You might say: Gold is a good buy because it’s a store of value, it protects against inflation, and it gives comfort in times of panic. So you argue that’s a good reason to buy gold today at $1300. But the trouble is that all those things were also truth when it was at $1900, and the person who bought it there has lost a third of his money. Therefore, you can’t invest intelligently in gold. There is no way to translate those virtues into a dollar figure. By the way: If you take the word «gold» and you take away the letter «l» then you have god. And it’s the same analysis: Either you believe in it or you don’t.
"Howard Marks, chairman of the U.S. investment firm Oaktree Capital"

Regarding FPRAX's strategy change and subsequent tax implications, I only see four positions initiated prior to 9/30/13. Seems like most gains have been realized by now.

FPRAX this year will be good only for IRA-type accounts: It already made a huge capital gain distribution, and probably it will continue this way while the new managers change the nature of the fund.

BNP Paribas upgrades India to overweight
'Reuters | Updated On: February 26, 2014 17:12 (IST)
India and Indonesia, previously at risk from severe currency depreciation and liquidity tightening, have recovered in terms of their trade and current accounts, and to a lesser extent in terms of inflation, the BNP report added.'
'Weak currency and high imports had earlier put a strain on the two nations among "the fragile five" by widening their current-account deficit.'
http://profit.ndtv.com/news/market/article-bnp-paribas-upgrades-india-to-overweight-381652
A More In-depth Presentation of Emerging Market Oppotunities
EM and the Fragile Five: Separating the Wheat from the Chaff
TCW Asset Management
By Blaise Antin, David Loevinger, Anisha Ambardar
February 26, 2014
Looking ahead, we believe that 2014 will be a year where differentiation matters. Investors who ignore the naysayers and instead focus on the risk/reward characteristics of individuals countries through old-fashioned fundamental analysis will be well rewarded. Beyond the Fragile Five, there are many EM countries that have strong or improving credit outlooks. Given investors’ attention to the Fragile Five, in the following section we present a brief analysis of the vulnerabilities of each, how they compare now with previous periods when these countries experienced systemic crises, and the extent to which policy adjustments to date are leading to macroeconomic adjustments that will put these economies on a sounder path.
Our bottom line on the Fragile Five: Overall risk is relatively low in Brazil, moderately high in Turkey, with Indonesia and India closer to Brazil, and South Africa in the middle. In the next section, we discuss each country in order of our assessment of their vulnerability, from low to high.
http://advisorperspectives.com/commentaries/tcw_022614.php
And more from T C W Emerging Markets Multi-Asset Opportunities Fund TGMEX
When we look across the investment spectrum for emerging
markets, we prefer equities to debt, which we are expressing
through our breakdown of 66% equity and 31% debt.
We believe that improving growth in the U.S., bottoming out of
Europe and stable growth in EM countries, most notably China,
should create a positive environment for EM equities. We see
potential for strong performance in EM equities in 2014 with
improved revisions and earnings growth balanced against a
potential derating on the back of a higher cost of capital. The upside
risk to our forecast could come from other global factors, for
instance any further expansion in the S&P 500 P/E , which would
help alleviate the downward pressure on EM multiples. We remain
focused on combining some of our macro country views with more
idiosyncratic positions around what we see as multi-year growth
stories, including gaming and internet penetration, growing use of
generics and renewable energy. We further remain opportunistic on
frontier markets but, given the stellar year for MXFM in 2013, we
think the opportunity for significant outperformance by FMs relative
to EMs is more limited in 2014
https://www.tcw.com/~/media/Downloads/TCW Funds/Quarterly Letters/EOF_QL.ashx

I agree the cars are a niche product. Tesla's gains will come from their battery production. The so called giga factory is attracting other companies like Apple for example.

My .02 is that the large cap field is the prime category NOT to hold multiple funds. Every time an analysis is done on managers adding value over indexes, large caps offer the least amount of alpha. Totally agree with Bob. The only way a LC is going to help you is to have a good stock picking manager with a focused agenda and one that will preserve capital when there is no value to be found. SEQUX, and I also think YAFFX and BBTEX, fit this bill. But you don't need more than one. Holding more than one, well... you lost your chance at adding alpha to that category.

VTWSX or VT the ETF - ER .35 or .18 makes up for hot managers over 40 years. Ask her to read one of William Bernstein's books on investing and discuss it with you.
She can add some bond funds 10 or 15 years from retirement. She can add a mid or small cap global or global dividend fund lwhen she has the money as she gains experience, but this is the simplest, cheapest way to start, and I wish I had done so several years ago for my children (as I now am).

I think I understand where you're coming from here, but I'm not convinced it's the right place. Sure, stocks are fully valued at this moment. But there seems to be thin value in bonds. And, anyway, your daughter has a 40+ year horizon.
I'd avoid balanced funds altogether, I'd especially avoid balanced funds that only hold domestic stocks (read VGSTX > VBINX).
Depending on the size of the gift, I'd look at either some sort of global fund that can be readily paired with a core bond fund (think DODWX, OAKGX, or VTWSX. I also like the suggestion of VDIGX) or just buying shares of a dividend growth stock. Coke looks a little under the weather lately. Consider what 100 shares of KO (or MCD, PG, JNJ, KMB, LKT, BHP or TROW, etc...) bought today would look like in 2054 with dividends reinvested.
If you are going to give a balanced fund, give a go anywhere fund with capital appreciation as a mandate. PRWCX, DODBX, VILLX come to mind.

Ever since Bill Gross wrote against the folly of capital markets and the misallocation of capital to serve its own end than any social good which I thought at the time was a surprising piece of indictment from an insider, I have noticed several attempts to discredit him. This just seems like a take down piece and latest in those attempts.

Related to cash holdings in a M F
David Glancey Portfolio Manager PVSAX PYSAX
Q &A
You have often said that you hold a significant
amount of cash in the portfolios to act as
“dry powder” if you should see buying
opportunities. The cash position has come
down in recent quarters. What was the
cash position in the fourth quarter, and
how did it impact performance or provide
opportunities?
At the end of the third quarter, we had lower cash allocations
compared with the second quarter. By the end
of the fourth quarter, the cash position had risen slightly
in both portfolios. Cash positions in the portfolios,
however, tend to fluctuate day to day. A lower cash position
was not reflective of a shift in strategy. I use cash to
act quickly and opportunistically. I do not necessarily
use it to be defensive, although there are times when it
can have a stabilizing effect.
https://www.putnam.com/literature/pdf/II911.pdf
Also; Putnam's David Glancy named Boston Capital mutual fund manager of the year. (PDF) 12/31/13
http://files.parsintl.com/eprints/80013.pdf
P S edit Feb 25 2014, 16:33 ET
Listed as over 5% holding in both Putnan funds as of 01/31/2014.Beware.
JAZZ
Jazz -8% AH. CFO resigns. 2014 sales guidance above consensus.
Along with its Q4 results, Jazz Pharma (JAZZ) announces CFO Kathryn Falberg is resigning, effective March 9, to "pursue other interests." Corporate development SVP Matthew Young is replacing Falberg.
Jazz expects 2014 revenue of $1.1B-$1.16B and EPS of $8-$8.25 vs. a consensus of $1.08B and $8.07. Xyrem net sales are expected to total $755M-775M, and Erwinaze/Erwinase net sales $185M-$200M.
Xyrem net sales +45% Y/Y in Q4 to $164.2M, Erwinaze/Erwinase net sales +26% to $43.5M. Opex +25% to $75.5M.
Q4 results, PR.

2. His style, which emphasizes capital preservation, is not the stuff that generally wins the adulation of the masses.

Which style is "in" today? Which tomorrow? Who is a star manager today? Who is a star manager tomorrow? Meh.
When Cramer was on "Live with Regis and Kathy" talking about how Heebner was his "#1 pick for mutual fund manager" (which ignored the fact that most of the people in said audience probably could not stand the volatility of Heebner's fund) I knew that was probably it for Heebner's star status for the time being (and sure enough...)
Janus Overseas was huge for a while. It's basically been a complete and total cluster-f for the last few years, with some of its largest holdings being absolutely ridiculous mistakes.
There have been others, there will be others.
As for Royce starting 50 funds and gathering assets, nothing new. They're asset gathers, like so many other fund companies.
There are not that many mutual fund managers I'm impressed with.

Agreed.
She also says she doesn't trust Contra's classification, so let's test it against different benchmarks. She comes up with MSCI US large growth - a virtually preordained result, since her other benchmark candidates included a blend index and two all-cap indexes.
It is curious that she assumes no style drift based on Fidelity stating that according to its definition of growth, Contra doesn't stray. If she's so skeptical of what growth means, and whether Contra is even large cap growth, isn't is possible that Contra does drift according to other definitions - perhaps even definitions that the ETFs use?
It is likewise curious that she then trusts that the ETFs do match their stated category (large cap growth). Even though as she noted, there's no standard for what "growth" means, and each indexer uses its own definition (along with its own buffer zones).
She then uses the ETFs' self-stated classification as LCG to select the candidate pool.
The benchmark is never used for the ETFs. The only function it served was to "prove" that FCNTX really is (currently) a LCG fund.
So why use the benchmark at all? Just use a larger pool of candidate ETFs in the second step (trying to match FCNTX). It's not as though her computer would choke on, say, 20-30 ETFs instead of the half dozen she chose via the benchmark's category.
Remember, her stated objective was to match FCNTX, not a benchmark. (The only reason I know for doing a two-step analysis as she did is to winnow the candidate pool, which wasn't necessary here.
What really put me off, though, was her opening tax "analysis". She takes long term gains, and then says, well, if we taxed them as short term gains, look at how much more it would have cost. Sure, and if pigs could fly ....
It was gratuitous. She never did anything with the figure. It was meant to shock. Had she analyzed post-liquidation, after-tax results, I would have been impressed.

So just exactly what is a "star manager", and do we agree with Jack Bogle that they are to be avoided?
To paraphrase Bogle, a star manager is "lionised in the press", bragged on in advertising. His past record is held up for admiration and as evidence that he has a special ability to beat the market.
To be a true star manager, I believe the manager's name must be known outside of the circle of those who follow mutual funds closely.
A corollary is that they are often managing a vast amount of money.
So has Charlie Dreifus become a start manager? Personally, I believe he may be on the cusp of stardom, but that there is still a chance for him to sink back into the relative anonymity that we would much prefer. Two big mitigating factors:
1. his oldest fund is closed at $3.4B.
2. His style, which emphasizes capital preservation, is not the stuff that generally wins the adulation of the masses.
Your thoughts, dear fellow mutual fund observers?

We'd have to ask Charles, since he's the closest thing to Data Monster we've got.
A quick glance at the last 15 years suggests that high-yield as a group was not notably better or worse than a 60/40 hybrid. It was much better than pure large cap equity exposure (the bottom line, in yellow). At the same time, one of the best high yield funds (WHIYX, #2 line in blue) was not nearly so excellent as one of the best hybrids (FPACX, #1 line in red).

For my perspective, your point about "sleeping easy" is absolutely key. If you can't stick with your investments, you can't profit from them. Folks would be infinitely better of planning for 6-7% nominal returns - which are achievable without gut-wrenching adventure - rather than shooting for double-digit gains. There certainly are folks utterly inured to great short-term losses (I'm one of them - '87, '01, '08 were all deeply annoying but not causes for changing course) but they're a lot rarer than we recognize.
David

FYI:
Regards,
Ted
Copy & Paste Barron's 2/22/14: Beverly Goodman
Noted investment manager KKR caused a bit of a stir earlier this month when it announced it will close two of its entrants into the mutual fund arena.
It's not that the funds themselves were so notable. In fact, they're about to be shuttered because they failed to get any traction in the year they were open. But it speaks to the difficulty of the ongoing quest to incorporate alternative investment strategies into a mutual fund format—and who can offer the most elegant solution.
In the case of KKR's two funds, it seems clear that mutual fund companies had an advantage. KKR is a pre-eminent investment manager, with much more name recognition than the typical hedge fund firm, and yet its mutual funds couldn't compete. It wasn't a matter of performance: The KKR Alternative High Yield fund (ticker: KHYKX) returned more than 7% last year, beating the category average, but the firm acknowledged in a statement that the fund simply had too many established competitors (a "very crowded marketplace") with long track records. The KKR Alternative Corporate Opportunities fund (XKCPX) returned 14% in 2013, but was an overly complicated hybrid product that came with an onerous initial-investment process and "lacks the daily liquidity most mutual fund investors expect." Both funds in about a year took in just $33 million, on top of KKR's $125 million in seed money.
And yet investors appear to be clamoring for alternative-investment strategies in a mutual fund structure. Hedge funds saw $6.9 billion in outflows last year, while liquid alternative mutual funds took in $40 billion, according to Morningstar data. And that category doesn't include fixed income: Another $55 billion went into unconstrained or nontraditional bond funds, the mutual fund answer to fixed-income and credit hedge funds. With some $360 billion in assets, hedge funds still dwarf the $139 billion in alternative mutual funds—but may not for long.
Many alternative managers, however, are now realizing that their investment expertise isn't enough to make them successful among retail investors. "Mutual fund firms are just better at navigating the landscape and understanding the business," says Josh Charney, an alternative-investment analyst with Morningstar, adding, "They've been marketing products since the dawn of time. Hedge funds have only been allowed to market since the JOBS Act went into effect."
Indeed, the big winners have been offerings from mutual fund firms. Long/short equity funds took in $20.5 billion last year, though the lion's share, $13.4 billion, went into just one fund—the $21 billion MainStay Marketfield fund (MFLDX), which saw its assets triple. It returned 16.9% last year, versus 14.6% for the long/short category. Performance helped, certainly, but MainStay is a part of New York Life, which has a 150-person sales force. "We don't even think of Marketfield as an alternative fund," says Steve Fisher, president of MainStay Funds. "It's just a mutual fund with a very flexible approach. Our distribution model helps advisors understand how our funds fit into a portfolio."
Hedge funds face challenges in reaching mutual fund investors, and developing relationships with their advisors. Mutual fund firms, meanwhile, face challenges in terms of hiring the talent necessary to manage alternative portfolios. Alternative mutual funds often carry a management fee near the 2% charged by most hedge funds, but they're not allowed to pay managers a portion of the gains—making it a much less lucrative opportunity for the manager.
RATHER THAN A PITCHED BATTLE between alternative managers and fund companies, though, the approach we're likely to see more of going forward is one of collaboration. Mutual fund firms can use their name recognition and marketing and sales prowess, and rely on the investing expertise of hedge fund managers. Many alternative mutual funds use subadvisors to manage assets. One of the most successful examples is Blackstone's partnership with Fidelity—in terms of both the development and execution of the final product.
Last August, the two firms launched the Blackstone Alternative Multi-Manager fund (BXMMX); its $1.2 billion in assets is allocated across 12 hedge fund managers including Cerberus, Wellington Management, and Caspian Capital. It's only available to the high-net-worth clients of Fidelity's Portfolio Advisory Services group. It's an exclusive arrangement for one year, but John McCormick, director of Blackstone's alternative asset management group, says the fund's appeal for "mom and pop investors," could also lend itself to inclusion in a 401(k) plan, variable annuity, or other insurance product.
Blackstone initially approached Fidelity several years ago with an idea for "a very different sort of product," McCormick says. After extensive talks and reworking, the two firms arrived at a fund that could exploit Blackstone's heft in the hedge fund world and Fidelity's reach in the retail world. "We're the largest allocator to hedge funds in the world," McCormick says. "If we ask them to build something special, they do it."
.

I use both the weekly newsletter and the Leadership Strategy as an aid in positioning my portfolio. Needless to say, it is not the gospel. Take for instance in the newsletter under Global Edge it is showing that the Emerging Markets, China and Latin America are trailing the rest. Since, I'd like to increase my exposure to this asset class I figure now is a good time to be buying more of it while it is out of favor under the theory buy low, sell high. I call this "buying around the edges" and thus far it seems to have worked well for me. In addition, the newletter seems to be set to faster changing triggers than those of the strategy which seem to be set to slower triggers which results for a longer holding period.
And, as golub1 states, buying out of favor assets is indeed a contrarian/value type approach. To be buying the more in favor assets and those that are moving upward in the ranking process would be more of a momentum style approach. I think the better gains can be had by "buying around the edges" approach and is one of my favored methods I use in the deployment of my cash.
To each his own as there are many ways to find success in investing as there is no one right way to go about it as the path to the top, no doubt, consist of many.

http://www.onwallstreet.com/news/many-unds-well-positioned-for-rising-rate-environment-morningstar-2688323-1.html?utm_campaign=daily-feb 20 2014&utm_medium=email&utm_source=newsletter
why you should be wary of small cap stocks
http://www.kiplinger.com/article/investing/T052-C007-S001-why-you-should-be-wary-of-small-cap-stocks.html

Reply to @Ted:As a Chicagoan I'm sure you're
familiar.In the old days,if you called BRUFX ,you talked directly with the manager. Excellent long term performance even with the '07-'08 down draft. No brokerage or fund super market availability.
http://performance.morningstar.com/fund/performance-return.action?t=BRUFX&region=usa&culture=en-US
Reply to @Ted: And sometimes,at least where taxes are concerned,these are not certain or sure! From Seeking Alpha Jan. 2, 2014 12:23 PM ET
"Mr. Buffett, a master of tax avoidance, is using some 19mm shares of PSX Berkshire currently holds to complete the acquisition. These shares have run up some 45% since Berkshire acquired them and this transaction avoids having to pay taxes on those gains."
My view,
When I see stories of perceived unfair tax rates,society's inequalities,tax unfairness etc.,often out of the mouths of Buffett,George Soros,Michael Moore,Nancy Pelosi, etc. I just wish they'd each write out a very large check to the U S Treasury to help with society's ills.
Warren Buffett Continues To Bet On The Bakken
http://seekingalpha.com/article/1925611-warren-buffett-continues-to-bet-on-the-bakken?source=email_alternative_energy_investing_oil_gas_ref_mar_0_5&ifp=0

Reply to @hank: I think you make a good point. Time intervals play an important dynamic in portfolio gains and losses. The "time rate of return" or how quickly a gain/loss occurs over an interval of time seems worthy of monitoring and should be a component of decision making.
Reallocating quarterly seems reasonable, but I agree that outsized overperformance and underperformance may cause one to act (buy, sell or rebalance). I pull from an investment if I have a gain of ~10% regardless of timeframe...doing this right now with USAGX. I add to a long term holding if I experience a ~10 % loss...doing this right now with MAPIX.

Portfolio gains and losses happen over timeframes of varying lengths. Losses usually happen quickly over short time intervals. Here's an interesting article on recovering from a portfolio loss. This illustration shows how different portfolios recovered after a 33% loss. Many investors move away from equities after losses which causes their portfolio to recover often more slowly.

russell.com/us/education_planning/investing_basics/articles/recovering_market_downturn.asp