Based on my initial investment of 7000 shares at $7/sh = $49k I would be getting $9800 each year in dividends. My cost basis would never change and my dividends would never change. The interest earned is not reinvested in shares. All income is held in cash in money market yielding zero.
I think the area we are ignoring that would have the biggest impact is that if I sold at $17, I would be able to buy more shares (deriving more income) from the new fund purchased although at lower yields, but all of that would be at risk of loss if the share price dropped below my newly established cost basis. The chance of a capital loss at cost basis of $7 is near zero so from a portfolio management standpoint risk is greatly reduced and makes the decision not to sell my $7 investment much more attractive regardless of any compounding calculation. Theoretically, my portfolio value always goes higher although risks always abound.

Added 8/06/16
PTIAX
Performance Trust Strategic Bond Fund
Symbol: PTIAX
No Transaction Fee No Transaction Fee 1 @ Fidelity 5000/500
1 No Transaction Fee funds are available without paying a transaction fee. No Transaction Fee funds will also be offered without a load or on a load waived basis. However, the fund may charge a short term trading fee or a redemption fee
From PTIAX
What Sets Us Apart JUNE 30, 2016
■ Flexible multisector bond fund designed to shift among a broad
range of fixed income sectors
■ Managed by a team with expertise in complex and niche fixed
income sectors, which has resulted in a distinct portfolio
■ Seeks best risk adjusted opportunities through interest rate
agnostic investment process
Ten Largest Multisector ( Bond ) Funds Holdings in Common with PTIAX
Number Percentage
1. Pimco Income 19 4.63
2. Loomis Sayles Bond 0 0.00
3. Loomis Sayles Strategic Income 0 0.00
4. Lord Abbett Bond-Debenture 0 0.00
5. Fidelity Advisor® Strategic Income 0 0.00
6. Fidelity® Strategic Income 0 0.00
7. Franklin Strategic Income 0 0.00
8. Alliance Bernstein High Income 4 1.58
9. T. Rowe Price Spectrum Income 0 0.00
10. Pioneer Strategic Income 0 0.00
Average 2.3 0.62
http://ptiafunds.com/documents/ptam-difference_ptiax_final.pdf
Bond-fund correlations increase interest-rate risk
August 4, 2016 http://www.investmentnews.com Aug 4, 2016 @ 1:32 pm
By Jeff Benjamin
Financial advisers should diversify into credit-risk strategies.
...K.C. Nelson, who manages $3 billion worth of fixed-income portfolios at Driehaus Capital Management, said bond fund investors who aren't careful could be hit hard by an interest rate hike, or just hit less hard by continued low rates.
“Investors are drawn to bonds because they're afraid of all the macro risks out there, and they also believe interest rates are not going up anytime soon, but they're making a mistake by looking in the rearview mirror at the performance of bonds,” he said.
When interest rates were at more normalized levels, diversification across the fixed-income spectrum was more straight forward, and could be accomplished through a blend of corporate, municipal, government bonds, and mortgage-backed strategies.
But with the Federal Reserve setting its overnight rate at 0.25% and the 10-year Treasury yielding just 1.5%, the bond world has essentially morphed into a singular blob of rate-risk.
Consider, for example, the various correlations to the SPDR Barclays Intermediate Term Treasury ETF (ITE).......
http://www.investmentnews.com/article/20160804/FREE/160809953?template=printart
From one of the story's links from Thornberg
Bond Correlations and Interest Rates,
Not Always a Straight Line
Josh Yafa | Director,Thornberg Client Portfolio Management
JUNE 2016
When discussing investing, a standard rule applies: bring up bond correlations if your audience needs a nap.
That axiom,however, suddenly becomes less tiresome when investors begin to worry about rising interest rates. Not surprisingly, the
thought of losing significant principal from bonds—an inexplicable combination of terms for investors accustomed to fixed
income’s ballast—tends to pique the attention of even the most seasoned and skeptical.
http://www.thornburg.com/pdf/TH3621_BondCorrelation_C.pdf
A look @ the Tax Excempt Market
https://secure.wasmerschroeder.com/UserPages/1038185.pdf
Quarterly Bond Market Overview
June 30, 2016
Wasmer, Schroeder & Company Wasmer Schroeder High Yield Muni Instl WSHYX
“ISMS” & CENTRAL BANKS
As we have pointed out in this publication on numerous occasions, multiple
secular trends are at work across the globe keeping growth low and central bankers active.
Political polarization in this country and others continues to put the burden squarely on central
banks as the ability of lawmakers to make any meaningful contribution is non-existent. Even in
the U.S., where our central bank has slowly begun the process of tightening monetary policy,
the Federal Reserve has seemingly used Brexit as an opportunity to push additional moves
further into an uncertain future. Clearly Europe and the U.K. will be in full accommodation mode
now; and Japan, the unfortunate recipient of the risk-off trade in currency markets, continues
to be in a very bad place on multiple fronts. So, higher asset prices, lower interest rates, and
continued economic malaise are likely to continue.
https://secure.wasmerschroeder.com/UserPages/1037492.pdf
Hercules Capital, Inc. :HTGC
Q2 2016 Earnings Call
Manuel Henriquez – Founder, Chairman and Chief Executive Officer
August 4, 2016 5:00 PM ET
Mark Harris – Chief Financial Officer in final Q & A
..As you know, the yield curve is flatting dramatically when you go further out.
So, I think that the short term of the curve is mispriced. We're hoping that as the market stabilized, that we'll see tightened yield spreads over the five-year rates. And once that occurs, I think that you'll definitely see us actively go out and refinance those 7% bonds you've been referring to which as I'm sure you'll realize in the event of refinancing those 7% bonds, that alone can be a 1 to 3 – sorry, $0.01 to $0.015 in quarterly earnings and prove it by resizing those bonds. But we'll make sure people understand this comment. The five-year treasury rate is acting like an Internet stock. Today alone, the five-year rate dropped nearly 4% to 1.03%. This is a five-year treasury rate. It's not supposed to be that volatile. That tells you what is going on. The 10-year rate is only 47 basis points wider than the five-year rate. That means I can borrow 10-year at 47 basis points higher plus the spread. That tells you that there's no incentive to the short-term borrowing in the capital markets right now.
http://seekingalpha.com/article/3996111-hercules-capitals-htgc-ceo-manuel-henriquez-q2-2016-results-earnings-call-transcript?part=single

