This is a rather tiresome old-fashioned view on SRI and ESG--environmental social and governance--based investing that has been refuted by academic evidence. Click here: https://institutional.deutscheawm.com/content/_media/Sustainable_Investing_2012.pdf
A key excerpt from this report is the following:
"100% of the academic studies agree that companies with high ratings for CSR and ESG factors have a lower cost of capital in terms of debt (loans and bonds) and equity. In effect, the market recognizes that these companies are lower risk than other companies and rewards them accordingly....
89% of the studies we examined show that companies with high ratings for ESG factors exhibit market-based outperformance, while 85% of the studies show these types of company’s exhibit accounting-based outperformance. Here again, the market is showing correlation between financial performance of companies and what it perceives as advantageous ESG strategies, at least over the medium (3-5 years) to long term (5-10 years)."
In fact, I think the idea that "personal beliefs don't belong in your retirement account" actually is a reflection of the personal beliefs of many of the authors who routinely bash SRI/ESG without looking at the academic evidence, revealing their own biases. The fact is trillions of dollars are now invested globally according to some sort of SRI/ESG principles with little negative effects and in many cases positive ones:
fa-mag.com/news/sri-assets-up-76--since-2012--study-says-19953.html

http://www.sec.gov/Archives/edgar/data/916006/000119312515307686/d50199d497.htm
497 1 d50199d497.htm BRIDGEWAY FUNDS INC.
Bridgeway Funds, Inc.
Large-Cap Growth Fund (BRLGX)
Supplement dated August 31, 2015 to the Prospectus dated October 31, 2014
and to the Statement of Additional Information (“SAI”)
dated October 31, 2014, as supplemented May 29, 2015
At a meeting of the Board of Directors (the “Board”) of Bridgeway Funds, Inc. (the “Company”) held on August 27, 2015, the Board approved the reorganization (the “Reorganization”) of the Large-Cap Growth Fund (the “Bridgeway Fund”) into the American Beacon Bridgeway Large Cap Growth Fund (the “New Fund”), a newly created series of American Beacon Funds (the “Trust”). The Board determined that the Reorganization is in the best interests of the Bridgeway Fund and its shareholders. The Board also approved a form of Agreement and Plan of Reorganization and Termination (the “Plan”) between the Company, on behalf of the Bridgeway Fund, and the Trust, on behalf of the New Fund, under which the Reorganization will take effect. The Plan provides for the Bridgeway Fund to transfer of all of its assets to the New Fund in exchange for Institutional Class shares of the New Fund, which would be distributed pro rata by the Bridgeway Fund to the holders of its shares in complete liquidation of the Bridgeway Fund, and the assumption by the New Fund of all the liabilities of the Bridgeway Fund. The Plan is subject to shareholder approval as described below.
The effect of the Reorganization is that the Bridgeway Fund’s shareholders will become shareholders of the New Fund. Bridgeway Fund shareholders will receive shares of the New Fund equal in number and value to their shares of the Bridgeway Fund on the closing date of the Reorganization. The Reorganization is expected to be tax-free to the Bridgeway Fund and its shareholders.
The New Fund is designed to be substantially identical from an investment perspective to the Bridgeway Fund. American Beacon Advisors, Inc. will serve as the New Fund’s investment manager and Bridgeway Capital Management, Inc. (“Bridgeway”), the Bridgeway Fund’s investment adviser, will serve as the New Fund’s investment sub-adviser. After the Reorganization, the New Fund will be managed by the same investment management team that is currently responsible for the day-to-day portfolio management of the Bridgeway Fund.
The Plan requires the approval of the shareholders of the Bridgeway Fund. A special shareholder meeting is being called for that purpose and shareholders of the Bridgeway Fund will receive proxy solicitation materials providing them with information about the New Fund (including, among other things, its investment objective, strategies, policies, risks, fees and expenses, and management), the terms of the Plan, and the factors the Board considered in deciding to approve the Plan. If Bridgeway Fund’s shareholders approve the Plan, the Reorganization is expected to take effect in the fourth quarter of 2015. Shareholders should be on the lookout for the proxy solicitation materials, which will arrive by mail. Your vote is very important; please review the materials when they arrive and submit your vote by the deadline.
Please retain this supplement for future reference.

