Hi rjb112,
Thank you for your discerning and kind commentary.
Indeed, the duration and magnitude of both Bull and Bear markets depend upon definitions. The simple plus or minus 20% rule is very common and is the one that I used in my post. In that rule, the 20% is measured from either the high or low water marks immediately before the reversal.
Your astute comments are more market secular cycle in character. They are based on penetrating these previous high or low records. Since the two most recent Bear slides both exceeded -40%, the 20% reversals were only partial by the secular definition, and obviously produced a different duration measurement. Nothing wrong with any of this record keeping as long as we are all familiar with the operative ground-rules.
Cash reserves are costly since they automatically tradeoff investment opportunity for mental comfort. How far we each commit to that tradeoff is a personal balancing matter. Some financial wags are satisfied with a 6 month reserve. I am not so sanguine. That’s why I proposed the one to two year cash reserve. In the end, it’s your decision.
My own decision is that a reserve that covers all potential outliers, that is really deep into protecting against Black Swan events, is far too costly. I’m mentally prepared to accept some low probability cash flow shortfalls so that I can capture more of the higher likelihood investment opportunity paydays. Again the tradeoff is in your camp.
I consider some retirement income as a dead certainty; Social Security and corporate retirement commitments are in that category. Many financial planners recommend assessing these sources as guaranteed fixed income. For many retirees, these constant cash inflows represent a high fraction of the retiree’s daily needs. I suggest that in a market meltdown situation, any income shortfalls might well be accommodated by modest changes in spending habits.
Early in my retirement, I was challenged by this exact scenario. Spending changes are a workable option. Delaying the purchase of an automobile, eating out less frequently, skipping a vacation cruise holiday, and even making the kids initiate a low interest rate college loan do miracles for the financial balance sheet in short order. And they were only temporary anyway.
From my perspective, measuring a market against an earlier peak level is unattractive and inappropriate. It is a false standard for an individual investor because almost nobody entirely entered the marketplace at that precise, unfortunate time. Admittedly, it is a positive signal for a continuing Bull market overall when these high water resistance markers are penetrated. But an individual’s portfolio and his adjustment decisions should not be exclusively tied to historical landmarks.
I’m an enthusiastic and happy Vanguard client. These days, I basically do my banking with them through their short-term corporate bond mutual fund. I do so irregularly and infrequently. I do not sweat small price changes in that fund; it’s noise level stuff at the fraction of a penny level.
And note that “a penny saved will depreciate rapidly”.
Rjb112, you seem to be a highly motivated investor and a financially focused person. That’s goodness unless you allow these positive attributes to squeeze out other important living functions. I guarantee that you will make bad investment decisions. Remember, for every trade there is a successful side, but, also someone was on the wrong side.
I surely have been on that wrong side more than I like to acknowledge. However, I have managed to reduce my error rate over the years. I attribute that reduction to the formulation of my earlier Super Six ( S6), or now Superior Seven (S7), rule discipline.
The original S6 components in general are (1) savings, (2) simplicity, (3) statistics, (4) stability, (5) selectivity, and (6) strategy. Recently I added John Bogle’s stay the course admonishment as the Number (7) “stay” component to form S7.
For example, in the savings component, it took me awhile to recognize that by decreasing my spending only a small percentage, I could double my savings rate. That’s a nice little piece of wisdom.
You are fully aware of my addiction to statistics as a workhorse to guide investment planning and decisions. It is an important element in my list, but I do not permit it to function in isolation to other factors. That admission might shock a few FMOers.
By stability I mean behavioral emotional stability, by selectivity I mean the active and/or passive mutual fund management decision, and by strategy I default to my asset allocation decisions which do morph over time.
I hope you found this reply at least a little informative and useful for your investment purposes.
Best Wishes.

