@Ted and @MJG, thank you for your posts. This is great information that I've seen before but never spent more than a short while analyzing (shame on me).
Anyway, having done some work to review the data, I find it most interesting that if you'd completely avoided developed international markets (MSCI EAFE) for the last 20 years or the last 10 or 15 years, you would have had a very good chance of doing better with that money almost anywhere else. Considering the demographics and the economic challenges that both the Europeans and the Japanese face, I'm wondering why we should think the next 10 or 20 years will be any different? Would anyone take the chance of an all US/Emerging Markets portfolio (considering just equity)?
Another interesting, but maybe not surprising, tidbit is that small-caps in developed international markets, and I only had data since 2001, were much better performers in the last 13 years and outperformed their large cap EAFE colleagues by far more than small-caps in the US or emerging markets outperformed those markets' large cap indices. So then a follow-up question... if you wouldn't avoid developed international markets totally, would you consider focusing investments in developed international markets on small-caps?

FYI: (Click On Article Title At Top Of Google
It's the investing equivalent of "don't run with scissors": Nearly all advisers agree that trying to time stocks is futile. Naturally, people do it anyway.
Research firm Dalbar earlier this year published 30 years of data on what typical mutual-fund investors earned and the results weren't pretty: An annualized return of 3.69% in stock funds and 0.7% in bond funds. Yet someone fully invested in the S&P 500 over that period would have earned eight times as much as a typical equity-fund investor. Results for bonds were similar.
Regards,
Ted
https://www.google.com/#q=yes,+you+can+time+wsj

FYI: So you have been bitten by the gold bug? Here are six easy ways to add a little gold to any portfolio — and the pros and cons of each. (Sources: GoldResource.net, SeekingAlpha.com, Morningstar Inc. and Kapitall Inc)
Regards,
Ted
1. Mutual Fund
The $70 million Gold Bullion Strategy Investor Fund (QGLDX) is currently the only mutual offering pure-play exposure to the price of gold. Launched 12 months ago, the fund gains exposure to the gold through a 25% allocation to gold futures contracts and a 75% weighting in short-term bonds.
Pros: Liquidity. Also works as an interest rate hedge. No transaction costs.
Cons: Above average expense ratio. Relatively untested strategy.
2. Exchange-Traded Funds
The financial services industry created multiple ways to generate long- or short-exposure to the price of gold. But, keep in mind, whether the various exchange-traded products are offering long or short exposure, they are essentially designed to track the price of gold, as opposed actually owning the precious metal.
Pros: Inexpensive to own and easy to buy, with all-day liquidity. A good vehicle for traders.
Cons:Transaction costs. Most company-sponsored retirement plans still do not offer exchange-traded product
3. Gold bullion
There is no greater commitment to gold investing than direct ownership and possession of gold coins and bullion.
Pros: A sense of security like none other, assuming you have a secure storage facility. The best price you’ll get when buying physical gold.
Cons: There is a mark-up when purchasing bars and ingots, and when selling you might need to hire a professional appraiser. Bullion is also less liquid than coins, and can be difficult to use as an actual currency for smaller purchases.
4. 4. Gold coins
Coins introduce a different level of physical gold ownership because the value is affected by multiple factors, including brand, country of origin, and supply of specific coin brands by location.
Pros: When demand for gold is high, gold coins can sell at a premium to the price of gold. Can be used as currency.
Cons: Easy to purchase, but there is usually a steep convenience upcharge, and the spreads rarely favor smaller investors.
5. Futures and options
Not for the meek or inexperienced investor, trading futures and options is considered among the best ways to make money in gold, assuming you have a solid understanding of how it’s done. It is a strategy best left to the professionals.
Pros: A lot of money can be made without putting up a lot capital, because this is a market designed for speculators.
Cons: You can lose your shirt in a hurry.
6. Gold-mining stocks
A less direct way to gain exposure to the price of gold, mining company stocks generally benefit from rising gold prices, but the correlation can be unpredictable because of other factors driving revenues and profits.
Pros: There is usually dividend income. The stocks can sometimes outperform gold prices.
Cons: Transaction costs for buying and selling the securities. There is always a risk that the company stock prices will move way out of step with the price of gold.