Punch Bowl More than Half Full ?
Net flows into ETFs totaled $52.6B in July, according to FactSet, with just about every asset class seeing fresh money, particularly U.S. equities, which drew in $30.1B.
U.S. fixed-income saw a robust $11.6B of inflows - a possible source of concern for some analysts, noting high demand for both "risk-on" and "risk-off" assets. It wasn't just Treasurys though, as the data shows plenty of demand last month for investment-grade corporate paper, emerging-market bonds, and high-yield debt.
http://seekingalpha.com/news/3198724-etf-inflows-soar-july
Graphics from @Ted's original article from MarketWatch


http://seekingalpha.com/article/3994368-major-asset-classes-july-2016-performance-review
BEIJING (Reuters) - A raft of global risks that could adversely affect the United States remains on the horizon and requires close monitoring, Dallas Federal Reserve Bank President Robert Kaplan said on Tuesday.
Kaplan, along with several other Fed policymakers, has urged renewed caution in trying to lift rates again...
"I am closely monitoring how slowing growth, high levels of overcapacity and high levels of debt to GDP in major economies outside the U.S. might be impacting economic conditions in the U.S.," Kaplan said at an event in Beijing.
In his second appearance within a week, Kaplan, a centrist at the U.S. central bank, repeated that he continues to back tightening monetary policy in a gradual and patient manner.
Chief among his concerns is sluggish U.S. growth exacerbated by a changing world in which economies are more globally interconnected.
"It's going to take many years and maybe decades for China to manage through overcapacity and high levels of debt to GDP," Kaplan added. "I think sudden jarring traumas ... may make that adjustment more challenging."
On Monday New York Fed President William Dudley, a permanent voter on the Fed's rate-setting committee, said that while it was "premature" to rule out a rate increase this year, negative economic shocks were more likely than positive ones.
https://www.yahoo.com/news/feds-kaplan-urges-patience-raising-rates-points-global-115047772--business.html?ref=gs
A Brief Note From G M O's Ben Inkster in their 2nd Quater Newsletter
"So what can we do to protect portfolios ..."
"a deeper analysis of what led returns to be disappointing for
the asset classes that have lagged may help investors avoid the error of abandoning decent assets just when their time may be about to come."