Bee, I have not had a chance to look at these at all, but I can tell you that fund rankings hardly ever have much impact on our decision process. There are myriad reasons for this, but one of the best examples involves the recent arbitrary re-classification of OSTIX from multi-sector bond to high yield bond. In the process, the fund went from 5* rating to 2* overnight. So we don't really use ratings at all in our screening process. Truly bad funds will be obvious in other data points, a lot of funds with 5* ratings probably do not deserve them, and now we have M* offering predictive analyst ratings that are simply another marketing tool for M* and the funds who achieve the top ratings. It is amazing how much one can learn from reading a prospectus, the SAI, annual report and then digging through fund data.

You beat me to it.
http://www.sec.gov/Archives/edgar/data/915802/000091580214000011/globalreachfundsoftclose0416.htm
497 1 globalreachfundsoftclose0416.htm FINANCIAL INVESTORS TRUST
Grandeur Peak Global Reach Fund
(the “Fund”)
SUPPLEMENT DATED APRIL 16, 2014 TO THE FUND’S PROSPECTUS DATED MAY 1, 2013, AS SUPPLEMENTED FROM TIME TO TIME
This Supplement updates certain information contained in the Prospectus for the Fund dated May 1, 2013, as supplemented from time to time. You should retain this Supplement and the Prospectus for future reference. Additional copies of the Prospectus may be obtained free of charge by visiting our web site at www.grandeurpeakglobal.com or calling us at 1.855.377.PEAK (7325).
Effective as of the close of business on April 30, 2014, the Fund will close to new investors, except as described below:
·A financial advisor whose clients have established accounts in the Fund as of April 30, 2014 may continue to open new accounts in the Fund for any of its existing or new clients, as long as their clearing platform will allow this exception.
·Existing or new participants in a qualified retirement plan, such as a 401(k) plan, profit sharing plan, 403(b) plan or 457 plan, which has an existing position in the Fund as of April 30, 2014, may continue to open new accounts in the Fund. In addition, if such qualified retirement plans have a related retirement plan formed in the future, this plan may also open new accounts in the Fund, as long as their clearing platform will allow this exception.
This change will affect new investors seeking to purchase shares of the Fund either directly or through third party intermediaries. Existing shareholders of the Fund may continue to purchase additional shares of the Fund.
As described in the Prospectus, the Fund’s investment adviser, Grandeur Peak Global Advisors, LLC, retains the right to make exceptions to any action taken to close the Fund or limit inflows into the Fund.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

Thanks Bob for your comment on the Bear Market Percentile ranking.
For those that haven't referred to this data point it can be found as part of M* Ratings & Risks Tab once you have entered your ticker symbol search. Scroll down to Volatility Measures. I noticed that clicking on the the 5 year tab it often provided information while often other timeframes where blank. I also noticed that the category or index indicator comparisons offered no data. It would be nice If M* offered comparison ranking information. It seems this feature would be helpful for an individual's entire fund portfolio as a comparison across all funds held.
Are there other ways you use and access this M* ranking data point?

@MJG: Thanks for the excellent post.
With respect to: "Perhaps we should focus our attention on things we can control. Things like building a cash, or near-cash (short term corporate bonds) reserve of a year or two to outlast any Bear market scenario."
An issue of importance is how much of a near-cash reserve to build. The objective is to not have to sell equities during a bear market. The time period stated, "reserve of a year or two" would not "outlast any Bear market scenario". Consider the bear market that began approximately January 15, 2000, and resulted in a drawdown of roughly 45%. The goal is not to sell equities until their prices have recovered. Did it not take until 2007 for stocks to recover their losses? You would have needed a 7 year near-cash reserve to not have to sell stocks while they were down (assuming no current income).
Consider the bear market of 1973-1974. Equities peaked in late 1972. The low was reached in December 1974. Stocks did not recover for 8-10 years.
You mentioned, "According to InvesTech’s Jim Stack, over the last century, the average duration of a market recovery is about 3.8 years."
That 3.8 year average figure sounds about right. One would not be wise to just plan for the 'average' bear market recovery.

