I agree with Bee. If this has been your main small value fund, you've missed out on one of the great bull markets in SV, and unless we get another 2008 style crash (which Cinnamond, in the above article, makes clear he is expecting), you'll never make up for that lost opportunity.
But as a cash alternative, 5% a year is pretty amazing. Plus you get the potential for big gains if the market does crash. Not bad at all.
Yet Cinnamond failed to take advantage of what was, in retrospect, a great buying opportunity -- the 20% corection in SV in 2011. He is, I'll say it again, betting on another 2008 crash. In fact, with his top holdings all precious metals, I'd say he's betting on apocalypse. (Perhaps he should consider renaming his fund teapx, since this is investing the tea party might like.)
Of course, with 1.4% E.R. on 700 mln in assets, that's a cool 10 million a year Mr. Cinnamond is getting paid to wait for apocalypse, so if I were him I'd be patient too.

thanks Derf. I'm looking at different ways to calculate total return between 2 dates that don't fall at the end of a quarter, where you can't look up the performance. So far the stockcharts.com method described above by catch looks very promising. Just need to confirm it's accuracy. Another method is using the Morningstar performance graph found under the "Quote" tab, but it's difficult to get the exact two dates you want. Another method is using the Adjusted closing prices from Yahoo Finance. Haven't confirmed the accuracy of that method yet, or if those adjusted closing prices include capital gains distributions from mutual funds.
You too have a nice Sunday, thanks.

I'm going to do it: swap from PIXDX into DSENX in my Roth IRA. I like the smaller asset base, I like Schiller, and I'd rather get away from Pimco these days. I would still be cautious about this fund if not held in a tax sheltered account. I just don't see how they can avoid capital gains (presuming that they're making money, that is) when they rebalance monthly and also have derivatives contracts rolling over.
Monthly rebalancing strikes me as too frequent in any case, you lose the momentum effect of sectors which can run for well over a month, but I presume they've done backtesting and this is what appears to work best.
This is a small % of my portfolio. I wouldn't go all-in to a new fund unless its manager and methodology have a long track record. Gundlach has the track record but I don't think his partner Sherman does. My two cents' worth.

