A while back I bought into a income fund that is multi asset in nature. My thinking on this was a place to park money for the short term before it goes into cash instead. For example, if I keep 12 months cash available, I would have 3-5 years in this fund to temper any hiccups in the markets.
Anyone else use a similar strategy? It could be a form of bucket or sleeve investing of sorts.

Seems like a reasonable approach.
Instead of thinking that there might be market hiccups I try to plan on the hiccups happening during my draw down periods. I try to do this by using back testing (historical data). You can explore mutual fund MaxDD and recovery from Max DD here at MFO thanks to Charles' efforts using this tool here.
A website I visit to back test mutual funds is Portfolio Visualizer. I'm attempting to get a close approximation of future "MaXDD" (Maximum Draw Down) of different mutual funds or etfs (cash can be entered as CASHX). This site lets you enter your mutual funds as individual holdings (100%) or as a combination of fund percentages (which also must add up to 100%). When reviewing the results I pay close attention to this feature (which you have to hover over with your cursor to open...located next to the MaxDD results). It looks like this:

At this website:
https://portfoliovisualizer.com/backtest-portfolio
Max DD is expressed in a percentage and recovery time from MaxDD is expressed in a time frame it took the fund to overcome MaxDD (return to profitability for a buy and hold investor).
On a separate note:
I would argue that cash has a Max DD equal to inflation that can be measure in percentage and time. This might be the most misunderstood MaxDD...the buying power of cash. When you get down to it this is what we all are trying to do preserve or increase... buying power.
My portfolio often feels like a balloon that changes in size, but needs to at least overcome the deflationary pressures of inflationary leaks (the buying power of money).

A while back I bought into a income fund that is multi asset in nature. My thinking on this was a place to park money for the short term before it goes into cash instead. For example, if I keep 12 months cash available, I would have 3-5 years in this fund to temper any hiccups in the markets.
Anyone else use a similar strategy? It could be a form of bucket or sleeve investing of sorts.

FYI: Most of us don't worry about taxes when it comes to mutual funds.
We don't need to because we invest in them through a 401(k), IRA or another account designed to delay taxes until after retirement. More than half of all money invested in mutual funds is in tax-deferred accounts. That makes it easy to ignore whether other shareholders in the same fund are getting a big tax bill just because they're holding it in a taxable account.
Even so, it can pay to consider a mutual fund's tax history, regardless of whether your money is in a taxable or tax-deferred account. That's because funds that keep tax bills down tend to have better returns, even before taxes are taken into account.
Regards,
Ted
http://abcnews.go.com/Business/print?id=31217658

FYI: WHEN Ken Kavula of Genesee, Mich., retired from his job as a high school principal at age 53, he decided to defy conventional wisdom and manage his own financial life — including his retirement accounts and a mix of stocks and bonds he had either accumulated on his own or inherited.
Fifteen years later, Mr. Kavula, now 68, has ridden the huge highs and crushing lows of the markets so well that he has enough to live off, for now, without even tapping some accounts.
Regards,
Ted
http://www.nytimes.com/2015/05/23/your-money/the-risks-and-rewards-of-self-managing-investment-portfolios.html

Dex, STHBX a dog of a dog. In the same short term junk arena it is completely outclassed by ASHDX and OSTIX.

I was going to suggest a combination of OSTIX and WHIYX.
ASHDX has a short history from what I have researched.

Bee, I was in (and out) of WHIYX many times over the years. But it has never been the same since they lost their high profile fund manager. Now I am in and much prefer PHYTX. It has been a nice steady performer year in and year out compared to its peers. RIMOX is an interesting junk/bank loan fund. It has been an outperformer since they shook up their management team by adding several new ones. Everyone pretty much hates junk and have been warning of their high risks. But YTD some are up close to 5%.