I bought it ~2.5y ago because I pay very close attention to anything that catches DS's eye, like so many here. In a practice I am increasingly trying to avoid in retirement (and succeeding with since), I bailed out of it after a couple years because it was doing fine but not anything consistently better (reward or risk) than my 2-3-4 big holdings, PRBLX, FLPSX, YAFFX (yes, I know the categories are not the same). I'm trying to reduce and simplify. Subsequent performance has attested to the wisdom of my decision (the dumbest conclusion an investor can draw most of the time), and I did add some moneys into RGHVX since I wanted to continue with the nominal shop.

Very nice sir, yet again.

Even if an investor fears an impending market meltdown, one viable option that is universally available is to do nothing; stay the course.

Kind of reminds me of...

Obi-Wan: Let's just say we'd like to avoid any imperial entanglements.
Han: Well, that's the real trick, isn't it?

And...

Luke: I won't fail you. I'm not afraid.
Yoda: You will be. You... will... be.

If folks really could hold 10, 20, 30 years...more, OK.
But when the market breaks past say -15...-20%, it starts to get very painful. Very scary.
Sure, it corrects often, like you note. But will this time be different? Will it go -30...-40...-50%? Worse?
Stocks can go to zero.
Markets can go to (near) zero.
Just about every asset class in every sector in every country has proven it can draw down -70...-80...-90%.
Takes a long, long time to recover from drawdowns of that magnitude.
Fortunately, as you say, they do. It may take 30 years or more, but eventually, thanks to human productivity they do.
In the long run, markets of all kinds tend to go up. But in between, they are subject to extremes...or "vulgarities," as I heard an asset manager recently describe.
Just not sure most investors, even institutional investors, are really prepared to endure the extremes, despite the well-intended call to "do nothing" from you and great investors, like Mr. Buffett.
But forgive me, I've been reading and listening a lot to Mebane Faber lately. He writes almost as well as you =).
Hope all is well.

Hi Guys,
Admittedly, I am an optimistic person. During the latter years of my other life, I was a major organizer and contributor to an endless number of aggressive, challenging engineering work proposals. I believed each would be rewarded the contract; in fact, only a small fraction of our team proposals won the contracts. Even with those disappointing outcomes, I retained my enthusiasm and confidence until retirement.
Over the last week or so, a bunch of MFO regulars have posted worrisome submittals with regard to a potential market meltdown. Presently, I am not in that camp.
I do not worry much over any looming equity Bear market bust. Surely, It might happen. However, I will survive and so will all of you with just some conservative planning, and more importantly, a little cash reserve to cover any plunge and its recovery period. Trying to time the downward thrust is hazardous duty and could deepen the impact of the market cycle’s reversals if not adroitly handled.
As Nobel Laureate economist Gene Fama said: “Your money is like soap. The more you handle it, the less you’ll have”.
As you’re all aware, I love statistics. You’re also familiar with the fact that investment markets are awash with useful and reliable statistics. I certainly deploy this vast statistical database when making my broad market decisions.
These statistics strongly demonstrate the asymmetric upward bias to positive market rewards. The short term statistics are chaotic in character and do resemble a random walk. However, as time expands, so do the odds for positive rewards. Historical data shows that equity market returns are random with roughly a 10% annual upward slope. That’s a confidence builder.
Here are a few of the stats that I find particularly compelling.
On a daily basis, the markets yield positive returns about 53 % of the time. When the time horizon expands to monthly, quarterly, and annual timeframes, the positive outcomes progressively increase to 58%, 63%, and 73%, respectively. Time has a healing influence.
Over 5-year and 10-year rolling periods, the positive outcome odds increase again to the 76% and 88% levels. Wall Street wounds heal more persuasively over longer time horizons.
It is troublesome that so many MFOers have expressed high anxiety over the possibilities of a sharp market downturn. Indeed, it is a certainty that a Bear market will occur. Over the last 8 decades, equity markets have sacrificed 20 % of its value on 4 separate occasions. In the last 113 years, the stock market has suffered Bear reversals 32 times. That record shows a 20 % downward thrust every 3.5 years on average.
Main Street pays the same penalty as Wall Street during these dark episodes since active mutual fund managers have not displayed any talent to really soften the blows.
The good news is that Bear market cycles have a short average duration; their average length is only slightly longer than a single year. The recoveries are rather dramatic with a major portion of that recovery happening near the beginning of the process. Therein is the dilemma for an investor trying to time the reversal. He needs a sharp criteria and speedy reflexes to respond to this rapid turnaround.
The other good news part of the market bull/bear cycle is the duration and magnitude of the bull segment. Its duration is over three times the Bear periodicity, and the magnitude of the gains wipe away the losses during the Bear segment. According to InvesTech’s Jim Stack, over the last century, the average duration of a market recovery is about 3.8 years.
These statistical observations form the basis for my optimism.
Those who flee to cash too early, or reenter too late pay opportunity costs in addition to trading costs. That cost is exacerbated if an investor patiently waits for the confirmatory signal of a Bull market (a 20% gain from the market’s low water marker).
Most folks agree that reversals are impossible to predict. So, why worry that problem? Perhaps we should focus our attention on things we can control. Things like building a cash, or near-cash (short term corporate bonds) reserve of a year or two to outlast any Bear market scenario. Also we could be flexible in our buying habits during stressful periods. A Toyota Camry is not a bad compromise over a Lexus when the road is rough.
Even if an investor fears an impending market meltdown, one viable option that is universally available is to do nothing; stay the course.
I am not quite so brave. If my fears are supported by numerous signal data (like inflation rate changes, super high P/E ratios, low consumer confidence, unhealthy ISM raw order index values), I would be inclined to take some action. However, that action would be both limited and incremental in character.
I believe in the 20/80 rule. In a business, 20% of the workforce does 80% of the productive work. In investing, I tend to keep 80% of my equity holdings as permanent positions. If motivated by Bear horror stories, I might incrementally shift 20% of my equity holdings into less volatile products. The changes would be made incrementally as Bear evidence accumulated and the odds shifted to favor a downward movement.
The overarching purpose of this post is to caution MFOers against acting too precipitously. All investors behaviorally tend to be overconfident and overactive prone.
I certainly welcome your perspectives on this matter. I’m not an expert, and even the experts often fail to identify market tipping points. Jesse Livermore made and lost fortunes several times during his turbulent career. Even the baseball great Babe Ruth once led his league in strikeouts.
Best Regards,