FYI: Copy & Paste 7/4/14: Brendan Conway: Barron's:
ETF providers are looking for the next big thing -- and they're zeroing in on fixed income. Expect lots of new products, most of which you should ignore.
The never-ending search for the next big thing. Yet those efforts bear an imperfect relationship with what consumers truly want: For every iPad, there's a New Coke. Now, for every Standard & Poor's 500 exchange-traded fund, there's a "New! And Improved!" ETF being launched.
Fund companies are ardently searching for their next big success, and they're increasingly focused on fixed income for their big break. There are 270 bond ETFs on the market today, nearly 40 of which were launched in the past year, and another 160 in the pipeline. But for most investors, it's just a whole lot of New Coke. Or Coke with lime. Or some other unappealing configuration.
Investors know that simpler is better. Nearly half of the $370 billion in bond ETFs is in just 10 broad and straightforward funds like Vanguard Total Bond Market (ticker: BND) and iShares Core U.S. Aggregate Bond (AGG).
Providers are coming up with ever-more-clever ways of constructing bond ETFs. But for most investors, simpler is better.
The new ETFs come in several flavors: Some are narrow slices of the fixed-income market, like subordinated debt and senior loans; some are actively managed; and some are intended for very specific strategies, such as owning corporate bonds minus the interest-rate risk.
Many pros aren't impressed with the new offerings. Bob Smith, president and chief investment officer of Austin, Texas-based Sage Advisory, is particularly skeptical about so-called fundamental indexing, which favors attributes like cash flow or book value over the size of bond issuances: "If it was easy to do, they would have already done it."
The same can be said for active management, and yet investors will see more managers launching actively managed ETFs that essentially compete with their mutual fund. Next up: Jeffrey Gundlach's DoubleLine Capital, which is planning its first ETF with State Street's SPDRs. The DoubleLine ETF will have a broad reach across fixed-income markets, including mortgage- and asset-backed securities. The ETF isn't going to mimic the strategy of the popular DoubleLine Total Return Bond (DBLTX), so it will be free to generate returns from other bond-market corners. "I suspect the DoubleLine bond ETF will likely outperform the Barclays Aggregate and Pimco's total-return funds," says Claude Erb, a former portfolio manager for Trust Company of the West who now researches ETFs. But, Erb says, it is also likely to lose mojo the older it gets.
Erb's research shows that once an ETF reaches just 2% of the asset size of a manager's existing mutual fund, performance slows. Trading costs are one reason, but Erb sees something more important: Managers tend to use ETFs in a way that lends them to a burst of early outperformance. They're very much "best ideas" funds, since the manager can start from scratch with no legacy positions to contend with. So they work wonderfully for a period—and then they don't. That, Erb theorizes, is because great ideas are hard to come by, and the honeymoon eventually ends. That doesn't bode well for the best-known active ETF, the $3.4 billion Pimco Total Return ETF (BOND), which has soundly beaten its older sibling, the $225 billion Pimco Total Return (PTTAX), since the ETF's February 2012 inception. Sure enough, the ETF has slowed its advance; its assets are about 1.5% of its giant older brother's.
SO MAYBE PASSIVE IS BETTER. But just because an ETF is based on an index, doesn't mean it represents the market. Many new ETFs are aimed at solving a problem, rather than delivering the returns of a sector. These "precision" ETFs are tailored for specific uses in your portfolio—many are aimed at somehow hedging interest-rate risk or preserving your initial investment. Two good options are the defined-maturity bond ETFs offered by Guggenheim Investments and BlackRock's iShares. These ETFs own bonds that mature at a specified date, making them good tools for people who need steady income or are interested in laddering. Another example are short- and ultrashort-term bond ETFs, which last year helped investors weather fears of rising interest rates. The $300 million iShares Short Maturity Bond (NEAR) launched in September with an average duration of less than a year. Its 1% yield is relatively rich for short-term bonds.
This precision ETF-making, though, has its dangers, and some companies are willing to go further than others in terms of how fine they'll slice the market. One example is the push by leveraged ETF maker ProShares to launch as many as eight credit-default swap ETFs. What has been turning heads lately are bank loans. In May, Larry Fink, chief executive of BlackRock, grouped bank-loan ETFs with leveraged ETFs as products his firm won't create—they're too risky, and he fears how they'll behave in a steep selloff. "There is an underlying liquidity mismatch," says Matthew Tucker, head of iShares fixed-income strategy at BlackRock, who chose his words carefully as he told Barron's, "We think it could result in an outcome that's different from what investors expect."
Here's what Tucker wouldn't say: If the bank-loan market sells off, a fund like the $7.2 billion PowerShares Senior Loan Portfolio (BKLN) could plunge sharply, as weeks-long settlement procedures inject added risk. Though a spokeswoman for PowerShares says the ETF is an "appropriate vehicle for investors and advisors who understand the senior loan market," it seems clear that in a steep selloff, investors could be surprised at how hard and fast the ETF falls. A Vanguard executive, speaking at an industry conference last year, singled out bank-loan ETFs, saying that Vanguard wouldn't build a "faddish" ETF that risks trouble for investors. A fund of bank loans is a thinner slice of the market than most investors need.
Instead, most investors would do well to follow the lead of Smith from Sage Advisory, who says, "Just because they launched it, doesn't mean I'm buying."
The Good, The Bad, And The Ugly Theme:

This is an estimated average from my TDAmeritrade site.
--
Potential Cap Gains
Exposure % (3yr avg)
7.44%

Anyone done any research into the likely tax cost of DSENX/DSEEX? The Pimco Plus funds had massive tax costs (abut 7 p.p. a year according to M*), I imagine because they had to pay capital gains every time they rolled over a profitable derivatives contract. I imagine these funds might have this issue too. Of course, in an IRA that wouldn't matter.

