Sold DLRFX in my IRA.
Took partial gains in lot of my Artisan holdings.
Bought some American funds.

We interpret charts based on what we wish should happen in the markets. Now, there is nothing wrong with that.
It's one thing for me to get paranoid about an unfavorable MACD crossover if I'm mulling taking gains in one of my holdings. I can convince myself if I sell and the security then goes up, at least I "acted" in the present. Similarly if I was looking to buy a security and then I can use a positive MACD crossover (among other things) to decide I need to buy it. Once again, if the security starts plummeting at least I did my ANALysis.
What is NOT okay, is to write a BS article every other week trying to predict the direction of the market based on a chart and get paid for it. Because there is no personal money at stake in doing that. It is just utter nonsense, and is THE reason investor returns do not match fund returns. These experts are making money and they don't even have to invest it because they get a consistent "return" for every such article they publish while investors use real money when reacting to these articles.
Let's all agree to not perpetuate this criminal enterprise.

I will also note that fees always have a negative impact on investor returns. ... Mutual fund managers never have a losing year when their funds have negative years, the investor does. ER is paid regardless as to whether the investor subtract the fee from gains or adds the fee to losses.

Morningstar: "Zero or negative expense ratios are rare but not unprecedented." The article contains examples and links. The ones I had in mind were the Bridgeway funds the article leads with. They are especially relevant as they have performance adjustments that can make fund expenses go negative. The fund managers most definitely had a losing year.
Since the article is old, and some of those links are dead, I'll help out a little. The Elon Musk backed funds referenced are also described in this Bloomberg article.

Vangaurd has a nice interactive chart that illustrates the impact Expense Ratio (ER) fees have on "lost return".
By sliding the expected return control closer to the left (simulating a low return environment where CAPE is historically high) fees grab proportionally more of the return that the investor keeps.
I will also note that fees always have a negative impact on investor returns. What the chart fails to shown is a negative returns scenario and the additive effect ERs have on negative returns. Investors deal with negative risk while also absorbing the negative impact of fees during down markets. Mutual fund managers never have a losing year when their funds have negative years, the investor does. ER is paid regardless as to whether the investor subtract the fee from gains or adds the fee to losses.
https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-cost

@expatsp, it's because they're not actually rotating on a monthly basis. They own swaps which are based on the actual group of four sectors that the index is investing in. Of course those swaps do have a time period associated with them and that means at some point they have to recognize gains and/or losses, but it's nothing like if they were actually rotating each month. At this point M* says their cap gains exposure is a little over 12% and that makes rough sense in terms of the unrealized gains they had in their December SEC filing. Of course they also have to distribute all the income from the bond portfolio so you'd think there will be an ongoing tax bill but hopefully they structure their swaps so they end up with long-term gains on most of the gains. I guess the interesting question might be how those swaps are treated. If you trade futures contracts then you mark to market and paying taxes on the gains and/or losses regardless of whether they're technically realized or not. I can't remember the specific percentage but the IRS just defines that any gains are 60/40 long term/short term, or something along those lines. If swaps are treated the same then the impact would be different for sure and I think it would most likely be worse.

@hank, as of the end of January he had 12.7% in below investment grade bonds and 6.3% in unrated bonds. While that clearly doesn't have to mean high yield in every case I guess its a decent estimate and it seems like he's not pushing the envelope in reaching for yield. Unfortunately the SEC doesn't require credit quality to be broken out in the quarterly schedule of holdings so you can't find out the history or what he's done in different environments without finding someone who's saved all the historical fact sheets or making your own judgments and trying to add things up manually based on the SEC filings (no fun!).
I think @davidrmoran has a good question about the impact of rotating. Even if the fund gets caught with it's pants down one month it gets another chance the following month. If the cheap sector with the least momentum takes off one month then the fund would own it the following month, unless the other cheap sectors took off as well (good for the fund) or this one sector all of a sudden wasn't one of the 5 cheapest anymore. That's all possible and it might even be fair to assume it will happen at some point, but it also seems reasonable to assume it won't happen all the time.
The fund could also run the risk of chasing its tail or being whipsawed and that's a common risk associated with mechanical strategies based on momentum. I think its worth paying attention to even though its not clear to me that you'd be able to identify the type of market that would cause those problems in order to get out or reduce for a while, nor do I think it's easy to figure out when things have changed and it's time to get back in before you give away enough gains to make the whole effort questionable.
I did look at monthly returns for DSENX (and the results could be slightly different than DSEEX but this will be more conservative) and the fund trailed the S&P 500 in 13 of its 40 months in existence so far, or roughly 1/3rd of the time. It managed to trail the S&P for 3 months in a row once and 7 of the times it trailed were negative months for the S&P out of 13 negative months for the S&P. Aside from the fact that 40 months isn't enough for any real judgments even the data itself doesn't seem to lead to any big conclusions about when you might expect the fund to do worse. Maybe you could say the fund wins a higher percentage of the time when the S&P is positive but it would be useful to see how the fund performs during an extended negative period for the S&P before considering whether its reasonable to have some expectations. If nothing else, though, reevaluating the sectors to invest in each month doesn't seem to have hurt and may have helped to keep the periods of losing to the S&P short.

Frankly I found it to be a bit mumbo jumbo. I did not come away with any conclusion as to whether I should buy low volatility funds NOW or not. If volatility is low today it can only go up and I think the author is saying this needs to happen for these funds to do well.
Other than that he is making argument people chase performance and then bail when fund does not perform. Err, that's true of any fund class. And if these funds have done slightly worse than the index, I don't see how they have "not delivered on the promise". It is also implying to me most investors are dumb since they are selling these funds because it is not as if they are bailing because of bad performance, and then why exactly is not clear to me (or I guess I'm just not smart enough).
I own VMVFX and is one of the few funds I call "holds". Instead of buying BMO low volatility funds I discovered through my ANALysis they were simply buying low volatility stocks so I bought Consumer Staples and Utility Funds as trades (sector funds will never we long term holds for me). Seems to me I should get out of these funds since I'm sitting on gains.
Moral 1: There 3 kinds of lies. Lies, Damn Lies and Statistics.
Moral 2: Statistics is like a bikini. What it reveals is interesting, but what it conceals is vital.

As I mentioned, I looked at their quarterly schedule of investments for December and they've used the swaps to get equity exposure with no cash outlay. Almost 80% of the NAV was invested in bonds of one sort or another, 13+% was what I would call cash and 8-% was other. I think, but I'm guessing, that almost all of that "other" is unrealized gains on their swaps. The notional amount of the swaps is very close to the amount they have invested in bonds and cash, so the NAV excluding the unrealized appreciation on the swaps.
So, what are the risks and how likely are they? I'd be happy if others have more to add because I would suggest for a minute that my list is complete.
1. As with any investment other things can do better. If the fund's 4 sector investments don't do as well or better than other sectors then the fund would have a more difficult time keeping up with the S&P 500, for instance. The theory is that CAPE has predictive ability and that will drive better returns. The studies I've read suggest CAPE does have statistically significant predictive power but it doesn't tell you much, if anything, about what will happen in the next month. I know they've done a great job of beating the S&P 500 every calendar year since inception but I'm not aware of anything about CAPE that would make me think it'll always be that way.
2. If the equity markets crash then the fund will perform just like the sectors it's invested in but it should do a bit better thanks to the income from the bonds. They won't have margin calls based on what I can determine and they know when their swaps expire so they should be able to sell bonds in an orderly fashion to pay off losses on those swaps. Without getting into the nitty gritty it looks to me like they have enough highly liquid bonds that they shouldn't end up having to sell less liquid bonds in a fire sale.
3. The worst case I can think of would be something like hyperinflation that drives short term interest rates very high and equity markets down, like in the 70s. If the transition to that was sudden then they'd be holding bonds that would lose value and could more than offset the income they pay plus they'd be losing money in equities just like their index and they'd do worse than the index rather than better. Is that possible? Sure. Is it likely? Probably not very.
4. Could they run into a problem where the counterparty on their swaps, Barclays in most cases, experienced a crisis and wasn't able to pay what the fund was owed? I guess so although you'd have to assume that's less likely today than 10 years ago but that would only eliminate gains the fund had made rather than the cost of its investments, which would depend instead on the counterparty to the hundreds of bonds they own.
It seems to me if you like or believe in CAPE as a "factor", since that's essentially what this fund is, then it's a pretty nice approach they've developed.
@hank, I also know you suggested taking a look would be under the hood of the bond holdings. I will eventually read the prospectus but just glancing through the list of investments and the fact sheet didn't strike me as anything crazy. It looked like a Gundlach bond portfolio and to a large degree I consider that a good thing.

Thanks for the provocative question @LLJB. A good one for @BobC or @msf to answer.
I'd like to play around with it (more for self-education than anything else), if you don't mind. DSENX is what I'd consider a "black-box" fund. To me the term to characterizes funds which (1) make extensive use of derivatives and/or (2) allow an unusually high degree of latitude on the part of the manager. I'll assume DSENX has the ability to short assets (related to use of derivatives).
Derivatives are subject to numerous risks. The linked summary prospectus http://www.doublelinefunds.com/wp-content/uploads/Shiller_Enhanced_CAPE_Sum_Pro.pdf prominently defines some of those. The Class N .89% ER is quite reasonable for this type of fund. Reported turnover is 67%. My understanding is that brokerage/trading fees are not reflected in a fund's ER, so expect a much higher amount of hidden cost compared to a plain vanilla equity fund.
If you create a 100% exposure to some type of equity index(s) through use of derivatives, while at the same time investing a significant portion in fixed income, than of course you're leveraging-out the equity exposure. Price swings on the equity side should be exaggerated compared to actual equity values. The managers, as you suggest, probably count on their fixed income holdings to moderate or offset the inherent equity volatility. Lipper's breakdown of holdings:
Bonds: 42%
Equity: 33%
Other: 18%
Where I'd take a second look, since you seem very knowledgeable about the equity orientation, is at the types of bond holdings allowed. It appears from the prospectus that fixed income (average maturity out to a maximum of 8 years) may include CMOs, high yield, floating rate, and just about anything else the manager wants to buy - including the kitchen sink. A lot of funds will try to hedge equity fluctuation with high quality bonds. This latitude in the fixed income end is a bit concerning to me. But I'm not Jeff Gundlach. :)
Not entirely sure what you hope to achieve through this fund. I've used black-box funds with varied success over the years, usually as hedges against equity/bond losses - but nothing quite like this one. Oppenheimer's ill-fated commodities fund (QRAAX) used derivatives to invest in various commodity futures. At times the fund would report bond holdings as high as 110% while still being fully exposed to commodities! The fund I replaced it with, Capital Income (OPPEX), is also a bit of a black-box. I trust the current manager. But in the wrong hands the fund could take a Kamakize dive at just the wrong time. Those buying DSENX are likely making a similar calculation based on Gundlach's excellent record.
FWIW: Lipper scores (3-year + old) DSENX very highly, giving 5 (its highest score) for "capital preservation" among "diversified equity" funds. These ratings are based on performance comparisons rather than any in-depth analysis. So tables could turn quickly, I suspect, if the style of investing were to fall out of favor.

$67,928 if you were earning 5% risk-free.
I used the calculator bee points us add and had it calculate $100 initial, $300/year addition (i.e., $25/month), compounded monthly for 50 years. The "compounded monthly" part just means we assume that your April portfolio would have undergone some modest appreciation so your May portfolio will be more than just April + $25.
It's a very imprecise calculation since it does assume all of the additions occur once a year through capital growth occurs, uninterrupted, monthly. The better answer would come from a Monte Carlo simulation. If you're familiar with Excel (Chip and Charles will happily testify to the fact that I am not), one of the faculty at Wabash College has posted a free Monte Carlo add-on for it. The technique also underlies the retirement calculators at T. Rowe Price and Vanguard.
Thanks, by the way, for helping your granddaughter. I've had this same conversation with one of my brothers about why (17 years ago) he should really be putting away $25 or $50 a month for his son's education. I even set up the account and put in some hundreds of dollars to start it. Mostly I got uncertain nods and a long-unfunded account in return. There's some research that suggests we need to visualize our future selves (in some cases researchers use "aging" software to accomplish the task) in order to make this work. Something like, "let's say you've worked like a dog for 40 years and now you find yourself living alone in a house that's too big with a quarter-century of 'vacation' in front of you. What do you imagine you'd want to be able to do or feel?"
For what that's worth,
David

FYI: Riding just one growth stock to big gains is always a challenge. But Will Danoff does it so often that Fidelity Contrafund has become a $107 billion behemoth that's returned an average annual 12.94% during his more than 27 years at the helm.
Regards,
Ted
http://www.investors.com/etfs-and-funds/mutual-funds/fidelitys-will-danoff-talks-about-the-super-bowl-and-super-stocks/

As is all too usual, I'm a little confused here. It looks like about 75% of the random growth stock group selections beat the S&P, while the previous post claimed value persevered. Polen beat the average random growth selection, of course (one would hope so, at a 1.35 e.r.), or it wouldn't have presented the "data."
Now, if John Bogle is right, and indexing beats active management; and value beats growth (not quoting St. Jack here; I think other studies have said that; and I think that was the thesis of this month's "elevator talk" ) does Polen's (US) Growth's record mean they will beat international managers (who might have more experience)?
I suspect other participants will enlighten my ignorance.

FYI: he RMB Mendon Financial Services Fund (the “Fund”) will “soft close” on March 15, 2017. This “soft close” is designed to ensure that the Fund continues to be managed in the best interests of its existing shareholders. Effective as of the close of trading on March 14, 2017, the availability of the Fund to new investors is limited. New investors in the Fund must meet certain requirements as set forth in the Fund’s prospectus to make an investment. Those who are shareholders of the Fund as of March 14, 2017, and who continue to be shareholders thereafter, may make additional investments in the Fund and also reinvest dividends and capital gain distributions in the Fund unless RMB Capital considers such additional purchases not to be in the best interests of the Fund and its other shareholders. Tickers impacted by the soft close are RMBKX, RMBLX, and RMBNX.
Regards,
Ted
http://www.businesswire.com/news/home/20170302006265/en
M* Snapshot RMBKX:
http://www.morningstar.com/funds/xnas/rmbkx/quote.html
Lipper Snapshot RMBKX:
http://www.marketwatch.com/investing/fund/rmbkx
RMBKX Is Unranked In The (FS) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/financial/rmb-mendon-financial-services-fund/rmbkx

FYI: The S&P 500’s 1.37% gain yesterday was the sixth best start to March (1st trading day of the month) in the index’s history. Below is a quick table highlighting all 1%+ gains on the first trading day of March for the S&P 500 since 1928.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/sixth-best-start-to-march-on-record/

Sandra- surely you can't really believe that my changing some chart parameters to allow for larger than normal increases in investment gains is an accurate predictor of anything. Nonetheless, it has worked out that way a fair number of times. Make of that what you will.

new funds that may attract investor capital, but will cost them dearly

Hi @VintageFreak and others,
I also harvest some of my capital gains along the way each year so they want go to waste during a stock market correction. The amount I take each varries based upon a target income amount I shoot to achieve each year from my portfolio. The twenty percent that you shoot for each year is more in the range of 5% to 10% for me. This is one of the ways that helps me maintain a high cash level within my portfolio (capital gain harvest).
Take care and I enjoy reading your post.
Old_Skeet

It's not just an effective strategy for managing volatility, it can significantly beat the market in cases of significant downturns, although it would tend to trail in cases where an investor gets whipsawed. From late 2000 until the beginning of 2013 the S&P went nowhere (excluding dividends, which isn't unimportant, but both the 10 month and 12 month moving average systems made enough gains that someone could get whipsawed a lot and still be ahead. The real question is whether you fear a big downturn or fear being whipsawed more in the future. Considering the volatility benefits it would seem like a decent chance of significantly improving risk adjusted returns and possibly absolute returns, although the internet bubble and the credit crisis were a big help in the last 15+ years.

FYI: Dennis Gartman is the man behind The Gartman Letter, a daily newsletter discussing global capital markets. For almost 30 years, The Gartman Letter has tackled the political, economic and social trends shaping the world's markets. ETF.com recently caught up with Gartman to discuss the latest developments in the financial markets.
Regards,
Ted
http://www.etf.com/sections/features-and-news/gartman-dont-buy-stocks-consider-gold?nopaging=1

Best and Worst sometimes has a lot to do with timing...when you buy a fund. For example, WASYX had a fantastic run until it ran into problems with asset bloat and big management changes. Those folks who owned it from 2007- 2013 and sold it for whatever reason probably loved it. Even with some stinker years, especially the last 3+ years, its 15-yr average return is about 8%. But this is why WHO runs an actively-managed fund is so critical, as is asset bloat and the problems it might cause.
Investors often are late to the party with funds, getting if after the big gains. Once the fund gains large numbers of assets, it may be unable to continue using its unique strategy. Certainly MFLDX is a good example of this. Spectacular numbers from inception 2008 through much of 2013 (assets ballooned from $35 million to almost $16 billion), then running of the tracks and crashing, not recovering even as assets dropped to $370 million. Here there was no management change. In hindsight, the small fund's purchase by a large fund company was likely a big mistake.
I would urge caution about labeling relatively new funds "Best". "Best" can mean different things to different investors. While I personally own SIGIX because of its manager's track record, the fund is barely 5 years old. I own it because I believe it is a good compliment to a higher-volatility index like SCHE. It may not have the best long-term total return numbers, but I am ok with that.