Looking at this chart below, when the fed funds rate moved up from 2.25 in 2004 to 5.25 in 2006, HY Municipals did really well. Shouldn't we see the same behavior this time when the fed funds rate move up?
https://ipro.americancentury.com/content/dam/americancentury/ipro/pdfs/flyer/Periodic_Table.pdf

VTI and VBMFX, just for the heck of it, U.S. centric, buy and hold for the past 15 years = 7.12% annualized.
At the below chart, right click on the "200 day" icon in the slider bar and select "all" for the period back to July, 1999.
Insert tickers (separated by a comma) of your choice, for your own checks.
http://stockcharts.com/freecharts/perf.php?Vti,vbmfx#
Just my own humble opinion, with charting for the fun of it.....; of which, saved our monetary bacon in July of 2008.
Have fun,
Catch

Gah, have we not been over this many times? Think about it unaggregated. Chart GABEX, AMANX, PRBLX, YACKX, and FLPSX against SP500 from August 08 to August 2012. All different outfits and approaches. Pay attention to dip depth and then time to recovery. SP500 is the laggard --- by far.
You can always plead selection bias, 'Well, someone has to outperform'. But the point is that all of the managers of those prudent funds were bruited bigtime well before 2008, well before, some of them for the 20 or more years preceding. I did not get into these funds or recommend them to my wife and parents and children and friends in 2009 or whenever; I did it in 2003, or 1997, or some of them 1990. Based on reading and research and backtesting such as it was possible to do back then. I have no gift for this kind of thing, but these managers certainly do. And I stuck with them except for Gabelli, when I switched all of those holdings over to Ahlsten, based solely on dip protection.
Most of this holds for Danoff/FCNTX too.
So either stick with indexing and all it entails, or do your due diligence and look for active managers who demonstrate smidgens of prudence and foresight and protective behaviors. I (overly diversified like so many here) used to be in D&C, Fairholme, and Weitz also, but over time came to see that they did not show the judgment I valued.

To avoid index funds because of a bear market one would have to find a manger good at market timing .Do they exist? It is my understanding that index funds did ok in 2008. Not by doing well but by outperforming more than half the active funds.

@jerry, looks like you are right. The Vanguard Total Stock Market index fund did outperform more than half the active large blend funds in 2008. As well as every year from 2004-Year to Date.

FYI: A four-day rally for U.S. stocks carried the S&P 500 to a fresh intraday record on Thursday after a series of upbeat economic reports.
Regards,
Ted
http://online.wsj.com/articles/stock-futures-rise-ahead-of-jobs-data-yellen-speech-1408623995#printMode
Markets At A Glance: http://markets.wsj.com/us