FWIW, my take on the 9th Circuit ruling, the SC ruling (which only had to do with statutes of limitations, i.e. time limits on claims), and on people's wishful thinking.
The 9th circuit ruled that revenue sharing is generally okay (though it is fact-specific, and can vary from case to case). Revenue sharing is where the mutual funds pay the Plan's administrative service provider (bookkeeper), and the service provider in turn reduces the fees it charges to the Plan Sponsor (employer). Basically, employees paying 12b-1 fees to cover some of the plan's administrative costs, so that the employer pays less.
Without going into the subissues or reasoning, I'll just quote from the 9th Circuit opinion: "Today we have held that the [revenue sharing] practice here did not violate the terms of the Edison Plan or violate ERISA § 406(b)(3) [prohibiting kickbacks]."
The 9th circuit also ruled that for the funds that were added (in 2002) to the plan within ERISA's 6 year statute of limitations, using retail class shares was a breach of fiduciary duty. But not for the reason you think. The reason was not that they were more expensive than institutional class shares, but that the employer had not even bothered to check whether there were cheaper shares available.
Quoting again from that ruling:

The trial evidence ... shows that an experienced investor would have reviewed all available share classes and the relative costs of each when selecting a mutual fund. ... [W]e have little difficulty agreeing with thedistrict court that Edison did not exercise the “care, skill,prudence, and diligence under the circumstances” that ERISA demands in the selection of these retail mutual funds.

As to the SC ruling, it was (based on ERISA being modeled after trust law) that the employer/sponsor has an ongoing duty to monitor the plan offerings. So the 6 year statute of limitations runs not from the original selection of a fund, but from the time it should have last taken a look at the plan offerings. Thus the suit could proceed.
But the SC also said that (a) it had no opinion on what constituted that duty to monitor (it could be a lesser duty than in making the original fund selections), and (b) whether the plaintiffs could even argue this (because they had not argued that the defendants breached a duty to monitor distinct from the duty to carefully select the funds).
All the SC did was remand to the 9th Circuit to figure out whether the plantiffs would be permitted (procedurally) to argue for a breach of monitoring duty, and if so, what that duty was and whether the defendant actually breached it.
With respect to what people are reading into this case - the SC gave no particular reason for hope. Any ruling about share classes or share costs was decided in the trial court, affirmed in the circuit court, and not appealed to the SC. There's no open issue here on which to be hoping for anything better than was already decided.

Dex: Checking/int $753. How do you manage this?
Derf

I've been posting a lot about budgeting, near cash, and cash flow.
Here is my current cash flow calculation for this year as of today's date.
Budget (28,500)
Cash Back 243 - credit cards
checking/Int 753
STHBX 16,449
Money Market 1,700
Pension 8,058
Spent 12,494 - this the amount spent to date
Total 11,197 - this is the amount remaining of STHBX I estimate I will have at year end.
I could show you future years but basically it is a adding in dividends and reducing STHBX until SS begins.
This is the first year that the pension kicked in.
Get back to basics with your planning. But, as I said before, the younger a person, the less likely they will be able to have a comfortable retirement.

Thank you MJG and msf for the time and thought you put into your replies. I was unclear with the article in regard to the word fee/fees . I thought Mr. Evensky was trying to focus the writer on the 15-20% improvement on the portfolio return net of portfolio fees , taxes, and inflation. If a were a client , I would be considering my total return ( risk adjusted as Mr. Evensky advises ) which would include Mr. Evensky's approximate 1.33% fee, all in, as given by the writer. I was thinking, as I read , that the word fees as used by Mr. Evensky meant portfolio expense ratios/transaction costs but did not include his and Mr. Katz's 1.33% fee.

You have substantially increased your payday before taxes

Some adjustments to the calculations above:
- Evensky is talking about real (inflation adjusted) returns after taxes as well as after expenses
- The typical (dollar-weighted average) cost of investments is closer to 1.0% than to 1.5% (from memory, cite corrections as appropriate)
- Evensky is suggesting just a 0.5% absolute improvement in ER + taxes
The general concept is right - that he's referring to relative improvement. That is, 0.5% could be as much as 15%-20% of the net, real, after-tax return. But all the figures, numerator (0.5%) and denominator (current net return) are smaller.
I haven't yet delved too deeply into the following article from Thornburg, but if you're interested in getting a sense of "real" real returns (i.e. returns net of expenses, taxes, and inflation), and trying out your own numbers, here's an historical analysis on different asset classes.
FWIW, Thornburg uses 0.50% as its estimate for average expenses, so if you like my figure (1.0%) or MJG's (1.5%), subtract off 0.5% or 1.0% from the stated average returns.
http://www.thornburginvestments.com/pdfs/th1401.pdf

Hi Morningstars,
Costs matter even more when portfolio expectations are lowered. Bogle has been playing this song for decades. Here' an example.
Suppose a balanced portfolio expects a market return of 7.5% with expenses at 1.5 %. Your return is 6.0%.
An option is to go the low cost route so that the return is the same, but costs are only 0.5%. Your take home payoff is now 7.0%.
You have substantially increased your payday before taxes. Like 7.0/6.0 or roughly 1.167 or 17%.
It's important to consider stats in both an absolute and a relative framework.
I hope this helps.
Best Regards.