@mcmarasco
"Does anyone know anything about the Voya versions (virtual clones) of PRWCX (ITRAX / ITRIX / ITCSX / ITCTX)? They are open according to M*, but can the average investor purchase them???"
According to test trades I just made, these clones are not available at WellsTrade, Fidelity, TDAmeritrade, Scottrade and Firstrade. I still think that the most attractive option is to get a friend or acquaintance of yours to gift you a share between taxable accounts at a given brokerage.
Kevin

This is a fund designed for tax advantaged accounts. One finds it in individual variable annuities, college 403(b) plans, etc. So the question is: how desperate are you to purchase a PRWCX clone?
You can purchase the ADV class (ITRAX, 1.24% ER) through a Voya Preferred Advantage VA. The annuity itself adds another 0.60% fee. IMHO, that's too high a total cost - the 0.60% annuity fee is about the same as Schwab's, but you're paying up for the fund (it's tacking on a 0.75% 12b-1 fee).
On the plus side, the annuity has no withdrawal fees, the min for the whole VA (all investments) is $5K, and the annual maintenance fee is waived with a relatively low $15K balance. Also, the contract is relatively straightfoward - 50 pages plus fund descriptions, which may sound like a lot, but most of this is required to describe a basic annuity; no bells or whistles.)
Another option is to invest in AZL T. Rowe Price Capital Appreciation. A combined (print) page with all the M* info is here (scroll past the nonexistent analyst report for the rest of the info).
You can purchase this inside the Allianz Retirement Pro® VA. This is a low cost VA, rated one of the top 10 traditional VAs by Barron's a couple of years ago, along with Vanguard/Monumental Life), Fidelity, TIAA-CREF (see embedded graphic) - Top 50 Annuities, May 27, 2013.
The VA costs 0.30% (Base Account, not the Income Advantage Account, which is a more restrictive and costly GLWB rider). The Class 2 shares of the PRWCX clone have an ER of 1.05%, for a combined cost of 1.35%, 1/2% below the ING offering, but still not cheap.
This annuity requires a min of $75K (across all investments), and charges an annual maintenance fee unless the balance is above $100K.
I don't suggest investing in these clones, but since the question was raised about how the average investor purchases them, there you have it. It is possible that other retail annuities offer these clones, though I am doubtful, because these seem to be proprietary clones offered through proprietary VAs (e.g. Voya clone offered through Voya VA).

FYI: If you're an investor looking to boost income rather than long-term growth, you have a ton of great options. Many well-crafted mutual funds are designed to help income investors meet their objectives, whether it be for retirement or to just have some extra cash on hand.
Some of these funds are pure income plays designed for those in or near retirement, while others also offer some nice capital appreciation
Regards,
Ted
http://www.csmonitor.com/Business/Saving-Money/2015/0825/Ten-solid-mutual-funds-for-income-investors

I want to thank each of you very much for your detailed and thoughtful comments. I'm always impressed reading about the strategies that each of you employ. I've got a lot to learn. Thanks in particular to Scott, Press,and Old Skeet for the discussion of specific ideas and links. Gives me some great weekend reading for strategy development!
Scott, I'm quite intrigued by your discussion of real estate investments. You clearly know this area well. If I'm somewhat limited in the amount of capital currently available I'm wondering if it might be better to with a REIT fund vs. individual names. Are there specific funds that you like a great deal in this area? If not, I can do some research on the names that you list above and perhaps just buy small positions across a few stocks. I'm also reading up on Ecolab based on your earlier posts. That also looks quite interesting. thanks so much again everyone!
Good article on dividend payers in Morningstar today -- http://www.morningstar.com/cover/videocenter.aspx?id=712994

