I wonder if there is another factor . Loss carryover from 2008 is pretty much over and I know that I was upset this April when doing my taxes revealed that my capital gain distributions were so large i owed a good deal of money. Even though my active funds did ok or well I was almost sorry I did not own index funds.

FYI: So you have been bitten by the gold bug? Here are six easy ways to add a little gold to any portfolio — and the pros and cons of each. (Sources: GoldResource.net, SeekingAlpha.com, Morningstar Inc. and Kapitall Inc)
Regards,
Ted
1. Mutual Fund
The $70 million Gold Bullion Strategy Investor Fund (QGLDX) is currently the only mutual offering pure-play exposure to the price of gold. Launched 12 months ago, the fund gains exposure to the gold through a 25% allocation to gold futures contracts and a 75% weighting in short-term bonds.
Pros: Liquidity. Also works as an interest rate hedge. No transaction costs.
Cons: Above average expense ratio. Relatively untested strategy.
2. Exchange-Traded Funds
The financial services industry created multiple ways to generate long- or short-exposure to the price of gold. But, keep in mind, whether the various exchange-traded products are offering long or short exposure, they are essentially designed to track the price of gold, as opposed actually owning the precious metal.
Pros: Inexpensive to own and easy to buy, with all-day liquidity. A good vehicle for traders.
Cons:Transaction costs. Most company-sponsored retirement plans still do not offer exchange-traded product
3. Gold bullion
There is no greater commitment to gold investing than direct ownership and possession of gold coins and bullion.
Pros: A sense of security like none other, assuming you have a secure storage facility. The best price you’ll get when buying physical gold.
Cons: There is a mark-up when purchasing bars and ingots, and when selling you might need to hire a professional appraiser. Bullion is also less liquid than coins, and can be difficult to use as an actual currency for smaller purchases.
4. 4. Gold coins
Coins introduce a different level of physical gold ownership because the value is affected by multiple factors, including brand, country of origin, and supply of specific coin brands by location.
Pros: When demand for gold is high, gold coins can sell at a premium to the price of gold. Can be used as currency.
Cons: Easy to purchase, but there is usually a steep convenience upcharge, and the spreads rarely favor smaller investors.
5. Futures and options
Not for the meek or inexperienced investor, trading futures and options is considered among the best ways to make money in gold, assuming you have a solid understanding of how it’s done. It is a strategy best left to the professionals.
Pros: A lot of money can be made without putting up a lot capital, because this is a market designed for speculators.
Cons: You can lose your shirt in a hurry.
6. Gold-mining stocks
A less direct way to gain exposure to the price of gold, mining company stocks generally benefit from rising gold prices, but the correlation can be unpredictable because of other factors driving revenues and profits.
Pros: There is usually dividend income. The stocks can sometimes outperform gold prices.
Cons: Transaction costs for buying and selling the securities. There is always a risk that the company stock prices will move way out of step with the price of gold.

We have no problem using funds to build income portfolios. Aside from the many bond funds that are well-run and offer acceptable yields (and that are not loaded with long-term junk), there are a number of low-octane, diversified stock funds and what we would call alternative or dynamic allocation funds that fit the bill.
Preferred stocks are a b.... to buy individually, as witnessed by my post to a thread on that topic earlier. While we recognize the overall premium prices for most preferred stocks, KIFYX has done an ok job, and they have actually reduced the dividend to account for lower yields rather than load up the portfolio with holdings that are too risky. It bears watching, however. PAUIX provides a very generous dividend while maintaining a very reasonable risk profile.
Stock funds that seem appropriate include Schwab's SCHF, with a 2.54% yield. Hennessey GASFX comes in at 2.41%. SPDR's SDY is 2.27%. Wasatch WASIX is 2.8%. If MLPs are part of your income strategy, Oppenheimer Steel Path is attractive. Matthews MAPIX has always had a decent dividend, last 12 months has been 2.84%. Federated Intl IVFIX is at 4.71%.
An investor can be as conservative or aggressive as they want and still find decent yield. And it is possible to construct a diversified mix of funds that provide an attractive yield. Of course, one can go the individual stock route. For most folks, however, using ETFs or MFs can be a lot easier. No method is foolproof. One should consider, however, where the underlying positions' gains have been and perhaps weight the mix of portfolio holdings accordingly. Some folks just want to do better than a money market or short-term CD, and there are a lot of options available, but buyer beware in terms of risk they might be buying.

