash and into stocks in search of better returns.
The Fed is on schedule to end its bond-buying program by the end of 2014, and it has indicated that it may start raising short-term rates next year. However, there's always a chance that the Fed might accelerate its timetable if the economy proves stronger than people expect. The creation of 288,000 new jobs in June suggests that the economy is gaining steam after a miserable first quarter. Earlier-than-anticipated rate hikes could unsettle the stock market.
We show here the top-performing mutual funds over various periods in five categories. The list includes only funds with modest minimum investment requirements and excludes leveraged index funds
Regards,
Ted
Large-Cap Funds:
https://www.fidelity.com/insights/investing-ideas/kiplinger-mutual-fund-rankings-2014-large-cap
Mid-Cap Funds:
https://www.fidelity.com/insights/investing-ideas/kiplinger-mutual-fund-rankings-2014-midsize-company
Small-Cap Funds:
https://www.fidelity.com/insights/investing-ideas/kiplinger-mutual-fund-rankings-2014-small-company
Global Stocks Funds;
https://www.fidelity.com/insights/investing-ideas/kiplinger-mutual-fund-rankings-2014-global-stock-funds
Sector Funds;
https://www.fidelity.com/insights/investing-ideas/kiplinger-mutual-fund-rankings-2014-sector

Richard Bernstein of Richard Bernstein Advisors looks at the yield relationships between stocks and various fixed-income investments and concludes that high-yield municipal bonds look like the only bonds around that are currently attractive compared to stocks.
http://blogs.barrons.com/incomeinvesting/2014/09/15/high-yield-munis-are-only-bonds-that-stack-up-to-stocks-bernstein/

Hi Guys,
Everyone who knows anything about how a military organization works knows that although the senior officer is in total change, the unit only functions effectively when it has a seasoned sergeant directing the foot soldiers.
In a household, the husband is the senior officer equivalent; the lady of the house is the top sergeant. That distribution of duties is what makes the household a success.
I have the greatest admiration for Stephanie Mucha. She is surely a pervasive force like the female is in most family units. Females are a major factor in what makes the USA the world leader in whatever category or statistic is used as a measuring gauge. We fully use, trust, and perhaps even exploit, our not so secret weapon.
It is an enigma why other countries, and some religions, don’t recognize womanhoods many fine attributes, and consequently saddle themselves almost routinely to the poorest tier of Nations.
All the Islamic world is hindered by the way they underutilize and mistreat their female populations. How can you expect to be prosperous when you systematically discard half the productivity of the population? It never works. When will they ever learn, oh when will they ever learn?
Although anecdotal, I can speak with authority on this subject. I have been married to the same woman for over 53 years. I freely acknowledge that any success our family has enjoyed can be directly traced to her steady hand, her strong back, her intelligence, and her persistent willpower. Like a good sergeant, she makes sure things happen.
After completing military service, we drove across the Country in an old Chevy, carrying all our limited worldly goods in a foot locker and on the rear seat of the car. Today, I’m just a little embarrassed by our riches in many dimensions. My wife was and is the motivating power.
One secret of our survival is that we talk and listen to each other. When she says something, I listen; when I say something, she listens. It’s that simple respect for one another.
“Viva la” womanhood. I salute you all.
Best wishes to all, but in this posting, a special very best wishes to all MFO’s female Board members. By the way, the record shows that you guys outdistance the men in the investment arena. Congratulations. I’m not surprised.