It does depend on timing. All this buy and hold advice that constantly floods our media really does not apply to retirees or those close to retiring. The risk tolerance changes for some and with that so does their asset allocation.
It is a fine balance between capital preservation and having enough growth so your portfolio will last as long as you need.
Good point @ Junkster.

Hi TPA.
Thanks for your response. Actually, I agree with what you say. Hard to disagree.
Yackin about Friday's hiccup in many markets won't change a thing. Sit tight and you'll still do well with good funds over 20 years. And over the next 30, I expect most of us will be dead - or at least convelescing somewhere.
I don't see many here fretting about their gains or losses. Perhaps you do. I may laugh when my funds head south over a day or so or scratch my head in puzzlement when I see nothing but green - but I realize it doesn't change a thing over the longer run.
As humans we talk about a lot of things we can't control or shouldn't worry about. The weather, sleazy politicians and whether aliens exist for example. So I don't see any harm in looking at how an assortment of funds performed on a given day.
Investing is a bit like driving on the snow and ice in Michigan. When you feel the rear end starting to slide around - often the best thing to do is take your hands off the steering wheel and foot off the brakes. Car will regain its tracking and steady if you don't panic and muck it up. So, the best thing to do about Friday - or most any other day - is precisely nothing.
Regards

FYI: The Vanguard funds listed below earned taxable income and/or realized capital gains for their fiscal years ended December 31, 2014 or January 31, 2015, that were greater than the amounts distributed in December 2014. The remaining taxable income or gains will be distributed in March 2015 as "supplemental" income dividends or capital gains distributions.
Note: These supplemental fund distributions will be reported on 2015 tax forms. Vanguard will not generate updated tax forms for 2014. The gains reported here are taxable for the year during which they are declared
Regards,
Ted
https://personal.vanguard.com/us/insights/article/supplemental-fund-distributions-032015

Maybe ask why REITs went UP so much in the past year --20% --- much of it by investors desperate for yield, and trend-following.
If (when) rates move up, bonds will be more competitive for capital, and capital will flow out of REITs; and utilities. -- and of course, borrowing costs will go up too -- What goes up, will come down.

In response to bee's query about one-star Gold funds:
No, there are none at the moment. There are five two-star Gold funds; three are Vanguard indexes and two are actively managed Manning & Napier funds.
There are four one-star Silver funds: Vanguard FTSE All-World exUSA Small Cap Index , Fairholme, FPA Capital and Perkins Mid-Cap Value.
David

@MFO Members: I believe in the "Make It Simple, Stupid" One a capital preservation portfolio, treasuries, investment grade bonds, preferred stocks, real estate, and a very small amount of cash. The second, a capital appreciation portfolio, stocks, junk bonds, and mutual funds.
Regards,
Ted

My 2 cents. Slicing, dicing, sleveing & cleaving all work for some people. Some of the benefit is from what I refer to as the "Dumbo Effect. " If you're my age, you likely learned a story in grade school about Dumbo the elephant who learned that by having confidence a magic feather he held onto he could fly - and he did! (The story was used to teach kids to have self confidence.) Don't laugh. A lot of successful investing comes from having confidence in your approach. Believing in it so much that temporary setbacks don't cause you to sell everything at the worst possible time and run for high ground and locking in losses.
A second benefit of the "slice em & dice em" approach is that it leads to rebalancing. Not all slices appreciate at the same rate or speed. So over time a smart investor may lighten up on his best performers periodically and re allocate the gains into investments that still have a lot further to run.
I like to slice and dice as much as anyone. Some of the slices are downright irrational. PRWCX is in the "equity" folder. OAKBX is in the "hybrid" folder along with the likes of PRPFX. While DODBX is placed in the "balanced" folder. Since all three funds are very similar, it's very likely the slicing and dicing here has meaning to no one else but myself.
FWIW

I find that this M* category (Conservative Allocation) has some of the most "diverse" active strategies that attempt to achieve what M* defines as:
"...portfolios that seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These portfolios tend to hold smaller positions in stocks than moderate-allocation portfolios. These portfolios typically have 20% to 50% of assets in equities and 50% to 80% of assets in fixed income and cash."
M* source:
morningstar defines Conservative_Allocation_Category
For example DIFIX has a stock portfolio that focuses on Real Estate and Finance and a bond portfolio that is highly concentrated in High Yield bonds. USBLX and VTMFX seem to favor holding stocks using the S&P 500 index and holding mostly tax free Municipal Bonds.
The list of conservative allocation funds with long term success based on,
- beating its 1, 3, and 5 year category average of 4.29%, 6.14% & 7.01%,
- having reasonable expense ratio of under 1%,
- requiring less than $5K to invest,
- having a M* ranking of 4* or 5*,
- and not charging a load
is displayed below:

Ha!
I drink too much wine to be personally stressed.
Fed stress test...awaiting results here.
I'm heavy BAC.
c

It's an enormous mis-allocation of capital. Disgusting! As you research various stocks (say, the stocks in your stock MFs), do yourself the shocking favor of clicking on the insider trading tab/link. There you will see just where these buybacks are happening: conversion of stock options held by directors and co. executives, then immediately sold. Not the 10-20K per person we're used to seeing; it's 100, 200, 500K+ per person, over and over, company after company. And from where is the money coming to do these buybacks? Cash on the books? In some cases, yes, but increasingly it is coming from cheap corp debt issuance. So out the door walks the cash (as shareholder, it's your cash, the product of your investment) and you're left with .... the debt to service.
http://www.bloomberg.com/news/articles/2015-03-03/company-cash-bathes-stocks-as-monthly-buybacks-set-record

Maybe they have a new lawyer. It seems like they all like to have generic wording. They can always say that they were trying to preserve capital.

Item 1 of 2 is just to approve the Board members. Item 2 is to shorten considerably the statement of the fund's objective.
Current: "The fund seeks to provide shareholders with regular current income, the potential for capital appreciation, and a moderate level of risk by investing in a diversified portfolio including bonds, preferred stocks, common stocks and other securities convertible into common stock. The objective of the fund is also to provide a current income yield of at least 25% greater than that of the S & P 500 Index, although there can be no assurance that this objective will be met."
Proposed: "The fund seeks to provide capital growth, current income, and preservation of capital."
Clearly, they want to open things up, leave open the possibility of taking on more risk than is the case currently, and they want out of the 25% goal. On the other hand, "preservation of capital" is not in the current wording, either. THAT part, I like.
If the current wording is no longer do-able, ok. But my impression is that the proposed greater opportunity to be more freewheeling isn't a good thing. What say you others? I just received this in the mail today. Thanks.

FYI: Lots of investors likely are dealing with a nagging, cautious feeling about the U.S. stock market as major indexes continue to thunder higher. Stocks can’t go up forever, right?
In just one week, the bull-market rally for the S&P 500 will celebrate its sixth birthday from its post-financial crisis nadir. That’s a rare feat. Only three other bull markets have lived to see a seventh year since the World War II, and this one is pacing to be the largest by magnitude (211%), says S&P Capital IQ.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2015/03/02/10-reasons-bank-of-america-merrill-lynch-is-bullish-on-the-sp-500/tab/print/

Mr. Studzinski noted:
In 2008, we had a period of over-valuation in the markets that was pretty clear in terms of equities. We also had what appears in retrospect to have been the deliberate misrepresentation and marketing of certain categories of fixed income investments to those who should have known better and did not. This resulted in a market meltdown that caused substantial drawdowns in value for many equity mutual funds, in a range of forty to sixty per cent.....
>>>So, would the summary be, that the big melt of 2007/2008 came from the liars and cheats who outfoxed the educated believers. That the greed factor by some, although aware of the liars/cheats hoped to be on the good side of trade and get out "just in time"? IMO, this is the likely broad answer; while most were left out in the cold.
The markets will always harbor some liars and cheats. The psychopaths who troll through investment land, always hoping in the "greater fool syndrome".
So, this time is different; in some aspects and remains the same in other aspects.
As to his note regarding capital preservation; this must always be a consideration within one's investments, no matter what form the investment. This has been discussed over the years, at both FundAlarm and MFO.
What caused the market melt?
@hank Have fun, knowing you two will, in the warm south. As your blood chemistry has become tuned to the "cold" you are going to feel way too hot for your stay, eh?
Knowing you will suffer through this bodily reaction, too.
Regards,
Catch

From the article: "A host of factors is behind institutions’ adoption of bond ETFs, analysts say. Among them: Deteriorating liquidity in corporate bonds has frustrated large investors as many individual bonds have become difficult to buy or sell quickly at a given price, thanks in part to rules limiting banks’ risk-taking.
U.S. corporate debt outstanding has grown by more than $2 trillion since the financial crisis to $7.7 trillion, but trading in many bonds has slowed as new rules caused dealers to pare their holdings by two-thirds from precrisis levels.
“You can’t get things done in a day anymore” in bonds, said Cliff Noreen, president at $212 billion money manager Babson Capital Management LLC, who saw an ETF sales pitch by iShares last year. “It’s more like a week.” "
In addition: hedge funds and etfs
Lastly and not knowing the affects; is that many etfs have options trading available for the etf.
Regards,
Catch