Hi Charles,
Congratulations! You are asking the right questions before making a portfolio adjustment decision. Do the candidate funds really provide diversification benefits? If so, how much? What are the opportunity costs? A few numbers might help answer those issues and guide that decision.
Of course, much depends on your targets, both in terms of goal portfolio growth rates and timeframe. Defining the target is a preliminary necessary opening task. As Lucius Annaeus Seneca recorded: “When a man does not know what harbor he is heading for, no wind is the right wind”.
The Portfolio Visualizer website that I referenced earlier offers some nice tools that you might want to exercise to generate a guideline data set.
Just enter your current portfolio mutual fund symbols and the PIMCO All Asset, All Authority Institutional fund symbol (PAUIX) into the correlation coefficient calculator to generally assess any diversification pluses. You might want to test the stability of the correlations by repeating the computation for several timeframes of differing lengths.
I did a few calculations, and as usual, there are tradeoffs to consider. Indeed, Rob Arnott’s PAUIX responds to a different lead drummer. He is a smart active fund manager who is supported by an excellent research staff. These guys are superior number crunchers.
The PAUIX correlation coefficients offer significant diversification. But there is a price for it. Arnott’s approach has delivered reduced returns at higher volatility levels over the last 3 and 5 year periods relative to Balanced mutual funds (DODBX, VWELX, VWINX) during this same timeframe. Only you can judge if the diversification benefit is worth the implied risk.
Another deeper level of analysis is needed to help provide guidance when addressing these tradeoffs. The Monte Carlo option on the Portfolio Visualizer site might be deployed to advantage on this problem.
In this instance, the Visualizer Monte Carlo code can only provide generic trend-lines since it does not do specific mutual funds; it only does its analysis using investment fund categories. But even with that compromise, the tool can be useful in the decision process,
Do a simplified baseline simulation without emerging market or commodities components. Select an appropriate time-span. Next, for several simulations, input different percentages of more complex Emerging Market, Precious Metal, etc, elements.
These calculations will allow you to develop a feeling for the impact of further diversification in terms of a probable end wealth and a minimum portfolio value that measure risk. By adjusting the input portfolio percentages you will experimentally test how much is needed to significantly influence the end game outcomes. These informative sensitivity studies will improve your decision making. Numbers help.
Best Wishes for a Successful Decision.

FYI: The Linkster repeats, S&P 500 to finish up 15% in 2014
Regards,
Ted

I'll be very happy if the Linkster's S&P 500 forecast for end of year comes true.
Ted, if you're right on that, we're going to have to get you onto the Barron's Roundtable and CNBC, to forecast the 2015 outlook for the stock market.

Today, the Federal Reserve released the minutes from the FOMC meeting that concluded July 30. The post-meeting statement, as you may recall, was rather benign and did not indicate much change in the Fed’s thinking. The newly released minutes give us a different view. - See more at: http://investwithanedge.com/newsletter-archives/082014-fed-awaiting-liftoff#sthash.g592Bmjn.dpuf

FYI: The S&P 500 jumped 0.3 percent to a record 1,991.72 at 10:28 a.m. in New York. The Dow Jones Industrial Average gained 73.91 points, or 0.4 percent, to 17,053.04, climbing above 17,000 for the first time since July 29. The Russell 2000 Index slid 0.4 percent for a second day of losses. Trading in S&P 500 companies was 17 percent below the 30-day average for this time of the day. The Linkster repeats, S&P 500 to finish up 15% in 2014
Regards,
Ted
http://www.bloomberg.com/news/print/2014-08-21/u-s-stock-index-futures-rise-with-s-p-500-near-record.html
The 5th Dimension: Up Up And Away
:

As a respondant who wishes to edit more than just text the format buttons are no longer available...here's what I see:

Wondering if the (formatting) buttons can be maintained when a poster wishes to later edit their post and wants to add a link, image, etc.
I find these buttons disappear and the only way for me to accomplish an edit is go into an additional comment box and then cut and paste these "edits" into my original post that I wish to edit.
This doen't happen if I start a post and then wish to edit, only is I am a respondant and then wish to edit.
Here's what the two boxes look like:

Now if I want to come back and edit as a respondant there are no format buttons limiting my editting to text only (spelling errors, etc.)