FYI: U.S. stocks hung onto sharp gains through the afternoon, as tensions eased in Ukraine and European shares staged a recovery.
The Dow Jones Industrial Average gained 161 points, or 1%, to 16824 in late afternoon trading. The S&P 500 index advanced 15 points, or 0.7%, to 1970. The Nasdaq Composite Index tacked on 38 points, or 0.9%, to 4503.
Regards,
Ted
http://online.wsj.com/articles/u-s-stock-futures-rise-after-healthy-european-results-family-dollar-news-1408364301#printMode
Markets At A Glance: http://markets.wsj.com/us

well, at the present price of 27.18, and assuming no dvd reduction/suspension (min. risk) until 5/16, back-of-envelop calculation gives me a "call risk" (total impairment of capital, if it were to be called then) of..... about 2% (getting 3 qtrly payments prior to call). With an improving credit profile, and assuming the rating mark is accurate, it would seem to me that Ted is taking on risk that is not unreasonable here, for a pretty good reward. Interest rate risk would be negligible.

Another thing that would concern me is the lack of call protection; specifically, the company can call in all or any portion of this preferred stock at $25.00 starting in 2016:
'
"Ally may redeem all or any portion of the outstanding shares of Series A Preferred on any dividend payment date on or after May 15, 2016."
Compared to the current price of $27.18, this represents close to a 10% capital loss. If you're willing to accept the risk of this capital loss associated with Ally's calling in your stock (and it's likely to be called), you are braver than I am.

FYI: Tomorrow I'm adding Ally-B Preferred to my capital preservation portfolio. At it's present share price of $27.18, par being $25.00 the current yield is 7.82%
Regards,
Ted
http://www.preferredstockchannel.com/symbol/ally.prb/

For your information: SEQUX has 54.47% potential capital gains exposure, which is a lot. So it they sell (which may not happen, or course), one will pay lots of taxes, unless it is in IRA.

@finder, 54.47% is a lot of potential capital gains exposure. But it's not hugely more than the market itself. Look at the Vanguard S&P 500 Index Fund's potential capital gains exposure.

So it's more just a result of a huge bull market since the market low on March 9, 2009 at S&P 500 677.

.

@rjb112: What software are you using to get overlay on M* Fund Snapshot ?
Regards,
Ted

@Ted, I combined two different screens so they could both be seen.
So I'm not seeing the overlay........
First I looked at the "Quote" tab on M*, then took a screenshot.
Then clicked on Tax, per your instructions.
Then took a screenshot of what you see under Tax.
Then combined both screens.
But to answer your question, I'm using Internet Explorer 11 as my browser

For your information: SEQUX has 54.47% potential capital gains exposure, which is a lot. So it they sell (which may not happen, or course), one will pay lots of taxes, unless it is in IRA.

For your information: SEQUX has 54.47% potential capital gains exposure, which is a lot. So it they sell (which may not happen, or course), one will pay lots of taxes, unless it is in IRA.

@finder, where do you locate the data about a fund's potential capital gain exposure?
Probably somewhere on Morningstar. Can you reference the exact location?
thanks

For your information: SEQUX has 54.47% potential capital gains exposure, which is a lot. So it they sell (which may not happen, or course), one will pay lots of taxes, unless it is in IRA.

Lukemon, so this is chiefly a capital-appreciation goal and finding the extremely solid and proven manager? Still can't really make out what your plan is. Why not put most everything into FLVCX and Soviero? If a smoother ride, half into GABEX and half into AMANX? Or a third into each? Yackts are closed, I believe, but PRBLX (Ahlsten) is not.

"
So you have a fund going long and short based on what brilliant people think should work and they would have been better off just going long (and the more heavily shorted companies, the better) for the last 5 years or so.

Remember the Long Term Capital Management hedge fund?

Yeah, Jim Rickards - who I like quite a bit and follow (he's written two books and has an active Twitter) - was the principal negotiator in the bailout of LTCM. It's sort of like that - very intelligent people doing very complex things who are married (to at least some degree) to their economic theories.