This is the nature of the discount-rate-driven gains for asset classes such as equities, bonds, and real
estate. Beyond the discount rate change, it is still true that US equities have done surprisingly well,
emerging equities surprisingly badly, and so on. But even if those “surprises” are permanent (and
our guess is that for the most part they are not) the fact that the valuation of US equities has risen
guarantees that the future returns to US equities from here will be lower than they would have been
otherwise, and the same is true for all of the long-duration assets whose discount rates have fallen
over the period.
The most shocking hole that will be blown through people’s portfolios is if discount rates rise again
fairly quickly. Even if the circumstance is one in which the global economy is doing well, the impact
of a 1.5% increase in the discount rate on equities from here is a fall of over 30%, which would
almost certainly be enough to swamp the earnings impact of the decent growth. For bonds, of course,
there would be no possible counter to the discount rate effect. For a portfolio that is fully invested in
long-duration assets (i.e., consists of a combination of stocks, bonds, real estate, and private equity),
the possible performance implication is on the order of the falls experienced in the financial crisis –
perhaps a 20-33% fall depending on the weightings – despite the fact that the global economy was doing just fine.
So what can we do to protect portfolios against this possibility? One answer would be to hold cash, which, as a zero-duration asset, would be a beneficiary of rising discount rates. The trouble with cash, of course, is that if the discount rates do not rise, it is doomed to deliver little or nothing. What
we would ideally like is to hold a short-duration risk asset – one where if nothing changes we are getting paid a decent return but where a rising discount rate will not destroy multiple years’ worth of
returns. We believe alternatives fit the bill pretty well. If things hold together, we should expect to
make money from activities such as merger arbitrage or exploiting carry trades or global macro. If the
world does surprisingly well and causes investors to raise their expectations for discount rates, these
strategies should be largely unaffected and could still make money. If we head into a severe recession
or financial crisis, they will presumably lose money, as we saw in 2008, but that is no different from
other risk assets. To be clear, I’m not arguing that the returns to alternatives are likely to be a lot
higher than we have seen since 2009-10. Alternatives have been mildly disappointing since 2009, doing almost 1% worse than one might have expected. The more sobering truth is that the 4.2% return they have achieved since then simply looks pretty good given the other choices on offer, and
their lack of vulnerability to rising discount rates is a comfort in a world where almost everything in
a traditional portfolio is acutely vulnerable to discount rate rises should they happen.
Today does not look like a great opportunity to reach for risk, despite the temptation in the face of unprecedentedly unattractive yields on government debt.....
The charm of alternatives today is that we believe they should perform similarly in either the
temporary or permanent shift scenario, and there are almost no other assets with expected returns
above cash for which that is the case. The problem with alternatives is that they are more complicated
to manage than traditional assets, generally have higher fees associated with them, and require more
oversight. Normally, those problems are enough to make them less appealing than traditional risk
assets such as equities and credit. Today, however, they seem well worth the extra effort. Their
generally disappointing performance over recent years, rather than a sign to dump them once and for
all, should probably be recognized as a signal of their potential utility in the market environment we face in the coming years.
There is no panacea for the low returns implied by asset valuations today. Anyone suggesting
differently is either fooling themselves or trying to fool you. But piling into the assets that have been the biggest help to portfolios over the past several years, as tempting as it may be, is probably an even worse idea than it usually is. And a deeper analysis of what led returns to be disappointing for
the asset classes that have lagged may help investors avoid the error of abandoning decent assets just when their time may be about to come.
https://www.gmo.com/docs/default-source/public-commentary/gmo-quarterly-letter.pdf?sfvrsn=30
A Q R funds
http://quicktake.morningstar.com/fundfamily/aqr-funds/0C000021ZL/fund-list.aspx
Arbitrage funds
http://quicktake.morningstar.com/fundfamily/arbitrage-fund/0C00001YYL/snapshot.aspx
Long-Short Equity: Total Returns
http://news.morningstar.com/fund-category-returns/long-short-equity/$FOCA$LO.aspx
Multialternative: Total Returns
http://news.morningstar.com/fund-category-returns/multialternative/$FOCA$GY.aspx