Once again, pretty decent list, looks like.
Here's link to latest MFO ratings of them:
Kip 25 (Stock Funds)
Kip 25 (Bond Funds)

FYI: Follow-Up article
Regards,
Ted
http://www.sfgate.com/business/networth/article/Dodge-amp-Cox-investment-manager-taking-turn-to-5402091.php
Walk On Wild Side: Lou Reed:

FYI:
Regards,
Ted
http://www.kiplinger.com/printstory.php?pid=12296

Dip a toe in the water. I suppose this is not anything you don't already know. Don't go whole-hog all at once. I own a different DoubleLine bond fund: DLFNX. It's supposed to be a core fund, but not very traditional, itself. But don't ask me to EXPLAIN that. Do not expect much from these bond funds in the current environment, and you won't be disappointed. AUM, according to M* is $14.5M......You have a more basic, ordinary, core bond fund or funds already, eh?
DLFNX: 3 years up +5.98%
1 Year: up+ 0.35%
YTD: up +3.14% (better than many of my equity funds.)

David's profiled recommendations in foreign small/mid equity categories (FPIVX, DRIOX, OBIOX):

I think that aside from the top 5% (mentioned by cman) benefiting from the Feds actions, the Fed also get credit for bringing corporations, pension funds, state and municipal investments, banks, and even IRAs back from the abyss.
I see the Feds actions as part one; addressing systemic risk, which if they can avoid a hard landing they will have accomplished, and part two; fostering aggregate demand, which we see little evidence of.
I think the Fed and the banks will play a role in extending credit when that happens, but right now the banks are still sucking on the Feds Teet. No room for the thristy masses.

