As you know, Douglas Rao quit Marsico and went elswhere.
The managers who took over have not done well with other funds at Marsico.
Consesus opinion that I gathered here as well as at M*, wait and watch until there is a proof that peformance is deteriorating . My concers is that Harbor is liquidating its flexible capital fund, which was also managed by Rao. Looks like, either they do not have enough confidence in replacement mgrs or they have not collected enough assets and liquating it. I think it is the former rather than later.
Pls. let me know your thoughts.
Thanks,
Mrc

Is this worth buying in a taxable account with potential for high turnover and short term cap gains?

My son declines to comment as to the source of his money market exposure. I believe it to be a perk granted by his employer, HSBC. Rank has its' priviledges, as they say. He is out the the market, says that it is too risky per the potential gains, both stocks and bonds.

Reply to @Old_Joe: I think the issue that I have with the fund is that HSGFX is not a vehicle that could really capitalize on a downtrend that well if the market tanked tomorrow. Given the nature of the fund, a 12% loss in this fund could take a while to regain. The fund had double digit gains in 2002/2003, but has barely moved much either way on a yearly basis since then.

http://www.advisoranalyst.com/glablog/2012/08/20/confidence-and-enthusiasm-hussman/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+advisoranalyst+(AdvisorAnalyst+Views)
http://www.usfunds.com/media/files/pdfs/investor-alert/-2012-ia/2012-08-17/investor_alert-08-17-2012.pdf?utm_source=SubscriberMail&utm_medium=email&utm_campaign=IA-08-17-2012&utm_term=Download PDF Version&utm_content=c35a4e567cd7466eaaf4f1a8d1df0917
RBC: Market Week: August 20, 2012
The Markets
Equities had a sixth consecutive week of gains, with the small caps of the Russell 2000 leading the way for a change. The S&P 500 ended the week only a single point away from its year-to-date closing high, and the Nasdaq continued to be the best performer of 2012. Meanwhile, renewed appetite for risk left the 10-year Treasury yield only 8 points from where it began the year.
RBC WEEKLY COMMENTARY
Market/Index 2011 Close Prior Week As of 8/17 Week Change YTD Change
DJIA 12217.56 13207.95 13275.20 .51% 8.66%
Nasdaq 2605.15 3020.86 3076.59 1.84% 18.10%
S&P 500 1257.60 1405.87 1418.16 .87% 12.77%
Russell 2000 740.92 801.55 819.89 2.29% 10.66%
Global Dow 1801.60 1880.18 1893.85 .73% 5.12%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.89% 1.65% 1.81% 16 bps -8 bps
Equities data reflect price changes, not total return.
Last Week's Headlines
The Bureau of Labor Statistics said consumer prices saw no change in July, leaving the annual inflation rate at 1.4%. Energy costs, primarily for electricity, natural gas, and fuel oil, fell 0.3%, offsetting a 0.1% increase in food prices. Not including food and energy, core consumer inflation rose only 0.1% for the month.
U.S. industrial production was up 0.6% in July, according to the Federal Reserve. That was substantially higher than the 0.1% increases seen in May and June, and 4.4% higher than last July. Also, usage of the nation's manufacturing capacity rose to 79.3%; that's the highest level since April 2008. However, manufacturing activity in the Fed's Philadelphia and New York regions contracted by 7.1% and 5.9% respectively.
U.S. retail sales were up 0.8% in July. According to the Commerce Department, that was the first increase in four months and put sales 4.1% ahead of last July. Nonstore retailers were up almost 12% from a year ago, and sales of sporting goods, hobbies, books, and music rose almost 11% in the same time; both categories also saw the strongest monthly gains.
After a 6.8% increase in June, housing starts fell 1.1% in July, though the Commerce Department said they were still 21.5% higher than the previous July. Prospects for future construction improved as the number of new building permits increased 6.8% to hit a level that was almost 30% higher than July 2011.
The Conference Board's index of leading economic indicators continued to seesaw, rising 0.4% in July after June's decline and an increase in May. The biggest contributors were growth in housing permits and lower first-time unemployment claims.
Eye on the Week Ahead
With continued low trading volumes expected, economic reports from Europe could have as much impact as domestic data, while minutes of the Fed's internal debates about further economic stimulus also will receive attention.
Key dates and data releases: Federal Open Market Committee minutes, home resales (8/22); new home sales (8/23); durable goods orders (8/24).
http://www.pionline.com/gallery/20120819/SLIDESHOW2/819009999?utm_source=issue_alert&utm_medium=email&utm_campaign=alert_insider