"
So you have a fund going long and short based on what brilliant people think should work and they would have been better off just going long (and the more heavily shorted companies, the better) for the last 5 years or so.

Remember the Long Term Capital Management hedge fund?
If ever there were brilliant people, that was it. IIRC, possibly two Nobel Prize winners in that group of geniuses. It failed, and required a bail out from our government to prevent a wider spread financial crisis.
There was a book written about it [I haven't read it though]:

From the Tactical Hedged Futures Strategy fund prospectus: "ITB Capital Management, LLC, the Fund's sub-advisor (the "Sub-Advisor") focuses on writing call and put options that it expects to expire worthless. Call options expire worthless when the underlying index price is below the strike price at maturity (expiration date); while put options expire worthless when the underlying index price is above the strike price at maturity (expiration date). The Fund profits when written options expire worthless because it retains all of the original sales proceeds (option premium). The Sub-Advisor believes these written options will expire worthless because it selects call options with strike prices that are above the anticipated short-term trading range of the reference futures index, and selects put options with strike prices that are below the anticipated trading range of the underlying index. The Sub-Advisor forecasts index trading ranges based on its fundamental analysis of economic conditions, technical analysis of historical index prices and its general opinion of market direction. Additionally, the Sub-Advisor uses scenario analysis to assess risk and will adjust portfolio positions to reduce sensitivity to downside market movements."
Oy. Funds whose strategy just starts to get too esoteric. It's like a lot of ETFs where you look at it and - potential problems with the strategy aside - you can guess that there's likely just not going to be enough interest.

"The Federal Reserve has spent five years buying Treasury bonds in an effort to keep yields throughout the bond market low enough to encourage investors to loosen their white-knuckled grip on these "safe" investments and move into stocks
I question the above statement, which is the opening statement of the article.
Can they prove that statement to be true?
It says the Fed has kept bond yields low IN ORDER TO encourage investors to buy stocks.
Is that so?
I thought the Fed has done this to increase the money supply. To lower the cost of capital. To encourage borrowing and spending, to stimulate the economy, to facilitate the recovery of home buying and the real estate market.
I don't see the Fed sitting down and having planned a method for investors to move into stocks.
OK, I can play devil's advocate and say the Fed wanted this to happen, because when people's stock portfolios are higher in value, they feel more confident to spend money and stimulate the economy. But I don't think this was the primary intent. I think the primary intent was to stimulate the economy by lowering the cost of capital, the cost of borrowing money, by increasing the money supply. Not to raise stock prices.
MFOers, please opine......

Hi Junkster,
I suspect you are either being too generous or too naïve in our assessment of individual investor performance.. Given your past postings I gage the odds of you being too naïve as nearly zero, so I guess you are being overly liberal in your appraisal.
Overall, investors are not that talented, and often do not take the time to measure their successes against a proper benchmark. Even professionals share this very common failure.
Your post reminded me of several stories that appear in Peter Bernstein’s classic “Capital Ideas” book. As recently as the 1960s, Bill Sharpe reported to Bernstein that professional advisors and institutional agents did not keep proper score. They assumed they were dong well, but did not document their records. In general, those records were uniformly miserable. Alfred Crowles 3rd documented how badly these pros did in their inept forecasting as early as the mid-1930s.
The performance statistics are at least reasonably accurate although they are not perfect. They need not be perfect since the percentages are in continuous change. There are periods when both the amateur ranks and the professionals do extremely well. But a conservation of profits law dictates that the average investor (both institutional and amateurs) must on average earn less than the overall market because of fee and cost leakage that subtracts from the total market rewards.
Also note that the investor population itself is in constant flux. Poor performers drop out. Today’s investors are not the same group that was underperforming 20 years ago. The survival rate of mutual funds is a staggeringly low percentage. Losers do disappear from the investment scene.
Like you, I do believe that long-term MFO participants are likely near the top in terms of returns. But many exceptions exist, and the membership of MFO is dynamic. That’s one reason why I try to introduce members (especially new ones) to the organizing magic of statistical analyses.
On a personal note, I have been investing for almost 60 years. I did not do well in my earlier years and was victimized by the industry touts. I did finally learn. It does take learning, patience, and persistence. And some painful losing, and a ton of reading.
Thank you for your comments.
Best Wishes.

thanks mrdarcey. I'll have to take a look at those. I believe there have been some articles this year, possibly one by Larry Swedroe, saying that dividends were getting quite popular and therefore expensive.....so that the P/E ratios on some of the dividend exchange traded funds was too high. Swedroe in particular was advising total return investing and not dividend investing for that as well as other reasons. I'd have to look for those articles.