Thanks!
I think my issue - and I emphasize that this is a me thing - is that I don't want a lot of retail and I don't want apartments. The latter is more an instance of "at this time" and the former is more of a long-term view. I've thought for a long time that - in terms of retail - the highest quality and most innovative operators will succeed. I also have no interest in hotel REITs.
I think "dime-a-dozen" mall operators will struggle or go. DDR - which was obliterated in 2008 and is still nowhere remotely near its pre-2008 levels - is an example of what I don't want. Simon Property took its strip malls and spun them off into a different company. We are overbuilt on retail in this country and one of the reasons (among many) that I've never really been enamored with the Sears bull thesis.
"Consider this: The number of enclosed shopping malls with a vacancy rate at or above 40% – the point at which malls typically enter their death throes – has more than tripled since 2006. Nearly 15% of all enclosed malls are suffering from a vacancy rate between 10% and 40%, according to Green Street Advisors" (http://www.wallstreetdaily.com/2015/03/11/mall-reit-simon-property-group/)
I like Tanger Outlets (SKT) due to management and due to the fact that people like the high-end outlet concept. Go to one of these high-end outlet malls on a weekend and they're jammed. Go to one of them on a particularly busy period (when people are doing back to school shopping or Christmas shopping) and they're a mob scene. At least that I've seen.
General Growth (which I have exposure to via Brookfield Property) and Simon (SPG) are fine, with the latter also having a significant portfolio of premium outlets. So, I'm not a fan of malls. I do think that some large, quality operators will innovate and continue to succeed, but I really, really don't want much exposure to malls and I don't want strip malls/dime-a-dozen malls.
Retail Opportunity (ROIC), which I mentioned above, is somewhat different from the fact that it is retail, but with need-based anchors (drug stores and grocery stores), which I think gives that some level of defensiveness.
I think apartments in major cities are a compelling investment with high barriers to entry and people have to live somewhere. That said, I don't feel comfortable investing in apartment REITs with apartment rents at absolute record highs that don't feel terribly sustainable over the long-term. I like things like Equity Residential (EQR), but I have no interest in them at these levels. Again, longer-term I think quality apartments in major cities are great, but they'd need to come down quite a bit to get to an interesting entry point.
I don't own it, but I'm slightly interested in things like Lamar Advertising (LAMR), a REIT that is basically outdoor/indoor advertising spaces. I do think that with the rise of mobile phones, people who are waiting at the airport and elsewhere will have an increasingly larger level of interactivity with advertisements on a daily basis. Their website is pretty ridiculous, you can literally see every advertising space they own. I'm not looking to add to much of anything right now, but I may explore this further. There are only a few major billboard companies and those few enjoy the majority of market share. Also, regulations may limit new competition. This wasn't a REIT until a year or two ago. The real big problem here in the short-to-mid term is that it is at its core .... advertising. In a 2008 situation, this will get obliterated. Longer-term I do think outdoor advertising may become a more and more compelling space as there is more and more interactivity due to smartphones - someone's sitting at an airport and they can scan a cereal poster with their phone for a coupon and when they use their mobile wallet to buy the cereal the coupon will already be there. We're not there yet, but I think it's an eventuality.
Not a fan of hotel REITs not because, I mean, look at 2008. Many of these companies bought right into the top and not only were the shares rocked, many either cut or eliminated dividends, with some not bringing dividends back for years after - see Strategic Hotels and Resorts - while that is now entertaining a possible sale, it was $23 in 2007 and $1 by 2008 and never reinstated its dividend. Are hotels in major cities interesting in terms of barriers to entry? In theory, but geez, these are economically super-sensitive.
I like high quality office space in major metropolitan areas. Brookfield (BPY, or BAM if you want to go with the parent if you don't want to deal with a partnership) is an example. Vornado is a great example, but I think a lot of REITs ran up to a silly degree earlier this year because of a hunt for yield. Vornado's move towards $120 was way overdone and $78-82 is more fair value.
As with healthcare in general, I think healthcare REITs will continue to do well and a number of names have been unfairly taken lower. I like Ventas (VTR), but HCP, HCN and Omega Healthcare are other options. I like Industrial/warehouse, although I don't think there's tons of names that grab my interest.
Triple Nets (WPC, O) have been taken down to points where they're compelling.
Certainly, in the shorter term there's a good deal that depends on the Fed rate hike and if the Fed does hike rates in September or December you may get a better opportunity for income names.
As for income names, Pipelines have been unfairly obliterated by the combo of interest rate fears and concerns over anything oil-related. Inter Pipeline (IPPLF) just reported a record quarter and is down considerably. Quality MLPs (EPD, MMP) are down enormously and I just don't think the state of the business for these companies suggest the declines that have been seen.
As for Ecolab, that's absolutely never going to be a home run. What I want is something that I think offers a high degree of consistency and whose business provides a need in both good times and bad. It's raised the dividend every year for 30+ years. The water aspect of Ecolab (ECL) is a core element of why I find it attractive, but the company works for me on a number of levels - as for hygiene and sanitation, hospitality/restaurant and other businesses have to maintain standards in good times and bad. (http://www.ecolab.com/about/our-businesses.) Again, I'm not looking for a home run with Ecolab by any means, I'm looking for something that I think works for a number of themes and I think will be consistent and relatively boring over the long haul.