That helps quite a bit. I believe many if not most people here felt Buffett was being too aggressive, though I posted approvingly of his suggestion.
IMHO, he's suggesting forsaking bonds, and keeping three years cash or near cash around (at a 3-4% draw down rate, a 10% stake would provide about 3 years of safety net). So long as the market doesn't dive, one can sell off the equities for cash flow. Should the market take a multi-year dip, one has that safety net. I now understand you to be thinking along those lines.
As I posted before, I would tweak his allocation in two ways: drop the equity portion to 85% (I'm not that comfortable with only three years of near-cash), and diversify beyond the S&P 500.
As to the near-cash portion - he's (IMHO rightly) saying that one need not seek a 100% guarantee that the value of this investment never drop. Even short term government bonds can drop a little. There's nothing magical about the number zero. A small loss (even a percent or two over that 3-5 year period) can be worth the risk.
On the other hand, a short term government fund is even worse than cash right now - higher risk (interest rate risk) and similar yield (about 0.9% for a 3 year note) than you can get in an insured bank account.
For a taxable account, I might consider Bee's suggestion of a short term muni fund. Unlike Bee and BobC, I'm not so comfortable with NEARX because of the risk it takes on (though I see it has dumped lots of its Illinois bonds since the last time I looked). In contrast, VMLUX (which is a short term muni fund also) takes on less risk (with correspondingly lower yield). Maybe consider NEARX as part of a portfolio (for the 4th and 5th years of the safety net I suggested above).
Ultimately, what one (or at least Buffett) seems to be looking for here is a near cash investment - not one that really "feels" like a bond allocation.

There should not be any confusion. Interest rates will go up, but we do not know when or how fast. Likely scenario is no fed increase in Fed Funds Rate until late 2015, unless inflation moves faster than expected. When they do raise Fed Funds Rate, it will most likely be in quarter-percent increments. So what to do?
Don't spend a lot of time trying to out-think the Fed. If you own individual bonds, and you plan to hold until maturity, continue to hold. Or sell the bond, capture what is probably a sizeable gain, and move to flexible bond funds. If you own bond funds, use some logic. Avoid long-term Treasuries since they will suffer the worst fate. Avoid funds that can only use one kind of bond or a certain maturity range of bonds. Use funds where managers have a lot of flexibility. Duration itself may not be as important as duration compared to long-term Treasuries. Hence importance for flexibility of investment style. Look at funds like OSTIX, GSZIX, TSIIX, LSBDX.

FYI:
Regards,
Ted
http://www.marketwatch.com/story/tiaa-cref-to-buy-nuveen-investments-for-625-billion-2014-04-14/print?guid=E98D6FBA-C3C4-11E3-8F1C-00212803FAD6
A Play For Retirees:
http://blogs.marketwatch.com/encore/2014/04/14/tiaa-crefs-nuveen-buy-a-play-for-retirees/tab/print/

Re Bitzer's last note, the discrepancy in published fees might relate to its fund-of-fund nature. Lobbing-off the fees imposed by the underlying funds might result in a lower apparent fee. Just a guess, but have seen this with some more traditional fund-of-funds. USA-Today looks correct at 2.22%.
Break-down of investments has me wondering what the 45% "other" represents. Any chance they're shorting stocks? Suppose that might be metals, real estate, commodities or derivatives. My snap answer here is that no fund is worth that high a fee. No doubt I'm missing something others are seeing in this fund. My highest fee fund by far is a commodities fund that charges 1.44%. The more I follow similar plain-vanilla funds I've held a decade or more, the more I can see the effects slight differences in ERs have on returns over longer periods. Wouldn't have believed that a decade ago. But, now I do.

FWIW, M* ranks RNCOX at 45%tile for 1 yr and 50%tile for 3 yr against moderate allocation funds and 7.9% annual return for 3 yr, so I'm paying over 20% of the fund's return in expenses lately, if M* has the costs correct. It does rank MUCH better at the 5 year comparison and has a good rank this year.
Since I'm not sure what return and downside protection are worth, I do hope Charles can produce an excess return per expense ratio. It almost certainly will prove enlightening and provide some rational guidance in fund (or ETF or index) selection.