FYI: The six year bull run in U.S. stocks has caused some value funds to stash some of their portfolios in cash.
While this has crimped their short-term performance, the funds’ long-term results remain robust. Such good long-term performance should inspire confidence in the managers, given the current market conditions.
Regards,
Ted
http://www.marketwatch.com/story/5-stock-funds-youll-want-to-own-in-the-next-bear-market-2015-04-27/print

If you’re not already paying attention to China, you should start now.
So far this year, Dow Jones and S&P 500 have continued their run, and kept US investors comfortable with domestic equity markets. In sticking with what they know, investors have overlooked many of the biggest storylines from the past 12 months. China is one of those stories.
Once considered a highly volatile and generally undesirable emerging market due to excessive government intervention and lack of transparency, Chinese equities have recently gone on a tear. Given the country’s consistent growth rate, emerging middle class, and aggressive global expansion, it has become clear that China is a real investment opportunity that might have finally graduated into a “must own” for many diversified investors.
http://www.forbes.com/sites/duncanrolph/2015/04/27/chinese-equity-markets-bubble-or-beast/print/

FYI: If you have criticisms of the Morningstar style box, you're not alone.
Morningstar Inc. does, too.
Regards,
Ted
http://www.investmentnews.com/article/20150427/FREE/150429922?template=printart

FYI: Investors that take a natural interest in the art of investing prefer to dedicate their time to being well-informed of new cutting edge investment themes, emerging trends, and economic prospects. But what about the retirement investor that doesn't have the predisposition for spending hours in front of a computer screen, researching and debating these important issues?
Regards,
Ted
http://www.marketwatch.com/story/the-one-fund-lazy-retirement-income-portfolio-2015-04-28/print
M* Snapshot Of VWIAX: http://www.morningstar.com/funds/XNAS/VWIAX/quote.html
Lipper Snapshot Of VWIAX: http://www.marketwatch.com/investing/fund/vwiax
VWIAX /VWINX Is Ranked #4 In The (CA) Funds Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/conservative-allocation/vanguard-wellesley®-income-fund/vwinx

Total Stock market up 4%+ in 4 months (2015), and your worrying about Animals Dying?
Enjoy the money....

Thanks Dex. Very instructive. Wonder how long you've operated on this budget?

I own my home (no mortgage), truck and travel trailer, single (no debt). I retired in '07 at 51 and since then I averaged $27,000 in spending - that includes health ins and taxes. I'm estimating I will spend an average of $38,000 (includes $30,000 for a new truck) from '16-25.
I did a line item budget for this period. After '25 I grow expenses at 4%

I think we are very similar. I broke it down into basic and incremental. Basic, is just staying home and incremental is travel and discretionary.

Check out the photo of a 78 year old who is in great shape:
theguardian.com/science/2015/jan/11/-sp-live-forever-extend-life-calico-google-longevity

I do concur that a fund of funds investment, if you have one, is best started in a retirement account. I was not aware that a fund of funds cannot pass along losses to the investor. That pretty much nails using the IRA, Roth IRA or 401k.

At best, the Wiki statement that "A fund of fund ... cannot use [capital] losses" is extremely misleading, at worst, flat out wrong.
Any registered investment company (whether fund of funds or fund of individual securities) cannot distribute capital losses. But it is allowed to carry losses forward to later years, where it may use those losses to offset gains. If memory serves, funds are only allowed to carry forward losses ten years, as opposed to individual taxpayers who can carry forward cap losses indefinitely.
Nothing special about fund of funds here.
In fact, the boggleheads Wiki says just this: Vanguard's Target Retirement Funds' ''rebalancing can result in the realization of capital losses and the creation of tax loss carryforwards in the funds. The existence of loss carryforwards has historically resulted in minimal long-term capital gains distributions."
Vanguard Target Retirement Funds (2005-2025) tax distributions (boggleheads)
So whom do you care to believe: the boggleheads' Wiki, or the boggleheads' Wiki?