Not sure what the 'apples to donuts' mean comment means?
Gundlach, Gross, & Fuss all manage debt portfolios. Its true that Fuss and Gross' main vehicles provide them a wider field to deploy capital than does Gundlach's mortgage fund (i.e. DBLTX, DLTNX) -- presumably a wider latitude of investments should provide an opportunity for those managers to persistently outperform. --- Has it? All 3 decide on what degrees of credit- and interest-rate risk they wish to be exposed to, every single day. No one held a gun to Gross’ head and forced him to engage in (apparent-) naked put-writing. No one forced Mr. Fuss to hold non-USD obligations. They placed their bets, Gundlach placed his. The results speak for themselves.
If it is 'apples vs donuts', Gundlach would seem to be the (healthy) apple, with the others (presently) representing the deep-fried donuts...

I want to thank each of you very much for your detailed and thoughtful comments. I'm always impressed reading about the strategies that each of you employ. I've got a lot to learn. Thanks in particular to Scott, Press,and Old Skeet for the discussion of specific ideas and links. Gives me some great weekend reading for strategy development!
Scott, I'm quite intrigued by your discussion of real estate investments. You clearly know this area well. If I'm somewhat limited in the amount of capital currently available I'm wondering if it might be better to with a REIT fund vs. individual names. Are there specific funds that you like a great deal in this area? If not, I can do some research on the names that you list above and perhaps just buy small positions across a few stocks. I'm also reading up on Ecolab based on your earlier posts. That also looks quite interesting. thanks so much again everyone!
Good article on dividend payers in Morningstar today -- http://www.morningstar.com/cover/videocenter.aspx?id=712994

Still can't seem to post the full thing I wrote out and couldn't include this in the above w/o getting an error, but just to throw a list out of the rest w/o the commentary I'd written: Vornado/Boston Properties (VNO/BXP, although I wouldn't recommend them until they come down further), Retail Opportunity Investment Corp (ROIC), Brookfield Property Partners (BPY) or parent company Brookfield Asset Management is an excellent idea if you don't want the paperwork of BPY), Tanger Factory Outlet (SKT, while I don't like retail, a well-managed high-end outlet mall REIT that held up surprisingly well in 2007/2008) , Colony Capital (CLNY, not going to do much, but should be stable high yielder), WP Carey (WPC) and Howard Hughes (HHC, no yield now, possibly in the future, http://www.forbes.com/sites/antoinegara/2015/05/06/bill-ackman-baby-buffett-howard-hughes/)

Michael...if you like the idea of divi payors, pay close attention to what Scott recommends for reits...in your deferred account. Always do your own research, but it's worked nicely for me. That's a nice addition to a portfolio.

Personally in regards to real estate, things that come to mind in the moment - may be others, but just throwing some things out... as noted above, always do your own research.
No particular order:
1. Starwood Property (STWD) Somewhat dull, excellent management, not going to be a home run ever but high income that I have a degree of confidence will remain stable and grow. Will benefit from rising rates and the presentation on the company's website has outlined how much they will benefit.
2. Ventas (VTR) Has been obliterated, but high-quality healthcare REIT that is somewhat cheaper in the literal sense now after they did a spin-off. I'm not against the major names in healthcare REITs, but feel Ventas is particularly high quality.
3. Kennedy Wilson (KW). Not much of a yield, but interesting integrated real estate company (not a REIT) that owns real estate and provides services (auctions, etc.) Somewhat volatile. Famed investor Prem Watsa's Fairfax Financial had a large stake in Kennedy Wilson (although I believe a significant amount and possibly all of it is convertible preferred) as of recently, I'm not sure what the stake is at this point. From the end of 2014 letter: "We have invested $629 million in real estate investments with Kennedy Wilson over the last five years. Through
refinancings, sale of some loan portfolios and gains on hedging contracts on Japanese yen, we have received
distributions of $465 million. Our total net cash investment in real estate investments with Kennedy Wilson is
therefore now $164 million, and that investment is probably worth about $350 million. We have yet to sell though,
while our cash flow return of 11.2% is very acceptable. Also, we continue to own 10.7% of Kennedy Wilson
(11.5 million shares): our cost was $11.90 per share, and the shares are currently trading at $26.19."
--
4. Equity Lifestyle Properties (ELS). Sam Zell chaired REIT that is heavily into RV/campground/retirement communities. Lots of waterfront/near water land. Compelling (while not everyone is going to be into RVs, where the land is is the thing) but not cheap at all and not a great dividend. Still, unique and worth having on radar.
I'm trying to post the rest of this but it's not letting me, I keep getting an error.