We have no problem using funds to build income portfolios. Aside from the many bond funds that are well-run and offer acceptable yields (and that are not loaded with long-term junk), there are a number of low-octane, diversified stock funds and what we would call alternative or dynamic allocation funds that fit the bill.
Preferred stocks are a b.... to buy individually, as witnessed by my post to a thread on that topic earlier. While we recognize the overall premium prices for most preferred stocks, KIFYX has done an ok job, and they have actually reduced the dividend to account for lower yields rather than load up the portfolio with holdings that are too risky. It bears watching, however. PAUIX provides a very generous dividend while maintaining a very reasonable risk profile.
Stock funds that seem appropriate include Schwab's SCHF, with a 2.54% yield. Hennessey GASFX comes in at 2.41%. SPDR's SDY is 2.27%. Wasatch WASIX is 2.8%. If MLPs are part of your income strategy, Oppenheimer Steel Path is attractive. Matthews MAPIX has always had a decent dividend, last 12 months has been 2.84%. Federated Intl IVFIX is at 4.71%.
An investor can be as conservative or aggressive as they want and still find decent yield. And it is possible to construct a diversified mix of funds that provide an attractive yield. Of course, one can go the individual stock route. For most folks, however, using ETFs or MFs can be a lot easier. No method is foolproof. One should consider, however, where the underlying positions' gains have been and perhaps weight the mix of portfolio holdings accordingly. Some folks just want to do better than a money market or short-term CD, and there are a lot of options available, but buyer beware in terms of risk they might be buying.

Like her one-time mentor, Dan Fuss, Kathleen Gaffney apparently thinks all of the sweet bond fruit is picked over and the market is ripe for a correction.
As of 6.30.14, EVBAX looks to have 20% cash reserves, about 25% of its assets in non-US bonds (developed/EM), almost 18% in common stocks,12% convertibles, nearly 10% HY and less than 8% investment grade corporate bonds. 0.0% in US government-related bonds.

Good morning John and others,
I sold off three funds, of my fifty two, awhile back and parked the proceeds in cash. Thus far I have only deployed about 25% of these proceeds back into the market. Although, I have done a little buying, thus far, I still have a good amount of cash targeted to go back into the market. Let's see we still have September & October to transverse. Perhaps a good dip, or better, will present itself by then.
A good number of investors hate to see the dips, and pull backs, when they arrive ... but, I take them as opportunity. For if one has rolled out of some stuff they no longer wish to own then the dips, and pull backs, present themselves as buying opportunity to roll back into other more productive areas. I look at some of my positions as crops in the field. If they are not harvested then they stand a good chance to wither.
Old_Skeet

Here is how Morningstar’s Market Valuation is seeing the market … Overbought by about three percent.
http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx
And, here is one trader’s perspective …
The NYSE McClellan Oscillator worked a tiny bit of its near term overbought condition off but is still quite high. Remember, when we are in bull market mode often these overbought conditions are not worked off by any serious selling – instead we get mild down days or small flattish type action.
http://www.stocktradingtogo.com/2014/08/20/sttg-market-recap-august-20-2014/?
And, another trader’s perspective.
The S&P is the index to watch tomorrow. It has reached an inflection point: either it breaks 1,990 or it bounces off it. A bounce off may be nothing more than a delay, particularly if the Nasdaq continues to push higher. Note, technicals for this index are net bullish.
http://www.markets.fallondpicks.com/2014/08/daily-market-commentary-semiconductor.html?
A look at the futures ...
http://finviz.com/futures.ashx
Score me as just looking while I await another good dip (3% to 5%) in the market.
I wish all a grand day … and, most of all … “Good Investing.”
I am … Old_Skeet

@Crash
How about this one?
http://m.asia.wsj.com/articles/asian-borrowers-gaining-upper-hand-in-bond-sales-1406716576?mobile=y

Yup. Excerpt: "Last week alone, $2.6 billion in Asian junk bonds were issued—making it the busiest week for issuance of debt below investment-grade this year, pushing the total so far this year to US$17.8 billion, according to Dealogic, a data provider. Issuers last week included Indian energy company Greenko Group PLC and Chinese developer Modern Land (China) Co.
The surge contrasts with events in the U.S. There, junk bonds have been sold off as investors reconsider following a rally, spurred by rising geopolitical risks and concerns that eventual interest-rate increases by the Federal Reserve could dent the attraction of fixed-income assets."
(Dated 30th July, '14.)