Hi bee,
I have linked the fund’s fact sheet below. If you look under asset allocation you will find a scale for the S&P 500 Index and under this scale is the reading ranges that it adjust it’s asset allocation. It does not consider interest rate risk in this model but does with respect to what type of bond funds it holds.
https://www.columbiathreadneedleus.com/content/columbia/pdf/LIT_DOC_3C97987F.PDF
Old_Skeet

Only a handful of people working for my employer are over the age of 55. But I've learned that there is always an option!
Nobody on this board is aware of this fact, but I was born and spent my first 12 years of life living in Bangkok, Thailand as my father was the S.E. Asia GM for a large multinational and was based in Bangkok . I speak, read and write fluent Thai, which my parents say I learned before I learned English. My Mandarin isn't bad either, although I haven't used it for over 10 years... @JohnChisum ~ I reckon that you live in Manila? Been there many times and always enjoyed the musical abilities of the Pinoys, as well as their penchant for having fun!
Retirement for this young PopTart is a few decades off, but my wife and I reckon that we could retire to Thailand (probably Chiang Mai as Bangkok is a more expensive city) and enjoy the same quality of life (if not better) as in the USA for a much cheaper cost. Foreigners aren't allowed to own property in Thailand, but condos are available for purchase (after alot of haggling of course!). My wife and I figure on roughly $1000/mo. in expenses as we live cheaply. But nobody really knows what costs will be like 18+ years from now...
Will we actually retire to Chiang Mai? As I mentioned earlier, retirement is still a long ways off as we're raising two young children and have 18 years before we could obtain a Thai "retirement" visa at the age of 50. It's a dream for now, but retiring overseas, especially to a cheaper country which one knows well and likes, is an option to the bygone era of the "American dream".
Peace.

Hi Guys,
Wow!
When I first started thinking in terms of an early retirement, I was approaching 60. Thinking and planning for a mid-50s retirement was never in my playbook. Congratulations if you want and can execute that major league feat.
Every case is highly personal, and therefore singularly different.
In my case, my earning and saving career only started after completing graduate school and doing some military service. I was 30 before mustering out of the Army. At that time, my wife and I packed our entire belongings in an old Chevy and headed for California with the back seat still partially empty. No way could we manage retirement in just a little North of 20 years.
But that’s our story, and I’m sure each of you have your own compelling versions. For you younger folks, retirement will be a life changing event, and warrants careful and painful study before a decision is made. I say painful because of the many component uncertainties that feed that decision process.
One tool that addresses some of these uncertainties is Monte Carlo simulators. Monte Carlo analyses were specifically designed to assess risk probabilities under uncertain environments. During World War II, they played a significant role in the development of nuclear weapons. Within the last 2 decades, Monte Carlo simulations have been developed to facilitate retirement planning. These simulators are now readily accessible for all to exploit.
All the large mutual fund outfits offer this tool: Vanguard, Fidelity, T Rowe Price and others provide versions of differing complexity and differing input requirements. They all do yeomen work. I suggest you do a web search using Monte Carlo retirement planning as key words. You can choose your own poison from a long list of options.
One of my favorites is found at the MoneyChimp site. It is certainly not the most eloquent nor is it the most comprehensive option. But it is likely the easiest to input with instantaneous outputs from 1000 randomly selected cases. Here is the Link:
http://www.moneychimp.com/articles/volatility/montecarlo.htm
One of the benefits from these simulators is that what-if scenarios are quickly input and evaluated. Portfolio survival probabilities as a function of retirement time is the graphic output.
Test how significant the anticipated retirement length is to the portfolio survival likelihoods. Check out sensitivity to savings rate. Examine the survival impacts of guesstimated portfolio annual returns and their volatility by inputting various levels for each parameter. All of these sensitivity studies can be completed in quick time.
All Monte Carlo analyses only output probabilities. They don’t predict the future. That’s the nature of future uncertainties. But they provide the user with a feeling for the robustness of his plans and provide guidelines for more attractive options. Please give this working tool a try.
By the way, Monte Carlo simulators might also help retirees to make better informed portfolio asset allocation and drawdown decisions. None of this is perfect, but in the investment universe, nothing is ever perfect.
Best Wishes for wise decision making.

I think you mean well Dex but I can't help but wonder how that mindset would have worked coming out of Black Tuesday (Great Depression), Black Monday (crash of 1987) the last Great Recession or any number of hard times. Truly some will give up at anything but the majority will push through and find solutions.