"As an FYI...If I had things to do over again, I would have started earlier with my income sleeve consisting of dividend paying stocks. Even holding things like JNJ, PAYX, AEP as examples for the last 5 years, I have been astounded with the power of compounding dividends....and when stocks are down, is the perfect time to buy the dividend payers. That's a hint, BTW."
I'll second this....
"Hindsight is always 20-20. No one can predict the future. Make decisions in the present and be at peace with yourself they are the right ones"
...and this.
----
Most of what I own are in individual names, but there are also some mutual funds and a couple of other things, like RIT Capital Partners (http://www.ritcap.com/our-team)
For me, investing is largely a mixture of income and growth, with names that I find attractive/fall into themes that I'm interested or have other aspects that I find compelling. As I've noted before, I particularly like tangible assets (railroads, infrastructure, real estate) and needs (healthcare being a core focus there, along with things like Ecolab.)
There are large dividend payers (Starwood Property, Blackstone, etc), medium dividend payers and small dividend payers that will hopefully grow the dividend over time.
I do feel very strongly about what I consider a portfolio of best ideas. Oddly, I find owning individual names that I have a strong thesis about less stressful than owning funds because there is that connection and thesis.
Personally, while a day like Monday was disappointing and a bummer, with mostly individual names that I consider a collection of "best ideas" (and my best ideas are not going to be someone else's and that's fine), I wasn't like....

.... because I don't plan on selling these names or trying to time them (and a number of them I see as potentially multi-decade holdings.)
I am younger than most on the board and am heavily stocks. I do not recommend that those who are in retirement or nearing retirement allocate in the manner that I do, although I do think there are holdings of mine that are conservative, including Ecolab (ECL)
But yeah, I agree with what Press said: "Your choice is to put it in all at once per Ted's advice....which is sound if you have 10-15 years until retirement, or to invest in increments. Frankly, if you break it down, don't break it down too finely...1/3 or 1/2 at a time.
But you need to get it in play being that far out from retirement. If you see 2 big down days in a row, hold your nose and put the order in."

Hello all,
I greatly appreciate the dialogue from members on MFO as I learn from each of you on a daily basis. I was hoping to get your advice. With the market turmoil, I reduced my stock fund holdings % in my 401K account down to about 50%. I did this two weeks ago. While I was able to avoid some of the carnage, I am now faced with needing to develop a strategy for increasing my stock holdings back up to their target allocation. I am 10-15 years away from retirement and my target allocation is 75% stocks and 25% bonds(38% S&P index, 16% small cap index, 21% international fund index, 20% short-term U.S. Treasury security index, 5% Barclays Capital U.S. Aggregate Bond Index).
I wanted to ask your advice on a strategy for gradually increasing my stock holdings back to their target allocation. I am thinking about increasing this gradually -- perhaps from 50% to 60% and then 60%-70% and finally 70-75%. I could make these moves on a weekly or monthly basis. Would value your advice on whether this makes sense or if you would suggest a different approach. Also, please let me know if you have any thoughts on my asset allocation. I am a member of the governments thrift savings plan so I can only choose their index funds.
thank you!
Michael

I need a "bear fund" like I need a hole in my head. However, there are options out there in the fund universe for those who feel they can time markets consistently. Here's the Pro Funds link. Would expect fees and minimums to be high. However, compared to the huge gains to be made with good speculative calls, fees should seem trivial. http://www.profunds.com/funds/
Gotta like this: "ProFunds' indexed mutual fund portfolios were designed to accommodate frequent trading and large movements of assets in and out of the ProFunds. ProFunds seeks to invest cash flows on a daily basis in order to remain fully invested and minimize the impact of frequent trading."