Was just reviewing some of David Snowball's earlier Funds in Registration feature earlier tonight and was curious myself.
Greenhouse MicroCap Discovery Fund
BCDSX:US
PENDING LISTING
GREENHOUSE MICROCAP DISCOVERY FUND (BCDSX:US) IS PENDING LISTING
Greenhouse MicroCap Discovery Fund an open-end fund incorporated in the USA. The Fund seeks long-term capital appreciation. The Fund invests in equity securities of micro-cap companies. The Subadvisor seeks to uncover companies run by disciplined management teams possessing clear strategies for growth and that the Subadvisor believes trade at a discount to intrinsic value.
http://www.bloomberg.com/quote/BCDSX:US
GREENHOUSE MICROCAP DISCOVERY FUND
Greenhouse MicroCap Discovery Fund will pursue long-term capital appreciation by investing in 50-100 microcaps “run by disciplined management teams possessing clear strategies for growth that … trade at a discount to intrinsic value.” The fund will be managed by Joseph Milano and James Gentile. Mr. Milano was portfolio manager of the T. Rowe Price New America Growth Fund (PRWAX) from 2002-2013. Morningstar described his investment preferences as “idiosyncratic … somewhat defensive … [tending toward] cyclicals.” He beat the S&P by about 2% a year over his career. The initial expense ratio is capped at 2.00% for investor shares. The minimum initial investment is $2500, reduced to $1000 for various sort of tax-advantaged accounts.
http://www.mutualfundobserver.com/2014/11/november-2014-funds-in-registration/
Also curious here:
RIVERPARK FOCUSED VALUE FUND
RiverPark Focused Value Fund will seek long-term capital appreciation. The plan is to focus on large cap domestic stocks, with particular focus on “special situations” such as spin-offs or reorganizations and on firms whose share prices might have cratered. They’ll buy if it’s a high quality firm and if the stock trades at a substantial discount to intrinsic value. They’ll sell when the stock approaches their target price for it
http://www.mutualfundobserver.com/2015/01/january-2015-funds-in-registration/

FYI: Your 401k and your IRA are your best bets for retirement because all your gains compound upon themselves, tax-deferred, until you start taking money out down the road.
That’s why I like to put growth investments in my retirement accounts rather than the standard advice to shelter income from bond funds here instead — that’s what municipal bonds are for. Buying a bond fund in a retirement account might shelter that income from taxes, but overall growth is bound to disappoint
Regards,
Ted
http://investorplace.com/2015/02/5-best-vanguard-funds-401k/print

Hey Catch, from M* charts and Yahoo price data, it looks like those pretty mild capital losses at PIMIX go back ~ 7 months.
One of the eye-catching features of the portfolio lately has been the lowered duration of the fund, down below 3 now, which they've pulled off by going negative duration on U.S. government debt. I think, without doing month-by month reviews of the portfolio commentary, that the negative duration position and some of the EM holdings (Russia, Brazil) are what have had the most to do with the capital losses. They're also vulnerable to credit risk on their mortgages, as they no longer hold much if anything in gov't mortgages. (Current breakdown is 2% government and 45% private.)
I wouldn't think the reorganization per se would have had a lot of effect on PIMIX, but they have been advertising themselves heavily as THE place to go for income, so I kinda wonder if there's been a subtle shift in how much they care about maintaining NAV.
Fwiw, I cut my formerly large position in half during Q4 '14, but holding there.
Good luck, AJ

@Carefree: Just say no to managed futures funds!
Regards,
Ted
(A Little Dated But Food For Thought):
Nine Reasons To Just Say No To Managed Futureds Funds:
http://www.forbes.com/sites/greatspeculations/2012/07/31/nine-reasons-to-just-say-no-to-managed-futures/print/
Managed Futures Funds Exposed:
http://macmllc.com/Managed-Futures-Mutual-Funds-Exposed.pdf
How Investors Lose 89%: Of Gains From futures Funds:
http://www.bloomberg.com/news/articles/2013-10-07/how-investors-lose-89-percent-of-gains-from-futures-funds