Please go back and read my post. Those incidents do not have anything to do with what I wrote and do not apply. It has nothing to do with the stock market but trends and economics.
Also, one post can not include the all the reasons. For, example, I left out most have little or no savings, the middle class shrinking since the '70s and wages flat since the '70s, employer provided health benefits reduced or eliminated, defined pension plan gone, little in 401K, social security will be pushed out further, older workers (55+) eliminated by companies because they make too much, companies don't like to hire older workers, VAT will be instituted to help with the debt (and Obamacare).
In short the conditions that have allowed a comfortable retirement are gone for most and new challenges will make it even less likely.
Add it all up and my conclusion is valid.
I think you mean well for your children, prepare them for the future - not the past.

It is a shame that you didn't enjoy your younger years. I try not to tell myself, "just wait until retirement", but I do try to make the most of the present.

OK, maybe I exaggerated a tad. But my 20s did suck. I was a lost and aimless person that lived in abject poverty. But the 1980s were among my best living in the Sierras with sunny days almost 365 days a year. Still, I was the poster boy for "not living in the present" since all I did was focus on the future and retirement. I am just thankful and very blessed that mindset worked so that now I can enjoy the "precious present" as much as I do.

@Old_Skeet introduce me to this fund years ago and I liked the name so I occasionally "check" this fund's "temperature" every now and then. The fund uses a fund of fund approach holding other Columbia funds in various percentages. M* reports its holding as of 2/28/15 as:

I'd like to understand it's present strategy a little better so I thought maybe others could shed some light on its portfolio management strategy. It presently is holding roughly 85% bonds and 4% cash.
Fund Mojo describe the fund this way:
"Columbia Thermostat Z Fund normally allocates at least 95% of net assets among a selected group of stock and bond mutual funds according to the current level of the S&P 500 Stock Index in relation to predetermined ranges set by the investment adviser."
Columbia Fund's Website explain the fund this way:

The fund doesn't seem very interested in the "heat" (of the S&P 500 Stock Index) right now.

That Driehaus paper is excellent. I was interested to see what fund portfolio moves managers are making to try to accommodate reduced liquidity (in addition to or instead of what David Sherman talks about), and found this in the paper:
"Here’s what we’ve done over the past several years to address our concerns about declining market liquidity:
• We continue to hold high cash balances, typically 8% to 20% of AUM, in all of our portfolios.
• When we initiate new positions in the portfolios, we’ve reduced the percentage of a bond issue that we are willing to hold. A year or two ago, we were comfortable holding up to 15% of any bond issue. Now, we prefer not to hold more than 10% of any given issue.
• We model 2-10 points of additional downside in our bear case scenarios ....
• If a bond is a large component of a major etf, we require additional risk premium to own the bond ....
• We are quicker to recognize and hedge downside volatility when liquidity declines, as compared to prior years.
• We consider equity as an investment option in the capital structure more frequently than in the past.
• Finally, we have soft closed strategies well below fund capacities to alleviate liquidity-related stress on existing positions."
The level of perceived risk would seem to depend to some degree on the macro outlook, i.e., a rates-takeoff vs. a lower-for-longer view.

Standard and Poors just downgraded Puerto Rico to CCC+ with negative outlook.
http://www.cnbc.com/id/102573741

@carminusa: I not clear if your already are invest in Wellington, but here are some Moderate-Allocation Funds suggested by M* If I were you I'd stick with VWELX, 8% + returns for over 86 years.
Regards,
Ted
M* 5 of Our Favorite Moderate-Allocation Funds:
http://news.morningstar.com/articlenet/article.aspx?id=693877

Unfortunately, the fund closed April 22, 2015 per the link:
http://www.bizjournals.com/birmingham/news/2015/04/23/vulcan-value-partners-names-new-president-closes.html

Thanks for sharing David.
Here is a post from Baird along the same lines (from February).
http://www.bairdfunds.com/news/changes-to-bond-markets-create-liquidity-concerns-and-systematic-issures-bond-investors-should-consider
Edit: Driehaus shared concerns about "The Evolving Liquidity Crisis in the Bond Market" in their February commentary of LCMAX
http://driehauscapitalmanagement.com/pdf/funds/summaries/lcmax-summary-22815.pdf

FYI: The Federal Reserve seems unlikely to give stock investors reason to finally show some trading conviction when it meets this week.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2015/04/27/morning-moneybeat-why-the-fomc-could-keep-markets-rangebound/tab/print/
Current Futures:
http://finviz.com/futures.ashx