Sven said, "In this low yield environment, there are really few viable choices." I think that kind of says it all.
What surprises me a bit is how poorly many income-oriented funds like RPSIX (down) and DODIX (flat) are performing YTD in this environment. Apparently, their meager gains on Treasuries are being eaten up by losses in HY, and (in the case of RPSIX) equities and non-dollar holdings. And yes - in this very low rate environment the fees once seen as reasonable become onerous.
Generally, the kind of year we've had in equities and commodities would benefit intermediate and longer term Treasuries significantly.

I've always said RPHYX is not a good cash substitute primarily because it has never been tested during a bear market in junk bonds. ... Still, YTD it is outperforming cash and has done well as a cash substitute since its inception.

It's done adequately, but I wouldn't say it's done better than cash. It's not hard to find an online account paying around 1%. In comparison, 0.46% YTD is around 3/4% annualized (we're 2/3 through the year).
It's even worse in a taxable account. So far this year RPHYX has spun off around 2% in dividends, and declined about 1.5%, for a net of about 0.5%. But you pay a higher rate of taxes on the dividends (ordinary income) than you get to write off on the capital loss (assuming you've held the shares for over a year).
If you've got $1000 in the fund, and a 25% tax rate, you'll owe taxes YTD of 25% on $20 dividends ($5), but might subtract taxes of 15% of the $15 cap loss ($2.25) if you sell. Your net tax would be $2.75 on net income of $5. Your after tax income YTD would be about 0.22%.
If it loses a bit more, so that it pays 2% in dividends but loses that 2% in value, then your gross income would be $0, but you would still owe net taxes of 0.20%. Not pretty.

A bit confusing today for me as well. Perhaps the late dump didn't catch all stocks? PBE was up as well as AIOIX which was up 2.71%. Being an international fund I expected much worse.
A lot of pumping going on in this market to make any gains for the big boys.

I like his argument, in the follow-on article, for why Fidelity Capital Appreciation (FDCAX) is no longer a Fanny Fifty Fund: it has been doing too well. There's an incentive fee built into the fund's price structure; if performance sucks, the e.r. drops. If performance soars, the e.r. rises.
Here's the reason for dropping the fund: " In 2013, the fund outpaced that index by 2.47 percentage points, upping the expense ratio by 4 basis points to 0.81%. This increase moved the fund's expenses beyond the category's cheapest quintile..."
David

FYI: Bill Gross’s bond mutual fund at Janus Capital Group Inc. suffered a 2.87% decline in its net asset value Monday, according to fund-research firm Morningstar Inc.
The drop is unusually large for a bond fund, according to people familiar with the industry.
Regards,
Ted
http://www.marketwatch.com/story/bill-grosss-bond-fund-at-janus-lost-29-monday-2015-08-25-81033757/print

My best fund today, other than cash, was DODIX - which didn't gain or lose.
From the watch-list: MFLDX, HSGFX and BEARX all had nice gains.
Approximately +1%. +2% and +2% respectively.

Pimco Managed Futures Fund up, as was the AQR Managed Futures fund.

My best fund today, other than cash, was DODIX - which didn't gain or lose. I'm spread-out pretty good. So, that's what I'd call a rotten day.
From my watch-list: MFLDX, HSGFX and BEARX all had nice gains.
Approximately +1% +2% and +2% respectively.
Interestingly, both gold funds I track were down a bit, despite the metal gaining.

Not a bloodbath yet.
But what I find amazing is the contrast in the 3 & 5 year returns for (diversified) large-cap equity funds in general and those funds focused on raw materials/energy. It's a stark contrast with the first group showing 10%, 15%, and even 20% annualized gains over 3 & 5 years, and the second group essentially flat or negative over that same period.
Doesn't make sense to me considering that to a degree the two groups are interconnected economically. (You don't buy a car and than not put fuel in it or drive it - or drive only on unpaved roadways. And few houses today are built of mud and grass and heated with solar.) Point I'm awkwardly trying to make is that the products which drive earnings for large cap stocks rely to an extent on the use of energy, metals, lumber, cement, etc. for their production and continued operation.
Either one group of stocks appears to be way overvalued - or the other way undervalued.