David, I agree with you on this. Some folks can afford to "sell everything". They already have "everything" and probably do not need to have money at risk anyway. As for Mr. Poobah, the money he makes as a manager of his funds, in addition to the money he makes as an owner of DoubleLine Capital, and gosh know what else, is more than enough to allow him to "sell everything" in his own portfolio, billions of dollars worth that it is. And other posters hit a good point regarding Mr. Poobah's celebrity status and over-exposure in the media. He makes Mr. Gross look like a piker.

@DanHardy
Yes, relative to new and future retirees. If the 10 year moves sideways from this point in a narrow channel for yield; total return (which includes price movement) would be muted.
Any search for yield must be carefully weighed against from where the yield arrives and why; as well as what circumstances going forward will alter the yield.
Not unlike today and U.S. investment grade bond yields; I'm not concentrated upon the fact that the yield continues to move lower, as the underlying price performance is far out pacing the yield.
At this time our house is not chasing any yield for income, but yield (downward) for price performance.
Total return on any given investment, while attempting to prevent loss of capital continues as our primary focus.
Sideways movement of pricing for any investment is a possibility for extended periods of time. So, those expecting and wanting performance from equity investments can also get stuck in sideways price movements. Obviously, total return becomes diminished, regardless of the investment area.
Retirees who have chosen to not be involved with investments in the stock/bond markets find themselves stuck with the choice of a CD or similar. We know what these returns will be at this time. Annuities currently are unable to offer returns of consequence (although some folks might find other aspects appealing).
Pension funds and some large institutions are looking everywhere to provide for their future needs. Many of these organizations have finally begun to pull away from the fancy hedge fund promises and fees. The "alt" investments folks are also clawing to prove they know what their doing with "other peoples money". The enormous California retirement fund reported a "year to year" (June 30) total return of .62%. Batman would surely do a "holy crap" for this folly.
Central banks globally continue to "play". Bank of Japan recently did not further reduce bond yields with market intervention, but expanded their ability to purchase Japanese market etf's (equity) specifically designed for the Bank of Japan to purchase. The ECB, among other ongoing purchases is also purchasing eurozone corporate bonds. I have no idea with what our Federal Reserve is involved within the market place.
Gotta go help at high school band camp.
Most interesting times continue.....
Catch

FYI: Jeffrey Gundlach, the chief executive of DoubleLine Capital, said on Friday that many asset classes look frothy and his firm continues to hold gold, a traditional safe-haven, along with gold miner stocks.
Regards,
Ted
http://www.reuters.com/article/funds-doubleline-gundlach-idUSL1N1AF1XE

There was a possibility that VG may have added one more shop to manage part of the funds as they have done in other cases. But the manager's exceptional performance made them stay put and close ( joining the ranks of closed funds vpccx, vhcox, vpmcx as far as I know)

Unlike Primecap, Capital Opportunity, and Primecap Core, Dividend Growth is even closed to Vanguard Flagship members that do not already have an existing position.
Regarding adding another outside firm to manage part of the assets, something tells me that Wellington Management or Primecap Management would not allow it.
Mona

@JohnChisum, Like you I am facing the same issues with bonds. Perhaps I am a bit early, I reallocated high yield and emerging market debts to US investment grade bonds, intermediate term. Also I am keeping some in Vanguard Total Bond Index In my 401(K). I also notice that some balanced fund such as TRP Capital Appreciation, PRCWX, has reduced bond allocation while holding double digit in cash. Are they telling us something?