Thanks for this and all articles, Ted. Guess I'm a little cranky this beautiful morn but not sure about owning low cost, broad based ETF's and then losing the savings to add on advisory fees. I do know Mr. Evensky gives a lot of interviews and makes a lot of appearances. Would like to see the math involved in the 15%-20% improvement in performance.

FYI: (This is a follow-up article)
3 ways Tibble vs. Edison International could change retirement savings.
The U.S. Supreme Court prescribed some fixes to the retirement-savings world this week, but the long-term side effects could have some workers thinking they’ve been given bad medicine.
Regards,
Ted
http://www.marketwatch.com/story/what-the-supreme-courts-fixes-for-retirement-savings-may-do-to-your-401k-2015-05-22/print

FYI: Need ideas for the choppy waters ahead? Harold Evensky, chairman of wealth-management shop Evensky & Katz in Coral Gables, Fla., says the answer is minimizing fees and reducing costly taxes. Evensky manages $1.6 billion in assets, with the ­median client holding $2.5 million, and insists that even very wealthy clients should load up on cheap exchange-traded funds. “We would love to market-time, but we conclude nobody has done that well,” says the 30-year veteran of the financial planning business. “So we figured if we could save half a percentage point on taxes and expenses, we could improve performance, net of fees, taxes, and inflation, by maybe 15% to 20%” a year.
Regards,
Ted
http://blogs.barrons.com/penta/2015/05/22/9-top-investment-ideas-for-wealthy-investors/tab/print/

I recently sold MOAT after holding it for more than two years. Made decent money, but didn't like it piling into energy at the last reconfiguration. I already had an energy play, so MOAT became redundant. For most of the fund's history it has outperformed the S&P 500, but not so in the last few months.

@Dex got me thinking about what he called "near cash". I interpret this "near cash" as the portion of my portfolio that is available to supplement yearly income and the occasional emergency. @Dex mentioned this amount should help bridge a four year time frame. Many MFOers ( @MJG and @davidmoran) admitted to not maintaining anywhere near four years of "near cash".
So where does one turn to secure a (2% - 4% return with little of no downside risk) that can weather market shocks, interest rates rising (inflation), and yet perform well if de-leveraging pressure persist (deflation)?

The length of time is determined by your risk tolerance and individual cash flow.
The downside risk evaluation is relative to your other investments. The point of the 'near cash' is so if your other investments take a hit - you don't have to sell them and take a big loss.
So, for an extreme example, if your other investment are vulnerable to a 50% hit your 'near cash' taking a 5+% hit at the same time would help to protect your portfolio survive.

Dan Fuss who was managing bonds during the 70's and 80's has mentioned the importance of laddering bonds. Not sure if this is best accomplished in a bond fund or by buying individual bonds.
Fireside chat with Dan Fuss:
Dan Fuss with Jim Sarni

I just saw a piece on CNBC with Wes Gray, who runs this fund and thought it worth some discussion. Here's more detail about the fund based on an interview Sam Lee did with the guy last November
news.morningstar.com/articlenet/article.aspx?id=674561
morningstar.com/etfs/BATS/QVAL/quote.html
The symbol is QVAL. Does anyone have any experience with this fund in it's short history? Any thoughts about the approach? I was thinking about whether this is a good defensive play, so buy it before there's a correction or before the Fed raises rates, or because it's the "trash that everyone hates" (Gray's term from the CNBC interview) it's better to wait and see how it does during a correction or increasing rates and maybe think about buying the trash when someone starts to burn it? (When I was young we had an incinerator in the house and burned all our paper trash. Do those exist anymore?)
Thanks for your thoughts!

VBMFX which is categorized as an intermediate corporate fund has an incredibly smooth 30 year chart. Will the next 30 be as smooth?
This search has lead me to also appreciate Vanguard's Mortgage Back Security fund, VFIIX. VBMFX is presently overweight MBS securities:
Article:
The Ultra-Safe Vanguard gnma Fund
Other category funds:
BGNMX
FGMNX
PRGMX
IGMWX
VFIIX
Charted over the last 30 yrs: