Hello,
We're saving for next year's vacation. Will be putting aside money each month. Instead of putting it in a bank with very low yield, we're thinking about putting it in some mutual funds. Do you have any suggestions for funds that:
(1) have a decent yield
(2) capital preservation
(3) accept systematic investment plan - cannot come up with the initial $2000-$3000 investment
Thanks.
Yeti.

Reply to @Desota: Hi again Desota.
Finding a comparable low-cost, no-load Vanguard fund that outperforms CAIBX is an easy do...

Vanguard Wellington has outperformed CAIBX over the last 1, 3, 5, and 10 year periods.
So has FPACX, SEQUX, MAPOX.
Look, if you are getting CAIBX at 0.63 ER with no-load, you and I are in-g. But most folks are paying 5.75% front load plus the 0.63 ER...on a fund that has $80B AUM. Its investors should be up in arms!
Capital Income Builder too has 16 share classes...

If AF was charging 0.63 ER with no load on funds like Capital Income Builder, I would become its biggest fan. But it's not. Instead, this fund alone has skimmed $4.5B from its investors before earning them a dime. Plus $500M per year in fees whether it makes money for them or not.
All up, AF open end mutual funds have $1T AUM, round numbers. Apply similar fee practice, it means they have skimmed $55B from its investors' deposits plus $6B annually...win or lose. AF is bigger than Vegas!
AF should enjoy while it can, because it will not last.

A couple years ago I started buying IAU (iShares COMEX Gold Trust), thinking it would fill the role of a gold mutual fund. But today my tax account told me when I eventually sell it (hopefully for a profit), it will be taxed as a "collectible", currently at the 28% level. That's not exactly what I wanted. So I'm looking for recommendations for something that does operate as a mutual fund, invests in gold, and has a NAV that will generally reflect the price of gold, and when I sell it, the gain will be treated as a long-term capital gain. Thx.

Japan's economic results after recent actions:
http://www.zerohedge.com/news/2013-03-28/abenomics-farce-continues
"LORD Jacob Rothschild, a scion of banking’s most famous family, yesterday said his company had doubled its investment in Japanese stocks after the country changed its monetary policy, helping the value of its fund to surge.
Rothschild, a sixth generation descendant of Mayer Amschel Rothschild, revealed his fund outfit RIT Capital Partners had upped its investment in the Nikkei – by some £90m – due to what he dubbed the country’s “Keynesian experiment”.
He said: “We felt that the impact of reflationary policies against an undervalued stock market provided us with an exceptional investment opportunity,”
http://www.cityam.com/article/lord-rothschild-fund-reaps-big-windfall-japanese-stock-bet

Biotech and especially the Big Four of Celgene, Amgen, Gilead, and Biogen have been on an absolute tear the past couple days to add to their already large gains YTD. I play this sector by the Rydex biotech fund (RYOIX) if only because it is pretty evenly spread among the Big Four as opposed to some biotech funds which are overweight one or the other. With baby boomers turning 65 every 8 seconds it not hard to see why there is so much enthusiam for this sector going forward. Then again, the biotech boom has been in full force for over 10 years now.
Actually, the healthcare area that is the most on fire YTD and all thanks to next year's Obamacare are the hospital stocks - UHS, CYH, THC, HCA, and LPNT. I missed that area completely being asleep at the wheel.

Rather than own individual MLPs or even MLP funds/etfs, we like owning a more diversified fund in which MLPs make up a significant portion of the holdings. We have researched, interviewed, and are now using Goldman Sachs Rising Dividend GSRLX. It owns about 20% in MLPs, and co-manager Troy Shaver's background gives us a lot of reassurance this fund understands MLPs as well as any. We expect to be capturing gains from other dividend-based equity funds/etfs and moving these dollars to GSRLX. We think we can get our MLP fix, without all the tax ramifications and risks of owning just MLPs in a logical and reliable structure.

Blah couple of days.
Last buy of BAC stopped-out yesterday mid morning. Then, following quick 6% rise off 52-week low with speculative buy of CLF, it broke at open today on continued bad news. Day traders do not hold positions overnight =). BRK and COP continue to do fairly well, while GE is sideways. Remain very long BAC, since May last year actually. Trust it will regain momentum. Want to be in position to tax as capital gain versus income if heads south.
Becoming more interested in ETFs. Moved some RNSIX to BOND, although remain happy with the former's performance, CEF aspect of its portfolio, and as proxy to Mr. Gundlach. Exchanged WBMIX for more AQRIX. Still appreciate Mr. Redleaf et al, but needed to scale back equity exposure with my experiment of 10 mo SMA allocation method on D&C holding. Currently, have 75% in DODGX and 25% in DODIX, because...

A little caution to be aware of ,but as the last paragraph states,"What is interesting here is that many of these MLPs have risen since the offerings. Many were also upsized, implying that investor demand remains very strong. With Copano Energy LLC (NASDAQ: CPNO) being acquired for $5 billion or so in units and debt by Kinder Morgan Energy Partners L.P. (NYSE: KMP), investors are eager to get their slice of the pie here for those high payouts and the continued growth of the U.S. energy infrastructure."
Read more: MLPs Raise Mountains of Capital (BWP, CLMT, CMLP, DPM, EPB, EROC, EPD, EXLP, HEP, HFC, LRE, MEMP, MCEP, CPNO, KMP, KYN) - 24/7 Wall St. http://247wallst.com/2013/03/26/mlps-raise-mountains-of-capital-bwp-clmt-cmlp-dpm-epb-eroc-epd-exlp-hep-hfc-lre-memp-mcep-cpno-kmp-kyn/#ixzz2Oi0cW6LK
And more growth ,if and when,any of these permits are issued for the growth of export facilities across North America.JOBS ANYONE?
http://ferc.gov/industries/gas/indus-act/lng/LNG-proposed-potential.pdf
Huh??
http://uk.reuters.com/article/2013/03/22/ferc-enbridge-sandpiper-idUKL1N0CE9LU20130322

Here is a quick list.
1. Available NTF at Fidelity.
2.No load
3. Manager tenure greater than 4 years.
4. Top 20% in category for 1,3 and 5 years.
5. Open for investment.
Artisan International-ARTIX
Oakmark Int-OAKIX
Pear Tree Polaris Foreign Value-QFVOX
Wasatch Int Growth-WAIGX
Driehous Emerging Growth-DREGX
Fidelity Int Capital Appreciation-FIVFX
Matthews Asia Dividend-MAPIX
Wasatch Int Opportunities-WAIOX
Fidelity Pacific Basin-FPBFX
I personally have Oakmark (OARIX) and Driehous(DREGX). I suggest these 2 funds along with one of the Wasatch funds.
Art

But would a desperate state try to tax gains you made while living in their state? Especially if your contribution was made while you lived in another state.
For example, you establish a Roth IRA in New York and then retire to Kentucky. Kentucky might want to tax your withdrawals or a portion of your withdrawals and it would not be enough of an impact to cause you to move to say Tennessee.

Hi Guys,
A couple of days ago I posted a reference to John Bogle’s recent “Clash of Cultures” book and his 10 key investment rules. It seemed to me that Bogle’s work would be uncontroversial and that his rules would be graciously accepted given that both were the products of almost six decades of commitment to serving small investors.
I was dead wrong on that score. For completeness, here is an internal Link to my earlier submittal:
http://www.mutualfundobserver.com/discussions-3/#/discussion/5961/bogle-on-the-clash-of-cultures
It appears that ETF guru Ron DeLegge took umbrage with what he sees as a misrepresentation of the ETF industry. He challenged Bogle in several directions with a negative editorial.
Well, Bogle elected to reply so we have dueling editorials, a shoot-out at the OK corral.
The nmg Capital Group has assembled both editorials together in their archives section. The editorials are the second and third items at the following Link:
http://www.nmgcapitalgroup.com/category/investing/#.UUx-A0aIYQE
I now see why DeLegge took issue with Bogle’s reporting on ETF client behavior. It all goes back to the DALBAR-like finding that private investors only realize a small fraction of the annual returns that these products (mutual funds and ETFs) yield.
It relates to the poor timing instincts of entry/exit points that investors consistently demonstrate. The generic explanation is that individual investors succumb to a host of behavioral deficiencies. Bogle postulates that the trade-anytime feature of ETFs allow easier access to these behavioral flaws.
In his retort, Bogle repeats the mantra that frequent trading is hazardous to wealth, and ETFs encourage that losing behavior. In some earlier work, Bogle reported that over a 5-year study period, ETF traders underperformed benchmarks by a huge negative margin.
So the verbal shooting continues. Both sides score hits. Enjoy the dueling perspectives.
Best Regards.

Assuming you're only talking about energy MLP's then add KMI to your short list. I personally don't believe that mutual funds return enough of the generated income to shareholders so I would focus therefore on CEF's. There are plenty to pick from with Kayne Anderson and Tortoise Capital being the big dogs in the house. You might also want to search for MLP's and then by CEF symbols in the M* and Investor Village discussion forums. There's a good collection of knowledgeable investors in both forums.

http://abnormalreturns.com/focus-on-norway-not-cyprus/
"Investors are now focused on the drama in Cyprus. In contrast investors would do better to spend their time thinking about Norway. Why you ask? There are more investment lessons to learn from how Norway manages its oil wealth than trying to make decisions based on the latest news and rumors coming out of the Mediterranean."
"How much does the Norwegian portfolio hold in hedge funds? Nothing. Venture capital? Nada. Commodities? Zip. Private-equity funds? Zero. (WSJ)"
"The ministry argues that high management fees on private equity investments make the achievement of a satisfactory return from the asset class too uncertain. This is also the case for infrastructure, which is highly leveraged and where there is limited data on historical returns. (FT)"

We must remember that 99.99% of investors don't study the markets 24 hours a day.
Over the last ten years I've paid off my house, purchased cars, gave away thousands to an ex whatever she calls herself nowadays, etc -- and I'm still well ahead of the market averages with those expenditures included. How ? Well selected mutual funds.
Before that my former broker secured a capital loss of 100,000+ with several bone head moves. That was when I became a self directed investor and started trading myself. When I finally got back to even -- for the sake of my blood pressure -- I stopped trading. Also, I enjoy my free time out fishing better than reading charts. Constant living & breathing the market can pay off...but at what price? Some of us make it part of our daily ritual.. some just don't care.. I know i've found my own happy medium
Bottom line:
I still believe this article by IBD holds true for 99.99% of the general public. While my tiny winnie annuity contract doesn't come close to any 1,370,072 Donald Trump account -- It has caught a triple -- when the alternatives are factored in -- isn't that bad.
I congratulate you on your investment success & hope it continues.

Reply to @perpetual_Bull: I opened up an IRA account in April 1993 (Dow around 3400) with $2000 and a SEP IRA in April 1994. Total contributions to date $76,515 with a distribution (withdrawal) of $902.28 in April 1997 and a distribution of $6000 in January 2009. Total value this morning (including monthly accumulated dividends) $1,370,072. My taxable account has a better return but it would be impossible to figure out because of the constant withdrawals over the years as that account is used for living expenses, capital purchases ala homes, automobiles, etc.
Glad I never paid any heed to the efficient market gurus and the buy and hold crowd like John Bogle. There is a big advantage to being a small fry trader as opposed to a large hedge, mutual, or pension funds, especially if you are willing to live and breathe the markets 24 hours a day - a sacrifice few are willing to make.

I am a big believer in the compound effect and that the greatest wealth creating tool is the tax free compounding of one's capital over time. However, had I not been an active (very active) trader of mutual funds, especially in the late 80s and 90s when my account was much smaller, I would be looking at a very bleak retirement as I would have a much, much smaller nest egg.

Probably a distribution ... think there are mountains of unrealized cap gains at that fund. Check the Vanguard site; ticker in the fund search box, & go to the distribution tab once you're in the fund's pages. M* shows distributions on the quote pages, but they're sometimes a day or two late.

Reply to @Charles: Also picked up COP, as well, and very pleased with the announcement after the close last night (find co-owner Anadarko up 3.2% pre-market). Also like the 4.5% yield and dividend focus going forward. I also thought about buying a bit of Shell, but I didn't want any more Euro exposure (Shell A shares) or British Pound Exposure (Shell B shares.)
Some discussion from GE this morning that they may spin-off GE Capital down the road.
CLF is not a bad idea, especially at these levels. It may take a while, but you're about at 2008 prices. A lot of the iron ore/mining plays have been creamed (VALE is another) and many mining CEOs have recently departed.
Still on the shopping list - HTA and O (or ARCP instead of O) Maybe INF. There's definitely a few other maybes, as well.
"but I trust I am learning."
I've definitely had my share of stuff that didn't work out - I think trying and learning is awesome and important. Investing is one thing where I think you'll never know everything - there's always something to learn/experiences to learn from.

Hi Art,
You ask the perennial investors question. No forecaster ever has the absolutely correct answer since nobody is perfectly prescient or omniscient. Wall Street is littered with fallen experts who had momentary success, but failed to repeat.
This is not a current observation. Market forecasting experts have been doing the public a measurable disservice for over 80 years. As early as 1932 Alfred Cowles published his analysis of the inability of forecasters to forecast. Here is a Link to his classic paper:
http://cowles.econ.yale.edu/archive/reprints/forecasters33.pdf
Perhaps the best advice to be given is too not trust professional forecasters of any persuasion.
Bad decisions and Black Swan events happen everywhere. Bad decision making and Black Swan events happen more frequently in both the professional and amateur investment universe.
Indeed I did write "that individual investors make poor timing and product selection decisions". That’s not just me making noise; I am merely reporting investment industry research on investor outcomes.
To put a hard edge to my assertion, allow me to quote a summary conclusion from the 2012 DALBAR QAIB report (their 2013 report which will incorporate data through 2012 will be released shortly).
From DALBAR, their devastating overarching observation is "that individual investors make poor timing and product selection decisions". That’s bad news for the “average” investor. DALBAR finds that the average private equity investor lost 5.73 % in 2011 while the S&P 500 was delivering a plus 2.12 % return. Similarly, the average fixed income investor was only getting a 1.34 % reward while the Barclays aggregate bond market was generating a 7.84% annual return.
The fractional individual investor outcomes relative to what could be achieved from a simple buy-and-hold passive Index investment strategy is persistent over long timeframes. DALBAR demonstrates that the average private investor underperforms these standard benchmarks for 1-year, 3-year, 5-year, 10-year, and 20-year study periods. The average investor plays the Loser’s game. Charles Ellis addresses this issue in his 1998 book “Winning the Loser’s Game”.
Note how I kept emphasizing the “average” investor statistic. I truly do not believe that MFO members are average investors. Although we may not satisfy the Lake Woebegone standard of everyone being above average, I suspect we are as a cohort above the average mutual fund investor. Dissenting opinions to the contrary are invited. That’s why I am at full attention to mutual fund recommendations and analyses offered by MFO itself and MFO participants.
I score my portfolio holdings against relevant benchmarks on a quarterly basis. Like everyone else, even after careful research and review, I have made bad decisions. Although I infrequently adjust my asset allocation, and when I do, I do so in an incremental fashion, I do constantly search to upgrade poorly performing individual fund holdings.
Certainly, if a fund changes its management, or changes its investment strategy (like morphing from a concentrated to a broadly diversified portfolio), or changes its fee structure, or changes its trading frequency, divestiture decisions are easy if these changes nullify my reasons for initially committing to the fund.
Another more common reason is if the questionable fund consistently underperforms its appointed benchmark. This is not quite so easy a decision since the allowable underachieving time span is a debatable issue; the marketplace might just have momentarily gravitated away from the manager’s style.
So I constantly upgrade, but I am not putting any additional money into the markets. I am not moving into fixed income either; the payouts are barely keeping up with inflation. Our family situation likely differs significantly from most present MFO participants, and that difference is important. Our plans and needs are definitely not yours. However, we are not now abandoning the equity marketplace.
Both my wife and I have been taking MRDs (Minimum Required Distributions) for years and our portfolio’s value has continued to increase. Given our ages, our portfolio structure, and our withdrawal rates, the likelihood of our portfolio survival rate based on Monte Carlo simulations approaches 100 % (never exactly 100 % since it’s a probability estimate). Our portfolio can handle a major market hit and we would still not be in a financial danger zone.
Given our circumstances, our decision is to stand fixed with our slightly upgraded portfolio. The majority of the signals that we use to gauge the equity market’s health (momentum, GDP growth, P/E ratio, inflation) remain positive. This year’s early equity gains are a little disquieting, and a minor retrenchment would not be surprising.
Black Swans happen with lightening speed, so dedicated vigilant monitoring is the order of the day. That never changes.
In no way do I recommend our course of current inaction to you guys. Each of you is the captain of your own ship and must plot your own compass headings to reach safe harbor.
Good luck to all of us since bad weather is difficult to forecast with high precision.
Best Regards.

I have title this … Until We Meet Again … Because I have decided to take some time off and away from the board and reopen a door I closed many years ago on my golf game. Oh sure, I’d play form time-to-time but I would just bang the ball around so to speak and played for just plain old fun not carrying if my ball strikes were really pure.
With this I have copied, pasted and expanded part of one of my more recent post since I feel the market is reaching a topping out phase unless there happens to come along a QE4. Just in golf there is more than one way to play the course and in investing there is certainly more than one way to play the market. But, I wanted to leave you with how I see it in today’s time.
Hello,
Not saying this concept should be followed … but, here is what I have been doing since the S&P 500 Index reached 1425.
Since my risk tolerance for equities ranges from 40% to 60% within my portfolio I start selling equities down when they are close to making new 52 week highs thus reducing and controlling my allocation to them. Conversely when they are towards 52 week lows I’ll start building my allocation to them while staying within my allocation range of 40% to 60% which was determined by a risk tolerance analysis. I am striving to move towards the low range when equities are at 52 week highs and to move towards the high range when equities are towards their 52 week low valuation. In short words, buy low ... sell high ... while being mindful of my allocation range to equities. In 2009 and 2010 I was more towards the 60% range and since then I have been in a control sell down mode along the way even though I have made some special buys from time to time when I felt good value could be had.
Since the S&P 500 reached 1425 … I have been selling about a sum equal to one percent of my equities at each 25 point step mark of 1450, 1475, 1500, 1525 & most recently at 1550.
A little math, each step ranges about 1.7% to 1.6% between them so this allows for some equity asset growth along the way. In short words equities have grown by about 8.8% form the 1425 step to the 1550 step … and, I have taken a sum equal to about 5% of this to my pocket while letting the other 3.8% ride. So equities have still grown while I have been in my sell down process and they currently account for about 46% of the portfolio (by Xray analysis).
I’d much rather book some of my profit in a market uptrend rather than trying to make it all in a market pullback when there is a lot of selling activity occurring by others. If I decide to sell in a market down draft it would be more for capital preservation move while being mindful to where my equities are bubbling within my allocation range just as I am doing during this bull market upward run.
If I have not right sized my portfolio's equity allocation by the time a good market down draft presents itself I'd be doing so pretty quickly in getting towards the low range of my equity allocation. At my age of 65 capital preservation is important as well as the prospects of growing the portfolio over time.
Not saying this is perfect … But, it is what I am currently doing and it draws from the lessons I have learned through the years from not only from my late father but Mr. Market as well.
So with this ... I wish all good investing and good fortune until we meet again. I am going to go silent for a while and just sit back and just watch the board. My golf league will soon start play; and, I need to spend some time in getting my golf game in shape.
One of my late childhood friends was a PGA tour caddy ... Harry Caudell. Now it is time to see if I can put to use some of the things that Harry brought to my game as well as the late Clayton Heafner who gave me my first golf lesson at the age of six. Clayton is one of my city's favorite sons who represented the USA many years ago with his winning Ryder Cup play. For those that would like to expand their golf history knowledge I have linked some information about Clayton below.
http://en.wikipedia.org/wiki/Clayton_Heafner
It is interesting, my first scheduled match falls on Thursday April 11th, which is also my late mother's birthday and opening round at the Masters. I can assure you that my golf game is not the type that is found inside the ropes at the Masters although I wish it were. My golf league calls our opening event the Carolinas' Masters and, yes, we play for a green jacket too.
So, with me, it is now off to the practice tee that I go ... And we shall see ... “How good it can be to be on the tee again with my friend Harry C.” My aim is to stike the ball pure and if I can do that I'll be a contender within my league as Clayton taught me his secret to putting which is half the game itself.
“Good Investing” ... and, “Watch your Risk.”
Skeeter