Plenty More Lined Up. With Better Ideas ?
Steve Cohen and the Infinite Monkey Theorem
By Michael P Regan a Bloomberg Gadfly columnist covering equities and financial services. Jul 27, 2016 2:05 PM CDT
.. this theory came to mind while reading a Wall Street Journal article about how Steve Cohen is investing in a hedge fund run by investment firm Quantopian, which provides money to amateur quants who come up with profitable computerized trading strategies. These aren't exactly monkeys, of course; they're obviously much smarter. (The article mentions mechanical engineers and nuclear scientists.) But the idea is similar: Give enough people the right tools, and eventually you'll get Shakespeare. Or in this case, something even better: market-beating trading algorithms.
Some 85,000 quant wannabes reportedly have signed up from 180 countries and created more than 400,000 algorithms trading U.S. stocks on the platform, and 10 have been selected to trade a few thousand dollars.
.. It may be tempting to roll your eyes and dismiss the initiative as some sort of gimmick. That would be a mistake that ignores how much technology has democratized all manner of business models that previously had high barriers to entry
And if you wanted to be the manager of a quant fund? Well, now it sounds as if Cohen and his crew are interested in knocking down those barriers to entry that stood in the way for a long time -- namely access to millions, or hundreds of millions of dollars, in capital. This will most likely inspire even more to storm the gates than the 85,000 that have already done so. Perhaps the only surprising part of this development is that it took this long to happen.
http://www.bloomberg.com/gadfly/articles/2016-07-27/steve-cohen-and-the-infinite-monkey-hedge-fund-managers

A few you should look at:
Matthews Pacific Tiger, Artisan Intl Value, Capital World Growth&Income (American funds), Polaris Global Value, Vanguard Intl Growth, Artisan Global Equity, Artisan Global Value
I have been investing in Matthews Pacific Tiger for 5 years, and have been happy with it.

You're 5 months late John. The time to load up on energy-heavy funds was in February when oil bottomed around $26. By my crude calculation it's now up about 70% from those lows. As I wrote on May 3: "I suspect the big gains in NR & energy are over for the year, but remain optimistic for PRNEX (and natural resources in general) looking out two or three years." http://www.mutualfundobserver.com/discuss/discussion/comment/77459/#Comment_77459
On that day (May 3) oil closed around $43-44 and PRNEX (the fund mentioned in the post) was sitting at about $32. That's about where both are today. So neither has moved much. In the intervening months since that post, oil touched $50 and PRNEX approached $35. I sold another 25% of PRNEX at the higher prices, so now have only a small position.
Energy analysts are divided of course, but there seems to be some consensus that oil will be in the $60 range in a couple years. Unfortunately, a 2-year time horizon seems very long for some. So John, you'll probably get paid to wait - but your gains will come in drips and drabs.

I recently took a position in GRMRX, not for its income, although it does distribute quarterly, but for capital appreciation. This global RE fund has a fine three-year record and I really liked their write-up on momentum investing on their site. The RE fund has low turnover despite the suggestion in its name. Very responsive sales team who quickly signaled Schwab that I was OK. I think the Gerstein-Fisher funds deserve an MFO profile.

Hi Guys,
I’m a little amazed by how often referenced articles and posts interact with one another.
Just today, this article on Marc Faber and the 10 Laws of Wealth piece have that interconnected character. Here is the internal Link to the 10 laws article:
http://www.mutualfundobserver.com/discuss/discussion/28733/these-10-laws-of-wealth-can-help-you-hold-on-to-investment-gains
There really are no unexpected recommendations in this listing. Rule 4, “Forecasting is for weathermen”, is relevant for the Faber reference. Forecasters do hazardous duty and are challenged to score a 50% accuracy. Actually, weathermen have a much better record than financial wizards. Faber falls into that lower success ratio cohort. Here is the CXO Advisory Group Guru grade ratings:
https://www.cxoadvisory.com/gurus/
Based on a large number of predictions over an extended timeframe, Faber’s record is rather unimpressive. He scored at the 45% correct level. CXO asked the following: “Marc Faber: Nabob of Negativism?” My answer is a firm yes to that question.
Faber seems to always recommend a rather large portfolio asset allocation to Gold holdings, sometimes as high as 25%.
If that allocation is scraped from the fixed income portion of the portfolio (equities sort of held constant), overall portfolio returns should not suffer too much, and the portfolio’s standard deviation should be greatly reduced.
I loosely checked the numbers over several timeframes with Gold ranging from the 10% to the 25% portfolio weightings to verify my speculation. The few numbers I made confirmed my perspective. Please note that I do not do Gold in my portfolio.
Best Regards.

I really don't give Tgt-funds a thought until I see a thread about them.
Besides the cost, don't like their allocations based on the age of the investor, rather than the cheapness/dearness of the sundry assets they invest in. -- The capital-markets don't know or care how far away from retirement we are. Consequently, its my bull-headed belief that we investors should very much care how richly/cheaply priced the assets we are buying/holding are.
Observation (not related to any posters here, but just generally): So many investors are proudly 'cost-conscious', but then intentionally invest in a manner which is not 'price-conscious'. Tgt-funds seem to assiduously cling to that latter behavior.
Lastly, I find it telling that the companies offering tgt-funds populate them with their OWN proprietary funds. No fund company, not Vanguard, Fidelity, TRowe, etc., own a monopoly of above average funds. Given that, if the tgt-fund provider had their investors' best interest front-and-center, they should arrange to populate tgt-funds with the best available funds, even if some are NOT in-house. That they don't do so, suggests to me, underlying basis for marketing tgt-funds is not to better serve investors, but to amass and keep-in-place as many AUM across their fund complex (yes, a shock, I know!!). -- And to do so by catering to many retail investors who prefer to not have to think too hard about investing.
So... still not interested in them.

FYI: One of the biggest challenges for gold as an investment is that, like cash, it doesn't really generate income.
When there are bonds and stocks out there that offer interest and dividend yields to offset the risk of any fall in capital values, why choose a shiny metal that's a pure punt on price movements?
Regards,
Ted
http://www.bloomberg.com/gadfly/articles/2016-07-22/gold-s-9-2-trillion-tailwind

Sort of. You can find the SEC formulas as instructions to Item 26 in this form:
https://www.sec.gov/about/forms/formn-1a.pdf
The 7 day yield is the actual income (excluding cap gains) earned on an investment in a MMF over a period of seven days (i.e. after expenses are subtracted), multiplied by 365/7. So it is more or less a simple interest rate calculated over a year - what a bank would call APR.
Not quite a true annualized figure, because an actual investment would have compounded yield - what a bank would call APY. The second equation in the form gives this value; it defines effective yield.

So says the the guru that proclaimed junk bonds were in extreme valuation back in February. A *lot* of upside since February and all time highs nearly everyday this month. Like all gurus and experts, Mr Fridson will be proven correct at some point and the market will react accordingly. But exactly when in the distant future will this occur?? As an aside, have been posting over at Bogleheads lately. It is a little more heavily policed over there. Makes you appreciate David's more tolerant handling of the postings here at MFO. But overall, I enjoy the Bogelhead forum, especially all the discussions on retirement.
http://blogs.barrons.com/incomeinvesting/2016/07/19/fridson-post-brexit-high-yield-overvaluation-is-staggering/?mod=BOL_hp_blog_ii
Veteran high yield analyst Marty Fridson, chief investment officer of Lehmann Livian Fridson Advisors, used the word “staggering” in his analysis of high yield overvaluation Tuesday.
http://wolfstreet.com/2015/04/23/strategy-will-succeed-until-it-fails-junk-bond-guru-marty-fridson/
“The extreme overvaluation of the high-yield market, initially observed in February, persisted in March,” Martin Fridson, Chief Investment Officer of Lehmann Livian Fridson Advisors, wrote in his column on S&P Capital IQ/LCD. Based on the firm’s econometric modeling methodology, junk bonds have been overvalued, though not at this extreme level, since mid-2012:

Hi Junkster,
It is indeed possible that I missed your point. I read and responded to your post after midnight, and that’s well beyond my normal bedtime.
But I remain puzzled by the emphasis that you and others place on the fact that stock dividends fell below long term treasuries in 1957. Total annual returns are the pertinent measure of any investment’s anticipated value.
I generally don’t sweat the finer details because bottom-line outcomes matter most. As an amateur investor, I frequently don’t know the finer details. If I did know those finer points, I would likely make errors in properly assessing them.
The data from the time period that you called attention to demonstrate the unpredictable volatility of various asset class returns. In 1960, bonds outdistanced the S&P 500 return by a whooping 11.64% to 0.34%. In the next year, a more conventional return to normal occurred. In 1961, stocks returned 26.64% while the 10-year treasuries delivered 2.06%. I doubt that very many market gurus projected these sudden changes; surely far fewer projected both outcomes.
The economic environment does change. But the public’s emotional reactions to the marketplace change far more quickly and unpredictably. As Phil Tetlock’s research proves time and time again, forecasting is a truly hazardous business. Repeat winners are rare birds.
Do you remember Elaine Garzarelli? She became a hero based on her accurate Black Monday call decades ago. Her subsequent predictions, however, were much less prescient. An analysis of her market predictions between 1987 and 1996 found her to be right only five out of thirteen times, But she’s a survivor. She is currently running Garzarelli Capital. Her predictions both then and now are based on a 13 factor model. Over time that model has been revised in terms of weightings on each factor.
Nobody can predict the future with statistical accuracy trustworthy enough to make major portfolio adjustments. As John Kenneth Galbraith said: “The only function of economic forecasting is to make astrology look respectable.” In his book, “Contrarian Investment Strategies”, David Dremen concluded that forecasters are wrong 75% of the time. Trust these charlatans at your risk.
In "The Black Swan," Mr. Taleb controversially recommends a "barbell" strategy. In that strategy, investors put 90% of their portfolios in extremely safe instruments, maybe like Treasury bills. The other 10% is committed to highly speculative products with potentially outsized rewards, perhaps options. It takes a lot of investing know-how and confidence to successfully deploy that strategy. I suspect that you might use some variation of Taleb’s barbell approach.
Not many investors can follow that course (that’s not me and I am definitely not referring to you). The problem is that many folks mistake luck for competence.
Thanks for the references.
Best Wishes.

FYI: Bond King” Jeff Gundlach may be losing his fixed-income mojo! A recent Fortune.com article reports that the prominent bond guru, who founded DoubleLine Capital, is underperforming his peers and the benchmark Barclays Aggregate Bond Index.
The DoubleLine Total Return Bond Fund DBLTX, -0.09% is among the bottom tier of comparable funds, according to recent ranking of bond funds compiled by Morningstar
Regards,
Ted
http://www.marketwatch.com/story/gundlach-in-jeopardy-of-losing-bond-king-crown-2016-07-15/print

FYI: Latin American mutual funds are making beautiful music this year after lagging the broad U.S. stock markets for much of the past 10 years.
Funds tracking stocks in Olympics-host-to-be Brazil, as well as in Mexico and other Latin American countries, are up 31.05% on average so far this year, going into Friday, according to Lipper Inc. That's attracting a very thorough look-see from investors who are seeking gains in the diversified portion of the portfolios
Regards,
Ted
http://www.investors.com/etfs-and-funds/mutual-funds/latin-american-stocks-are-hot-hot-hot-but-can-it-last/