I've seen Swedroe make the point that it shouldn't matter towards cap gains if you take dividends out or not and sort of poo poo DRIPing. Basically telling investors to create their own dividends by selling a %age of gains. But the thought is supposed to be that dividends and low payout ratios (and to some extent buybacks) impose some restraint on corporate misbehavior, and that only high quality firms can afford to continually restrain themselves by returning profits. You've probably seen the same things I have there. Some valuations seem stretched, but these are maybe companies people are willing to pay up a little for.
Forgot to add M*'s wide-moat index, MOAT.

Negative 4.4 returns for small caps for 7 years in a row. Takes some cajones to make that call. Setting a reminder for 2021.

Keep in mind, that's real-return, so they are assuming something like 2.5% inflation. Which means something around -1.5 to -2% a year going forward.

Domestic Energy/Heath-Bio
https://www.google.com/finance?q=NYSEARCA:IEO&ei=xj3sU6CECYbPrQGu_4HwCA
https://www.google.com/finance?q=MUTF:FRAK&ei=xj3sU6CECYbPrQGu_4HwCA
http://news.morningstar.com/fund-category-returns/energy-limited-partnership/$FOCA$LP.aspx
http://news.morningstar.com/fund-category-returns/equity-energy/$FOCA$EE.aspx
http://news.morningstar.com/fund-category-returns/health/$FOCA$SH.aspx
http://etfdb.com/index/health-care-select-sector-index/
An Economist's Perspective From Mesirow Financial's Diane C Swonk
"I debate with my colleagues on economics,
politics and psychology about the nature
of the changes that we are seeing: if they
are “cyclical,” then the effects of the
changes will be short-lived, and over within
a few months or quarters; or, if they
“structural,”then the effects of what we are
seeing will take much longer to play out;
it will take years to see the full impact and
could affect the lives of our children as well
as ourselves. This report takes a closer look at some of
the structural changes that we see emerging,
and how they are likely to affect the pace
and composition of growth going forward.
Technically we have shifted from a recovery
into an expansion. Waiting for a more
pronounced recovery, however, has been a
bit like waiting for Godot. Much of that
is because of the structural shifts we are
seeing in everything from a slowdown
across emerging markets, most notably in
China, to the ongoing challenges that the
Eurozone faces, and what those shifts mean
for monetary policy."
CHICAGO, August 13, 2014 – In the August issue of Themes on the Economy®, Mesirow Financial' s Chief Economist Diane Swonk muses on economic challenges and burdens that baby boomers are leaving for the millennial generation. "This will no doubt trigger some backlash, particularly among younger workers who will have to pay more into the system to keep the promises made, but they will not get much (if anything) in government-sponsored retirement benefits for themselves."
And, don't look to make it up in stock market, technology or housing bubbles; the Federal Reserve is keeping a much closer eye on the banks it regulates. Chair Janet "Yellen has talked about higher capital requirements and more conservative underwriting standards as ways that the Fed could deflate emerging bubbles. She has also praised the use of regulations targeted at tempering the rise in home prices..." The Fed plans to exit its QE3 program gradually, but the "fear is that the economy is more sensitive to rate hikes now than it was in the past. If the Fed acts too aggressively, it risks leveling the whole forest."
The picture looks different in other parts of the world, too. China will still represent opportunity but competition as well, and not just on the economic front, as it increases military spending. Swonk also cautions that, "stability in the Eurozone is illusory," with "the ongoing risk of deflation" and the effects on sovereign debt.
http://www.mesirowfinancial.com/economics/swonk/themes/themes_0814.pdf
Everything is Good!
Tonight's Headline
Shares, bonds rally as investors bank on ENDLESS stimulus.
Reuters By By Wayne Cole
2 hours ago
http://news.yahoo.com/asia-shares-investors-bank-more-stimulus-013020693--finance.html

With the gains India has enjoyed, if you have held that fund throughout the latest bull market, I just might sweep profits off that.