The original FLVCX manager is now here:PYSAX
https://www.putnam.com/individual/mutual-funds/funds/644-equity-spectrum-fund/A
and here:PVSAX
https://www.putnam.com/individual/mutual-funds/funds/643-capital-spectrum-fund/A

This is from ZERO HEDGE IN 2009 ABOUT DAVID GLANCY :
NDAY, FEBRUARY 23, 2009
How To Get A Job When You Blow Up A Hedge Fund
Posted by Tyler Durden at 10:23 AM
Short answer - just go back to work for a mutual fund. Or at least that is what David Glancy did, when he decided to leave the treacherous world of hedge funds, in which he managed to plant a nice little frag grenade in the form of Andover Capital, and jumped back on the mutual fund wagon. On Thursday Putnam announced it was willing to receive the former Andoverite and Fidelitite with open arms, despite his shady recent track record. According to the press release:
[Glancy] will partner with Putnam's research teams to identify opportunities across the entire capital structure, focusing on equities while also including high-yield and bank debt. Glancy has special expertise in assessing undervalued, leveraged companies, which are companies that issue lower-quality debt or that otherwise have leveraged capital structures.
Glancy's previous venture, Andover Capital was a flop, which was down 6% in 2007, and was closed down in early 2008. However, David claims, the performance had nothing to do with his decision to close the fund, which was closed "for personal reasons." Putnam CEO Robert Reynolds seems to believe him:
David has built a stellar career delivering superior investment returns in undervalued companies. He brings us exceptional knowledge and expertise at a time of unprecedented market dislocation - and opportunity.
Glancy's reputation precedes him, when he generated positive returns as junk-bond manager for Fidelity in the late 90s before leaving in 2003. Ironically, Putnam, which recently announced it would eliminate 10% of its work force, was also hiring 4 other analysts (Shobha Frey, Lucas Klein, George Gianarikas and Vinay Shah) to complement their retention of Glancy and the firings of others. Sphere: Related Content
Bookmark this post with:

The original FLVCX manager is now here:PYSAX
https://www.putnam.com/individual/mutual-funds/funds/644-equity-spectrum-fund/A
and here:PVSAX
https://www.putnam.com/individual/mutual-funds/funds/643-capital-spectrum-fund/A

http://www.sec.gov/Archives/edgar/data/1141306/000089180414000604/hend59755-497.htm
497 1 hend59755-497.htm HENDERSON GLOBAL FUNDS
HENDERSON GLOBAL FUNDS
Henderson European Focus Fund
Supplement dated July 3, 2014
to the Prospectus and Summary Prospectus dated November 30, 2013
IMPORTANT NOTICE
This supplement provides new and additional information beyond that contained in the prospectus and should be retained and read in conjunction with the prospectus.
Effective as of the close of business on October 31, 2014, the Henderson European Focus Fund (the “Fund”) will be closed to new purchases, except as follows:
·Shareholders of record of the Fund as of October 31, 2014 are able to: (1) add to their existing Fund accounts through subsequent purchases or through exchanges from other Henderson Global Funds, and (2) reinvest dividends or capital gains distributions in the Fund from shares owned in the Fund;
·Trustees of the Henderson Global Funds or employees of Henderson Global Investors (North America) Inc. (the Fund’s investment adviser);
·Fee-based advisory programs may continue to utilize the Fund for new and existing program accounts;
·Purchases through an employee retirement plan whose records are maintained by a trust company or plan administrator;
·Current and future Henderson Global Funds which are permitted to invest in other Henderson Global Funds may purchase shares of the Fund.
The Fund is taking this step to facilitate management of the Fund’s portfolio. The Fund reserves the right to re-open to new investors or to make additional exceptions or otherwise modify the foregoing closure policy at any time (including establishing an earlier closing date) and to reject any investment for any reason.
PLEASE RETAIN THIS SUPPLEMENT FOR YOUR FUTURE REFERENCE.

http://www.sec.gov/Archives/edgar/data/908186/000143774914012033/accp20140619_497.htm
American Century Capital Portfolios, Inc.
Summary Prospectus and
Prospectus Supplement
Equity Income Fund
Supplement dated July 1, 2014 ■ Summary Prospectus and Prospectus dated July 26, 2013
As of August 1, 2014, the fund will be open to all investors.
The following changes are effective August 1, 2014:
The first paragraph under Purchase and Sale of Fund Shares on page 4 of the summary prospectus and page 5 of the prospectus is deleted.
The section entitled Closed Fund Policies on page 17 of the prospectus is deleted.

There is an article in Pension Partners that examined trends and performance in Long/Short strategies over the past several decades and concludes that L/S strategies are a thing of the past. I've wondered that myself after viewing MFLDX's performance lately. I've cut and pasted the author's conclusions. If you are interested in reading the entire article, follow the link below.
http://pensionpartners.com/blog/?p=439
Author's conclusions:
1) The alpha-generating long/short equity strategy of the 1990’s and early 2000’s appears to be a thing of the past.
2) This is likely a function of increased competition in the space and an increase in correlation and lack of differentiation among individual equity securities.
3) Over time, the long/short strategy has essentially morphed into a lower beta, long-only product that has actually delivered negative alpha in recent years and shown an inability to protect capital during market declines.
4) While widely considered an “alternative” strategy because of the short side, investors should be questioning this label as long/short funds are behaving more and more like traditional equity investments. With a rolling correlation of over .90, it is hard to argue that they are providing any “alternative” other than a lower beta version of the S&P 500.
5) The increase in correlation to the S&P 500 over the years is likely due to herding and career risk as long/short managers appear unwilling to incur the risk of not participating in an up market. The lack of volatility and historic advance over the past two years has only accentuated this issue, with the now widespread belief that the only way to perform is with higher exposure to the market.
6) While many investors appear to be happy paying 2 and 20 for lower beta exposure, this would appear to be irrational behavior considering the relative ease at which one could replicate such an exposure at a reduced cost.
7) One such replication, consisting of a 50/50 portfolio of Utilities and Staples, has widely outperformed the long/short strategy in recent years with equivalent risk and a lower correlation to the market. While not nearly as exciting as a long/short fund with a story for each individual stock in their portfolio, this would appear to be a better option for many investors if what they seek is simply lower beta.
This analysis represents average performance and some might argue that there are still many long/short funds that have generated positive alpha over the years. I would agree that this is certainly true but would question the ability of most investors to pick such funds. Also, given the poor performance of long/short equity fund of funds in recent years, it does not appear that even professional investors have been successful in separating the wheat from the chaff.
After a 200+% gain for the S&P 500 from the March 2009 low, many long/short equity managers have naturally benefited with sizable gains. Before assigning credit to these managers for any “stock-picking” prowess, I would encourage investors to compare their results with a simple ETF portfolio of Utilities and Staples (the “Utilities/Staples Test”). The results may surprise you.
Happy investing,
Mike_E

@MJG: Very nice; thanks.
The forward P/E of the Vanguard Small Cap Value fund is 16.65
For the S&P 500 Index fund, it is 17.01
In terms of predicting the relative future performance, I guess that gives the small cap value index a slight edge. Of course there are a lot of other factors besides the forward P/E ratio, not the least of which is the accuracy of those forward earnings forecasts.
For me the bigger factor is that I have been fully invested for a long time. For me to invest in small cap value, I would have to sell current holdings to make the switch, and that involves both Federal capital gains tax, and a State tax in a tax-unfriendly State.
If you do the math, it's a difficult hurdle. $100 invested today becomes much less than $100 after both Federal and State taxes on the gains are removed. Then, even if the new investment has a higher percentage return than the old, that higher percentage is applied to a lower principal amount. Selling a total market index fund in order to purchase a small cap value fund is a dicey proposition, as is selling another mutual fund to do the same.

FYI: If you are hungry for income, it is hard not to salivate over double-digit dividend yields that some closed-end funds offer, when most stocks only pay around 2 percent.
Regards,
Ted
http://www.fa-mag.com/news/when-you-should-be-wary-of-a-fund-s-high-dividend-18407.html?print
CRF's Latest Distribution History: Look At Return Of Capital:
http://cef.morningstar.com/distribution?t=CRF&region=usa&culture=en-US

FYI: Copy & Paste 6/25/14: Gail Marks Jarvis: Chicago Tribune
Regards,
Ted
Pricey stocks, bonds have experts guessing too
You are agonizing over where to invest your money, you aren't alone.
The pros are there with you — nervous about stocks and bonds as clear opportunities become fuzzy in both. As the best and brightest fund managers talked at Morningstar's three-day conference in Chicago last week, they repeatedly expressed reservations.
They see Treasury bonds vulnerable to the inevitable climb of interest rates, and corporate and high-yield bonds paying so little interest that there isn't enough insulation to protect investors if the economy suddenly weakens or if investors get cold feet. After the unrelenting climb of stocks since 2009, the pros see a stock market so pricey that stocks appear vulnerable to any bad news for the economy or companies.
But the difference between you and professionals who run mutual funds is that fund managers are hired to do something with clients' money, no matter what. While sitting on cash rather than stocks or bonds might provide security in an iffy environment, cash earns no interest thanks to a Federal Reserve policy designed to get people to choose riskier options. Even though many pros say they are flummoxed by a market in which everything from stocks and bonds to currencies and commodities have all become pricey because of the trillions of dollars worth of stimulus poured into the markets by the Federal Reserve and counterparts in Europe and Japan, fund managers are doing what they think they must: deploying money where they can make a case for satisfactory results even though they expect high prices to hold back future gains.
They are emboldened by the fact that prices are high — but not outrageously high.
After all, even though pros have worried about bonds and pricey stocks for months, the Standard & Poor's 500 stock market index has managed to bestow gains of 5.5 percent this year while bonds haven't incurred the losses that pros thought were a sure thing earlier this year. There hasn't even been a correction (a short-term downturn of 10 percent in the stock market) for 32 months. Such a long stretch without a sizable dip in the markets has happened only four other times, according to Gluskin Sheff economist David Rosenberg.
Still, bond fund managers Mark Egan, of Scout Investments, and Bill Eigen, of JPMorgan Asset Management, told a Morningstar audience of financial advisers that they are so concerned about the lack of opportunity in bonds that they have parked about 60 percent of their clients' money temporarily in cash. Pimco's Mohit Mittal has about 28 percent of his portfolio in cash.
Cash will hold back bond fund gains if bonds continue to do well. But Eigen figures interest rates will eventually rise, investors will panic and try to bail out of bonds so quickly that bonds will suffer sharp losses. Then he plans to buy bargains.
Fund managers typically avoid holding more than 5 percent cash because waiting for deals can take longer than expected, and investors get impatient when their mutual funds are earning less than other more daring funds.
Considering the high prices of stocks, some fund managers who specialize in stocks also are holding substantially more cash than usual. Even those scouring the world for investments are having difficulty finding stocks cheap enough to buy.
While some have suggested buying cheaper stocks in European markets, Ben Inker, director of asset allocation for GMO, is cautious about Europe.
"You can find some cheap companies, but all of them have hair on them," he told the Morningstar audience of over 1,000 financial advisers. "Some places that aren't even cheap have hair on them."
Since money managers must find something to buy, Treasury bonds that mature in five to seven years "are not a wonderful place to be, but are OK," he said.
Meanwhile, Dennis Stattman, who heads BlackRock's asset allocation team, said stocks of large Japanese companies that sell to the world are significantly cheaper than U.S. companies. He's trimmed some exposure to U.S. stocks because they've become so pricey and added Japanese companies.
While some investors have been interested in European financial companies that appear cheap, Stattman said "in many cases they are overlevered and in possession of bad assets."
European stocks have climbed significantly simply because the "European Central Bank took off the table the fear of banks failing." But "governments have promised too much and taxed too little."
Meanwhile, Michael Hasenstab, chief investment officer for Franklin Templeton global bonds, says two of his favorite markets for bonds have been Poland and Hungary, and he's comforted that the continuation of stimulus from the U.S. Federal Reserve and counterparts in Europe, Japan and China will power many emerging markets.

No need to get in a tizzy. Stay grounded, and let the price of things be your guide (not pundit hysteria, that is simply trying to get you to buy and sell and buy and sell).
http://alephblog.com/2014/06/25/a-few-notes-on-bonds/
@VintageFreak I see nothing wrong/imprudent with opening a small position in ARTFX. How often does one have an opportunity to invest with a Top-Tier manager (of any asset class), in the prime of his life, at the top of his game, in a new fund where he has a lot of latitude in deciding what he thinks needs to be done? The fact he is able to do this at such a classy fund family as Artisan is just icing on the cake. Also, Artisan allows one to initiate at practically nothing (actually, I think it may be zero, with an AIP) so very little capital needs to be put at risk, until better values appear. What's not to like?

I'll give you about the wish-washiest opinion that you'll ever hear. I think they're both pretty darn safe. ICMUX has been paying a yield around 2.7% so far this year and RSIVX has been paying a yield of approximately 4.3%. My guess is that this means that ICMUX is a bit safer, but they both hold large cash positions (ICMUX's is considerably larger) and that should mean that they can both hold tight if rates rise, let their bonds mature and thus suffer no capital losses. Plenty of forced selling from redemptions can be done by running down the cash.
That leaves the possibility of defaults. Combining competent managers (and I see no reason to believe that either of these companies is less than competent in assessing the viability of companies) plus the relatively short-term nature of their holdings, I'd feel comfortable with either fund. There is no absolute safety in this world, but ICMUX and RSIVX are probably about as close to it as investments are going to get.

Not to flame another Cman/MJG war, but there is definitely another side to this story. Fama-French factors have come into some pretty compelling criticism lately, and it is no longer clear there is a SCV premium or historical outperformance.
First, a graphic example. (edit: Sigh, looks like M* won't allow you to link to the period I had originally input. To look at that chart, use 6/25/1979 as the start date. The values I listed are correct.)
Those are the returns of a $10,000.00 investment in each of VFINX ($474,278.66), NAESX ($434,025.38), SCV ($524,319.28), and LCV ($411,828.31) over the past 35 years, approximately the time horizon of a retirement portfolio.
Second, the CAPM model assumes the most efficient portfolio is one that contains all the securities in a market, and that any excess return comes from increased risk. Fama-French expands that by explaining where you find that risk (beta). You aren't increasing your diversification by adding SCV to a portfolio of domestic stocks (if you doubt this, check a correlation table between VFINX and VISVX). You are adding risk in hope of greater returns.
So two questions:
1) Where are the excess returns for the small cap and value premia; and
2) if this investor didn't get greater returns, why did he/she accept greater risk?
As a lot of us probably know this, I'll just link these articles and let people ruminate on their own.
Sam Lee from M* explains Fama-French factors well here and here. He also explains his problems with Efficient Market Theory here. You can find the original paper describing the small-cap premium by Rolf Banz here.
Turns out, however, that there has been no return premium for small cap stocks since the data was gathered by Banz in 1979. How can that be? Explanations for problems with the Fama-French assumptions, start with their own recent paper explaining how the three factors are actually five. Ask yourself after, "where does this stop?"
From there you can read:
Sam lee on the Five-Factor model. ("I think this should be a come-to-Jesus moment for those who've taken the F-F model as the gospel truth. Fama and French admit that their original three-factor model was not motivated by theory. They chose value and size because they worked better than other characteristics in back-tests. Grounded in the efficient-market hypothesis, they came up with risk-based stories for these patterns. Small-cap stocks provided excess returns because they're more vulnerable to the business cycle. Value stocks did so because they were distressed.
However, since then, the size factor is no longer considered a significant source of excess returns by many academics and practitioners. Rolf Banz's original 1981 study showing a huge size premium was marred by survivorship bias. After it was corrected in the mid-1990s, back-tests showed a much smaller premium. Moreover, whatever excess returns small-cap stocks provided were driven by the smallest, least liquid securities.")
John Rekenthaler on problems with supposed historical premia. ("To the extent that smaller companies do outperform, those gains likely owe to a liquidity premium. Smaller-company shares have lower trading volume, which increases the chance of moving the stock price by putting in a trade order, and which hampers the investor’s ability to rapidly enter or exit a position. Low liquidity is a real cost that deserves to be compensated with a real return. This is fine--but properly speaking, it’s not a small-company effect.")
Finally these are articles from Advisor Perspectives, a commentary/newsletter service for FAs: 'The Small Cap Falsehood' ("The supposed outperformance of small cap stocks is a foundational precept on which many respected asset managers have staked their expertise over the years – foremost among them, Dimensional Fund Advisors (DFA), the famed fund company that has gained a near-religious following since they popularized small cap indexing three decades ago. A growing body of research, however, shows no such advantage for the last 30 years and, now, a new study seems to have proven that the supposed small-cap advantage may have never existed in the first place.");
and 'A Test for Small Cap and Value Stocks' ("In a recent talk, Stanford professor and Nobel economist Bill Sharpe challenged advocates of smart-beta strategies, including overweighting small-cap and value stocks, to respond to two questions. Can the strategy be adopted by all market participants, or does it have a practical limit in terms of assets that can be invested? If it has a practical limit, then one should expect the premium to decrease over time.
For small-cap stocks, for example, it is obvious that the answer is "no" – eventually the dollars pursuing those stocks would make them mid- or large-cap stocks. The same is true for value stocks; the money pursuing them will eventually drive prices up and erase their risk premium.
In an email exchange, [Larry] Swedroe essentially agreed.")
It should be pointed out that Merriman has an agenda here: he sells DFA funds that are uniquely based on the Fama-French factors. To be fair, those funds have done very well since inception. It is worth asking, however, if the small cap premium is based in liquidity and not size, whether an index is the best method of including this asset class in a portfolio.
It should also be said that the one factor that is predictive of future performance is valuation as measured by Shiller CAPE. And right now, US small caps have historically high valuations.
So should someone include SCV? That depends on what their horizon and goals are. But if they do weight to SCV, they should be aware they are accepting increased risk with no guarantee of increased returns.

I will presume, for others much more savvy; the black swan monitoring model we use, may be too simplistic.
Step 1: Monitor broad market movements globally, as time allows.
Step 2: Monitor personal fund holdings, as time allows; and daily if possible.
Step 3: If a trend appears to have a new beginning or new end; try to determine why.
Step 4: Moving averages may help better identify the trends. A mix of 20, 39, 50, 100 and 200 averages may provide enough information; although these will not identify the root cause of the changes.
Step 5: Buy or sell; dependent upon one's risk/reward emotion.
Step 6: Preserve capital as much as possible; as one can not have advantage of the most favorable trend of all, being the long term compounding of positive capital.
Step 7: When one becomes more familiar with steps 1-6 and how one interacts to these steps, a black swan may be avoided.
The need for a Monte Carlo simulation may be reduced or eliminated; as one has attempted to create a long term (ever flexible, not buy and hold) investment position which may fulfill the future needs from the very actions that result from steps 1-6. A self-fulfilling, real-time methodology of investing. I may suppose this could be named a real-time Monte Carlo; as it will take care of itself going forward. One will not know they have arrived, until they do arrive.
Monitoring today is quick and easy. The speed allows one to "see" the numbers related to personal holdings and become intuitive about movements in pricing.
As to the "whys" one may discover from the numbers is a whole other area of investigation and use of free time. This too, can become an almost intuitive experience.
We all are aware of the many machinations that take place, and are out of our view or access. Obviously, these actions that surround our investments each and every day cause some decision making to become more difficult.
Even if the above seems to complex and not necessary; a simple 50/50 equity and bond mix (of your choice) should not drag a portfolio too far away from a decent and ongoing annual return.
Our personal statistical model is what we view at least once each week, if time allows. If we can take care of today, we will already have taken care of the future tomorrows.
As individual investors, we play amongst the investment gladiators of the entire world.
I sincerely wish all well; as we play this complex game among and with the big kids.
Regards,
Catch

Yes, lousy day.
And on good economic news.
Started out good, but went south in hurry.
Go figure.
As usual, one bad day knocks out the gains of several good days.
Only HCP was up in portfolio. And, SIGIX and RSIVX even.
Red all else.

FYI: Early Gains on Upbeat Economic Data Evaporate.
Regards,
Ted
http://online.wsj.com/articles/u-s-stock-futures-inch-lower-1403612234#printMode
Markets At A Glance: http://markets.wsj.com/us