Reply to @romroc: Just curious, romroc, but do you mean your son the banker thinks the stock market is about to tank, and if so, did he say why he then would be selling "his bond fund"?
Another lower volatility possibility, if you want to stay within the Price family, is PRWCX, Capital Appreciation, which is basically an aggressive allocation fund that's usually very heavy in stocks (but not right now - maybe in synch with your son's thinking!) and has a good long-term record. The schtick, more or less, is stock-equivalent returns with significantly lower volatility, and it's pretty much delivered on that strategy. I'd also do a 'me-three' on MikeM's suggestions as good choices.

In my attempts to slowly (key word "slowly") diversify away from junk I have tried to find bond funds with a hefty allocation to RMBS which have been improving with the rebounding housing markets. PONDX which is a favorite on this board fits the bill and where I have moved some of my capital. I can ramp up real quick if needed. The .70% daily move up a few days back was nice, especially for a bond fund. There was some news out Friday regarding Fannie Mae which could further help the RMBS market. One of this year's best performing bond fund (up almost 17%) and with one of the greatest portion of its portfolio invested in RMBS is Angel Oak Multi-Strategy Income Fund - ANGLX. It's available at most brokerage firms but the 5.75% load takes it off my radar screen. It has a C class without the load but a 1% exit fee but that class seems to be available only at Fidelity, or at least not available at Scottrade where my accounts are.

Howdy,
A thank you to all who post the links, start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around..... Is this "As Good As It Gets" for bonds going forward? For some bond sectors, perhaps.Flip a coin, eh? Goldman Sachs (GS) noted in early 2010 that the 10 year note was going to a 5.5% yield and later kinda apologized for that notation. Course, "As Good As It Gets" applies to all investment sectors, too. Are some equities overbought? I sure don't know, but a likely guess would be, yes. GS has a year end number on the SP-500 at 1250. Should I trust that number any more that the other 100 market fortune tellers spouting any day of the week?
I suppose the best two words I read recently about the markets were "we are defensively bullish". Okay, how about "optimistically bearish", too. Perhaps this house just needs to select a broad base of the100 best funds or etf's, set the tickers upon a large sheet of paper, stand back 15 feet and let rip with 12 darts. Done and finished.
Per David Rosenberg, July 27, 2012........
*****Markets were thrilled yesterday when European Central Bank president Mario Draghi said he would "do whatever it takes to preserve the euro. And believe me, it will be enough".
But Gluskin Sheff economist David Rosenberg said these were Draghi's famous last words, much like when Hank Paulson had said in August 2008, "If you have a bazooka in your pocket and people know it, you probably won't have to use it."
Or when Ben Bernanke said in June 2008, "the financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again."
Rosenberg said Draghi's words were pure rhetoric and he called Draghi a "leader of NATO - No Action, Talk Only - instead of a central bank".
Draghi's comments were widely interpreted as a return to the Securities Markets Program (SMP) which involves purchases of Italian and Spanish bonds. But Rosenberg said if this was in fact costless it would have been activated already.
He also poured cold water on talk about granting the European Stability Mechanism a banking license. "Frankly, this is likely to be a political decision in the end, which is beyond the purview of the central bank." And said a third LTRO (long-term refinancing operation) would do nothing more than buy some time.
Rosenberg argued that the underlying problem of Europe's sovereign and banking sector would ultimately hinge on its fiscal and regulatory policy and that there isn't much Draghi can do about it. *****
Personal note to the above: Mr. Draghi only mentioned saving the "euro"; nothing about saving any countries. Perhaps the "euro" will remain only in Belgium, the home of the ECB; into the future.
The data/numbers below have been updated.
As to sector rotations below (Fidelity funds); for the past week: (Note: any given fund in any of these sectors will have varing degrees of performance based upon where the manager(s) choose to be invested and will not directly reflect upon your particular fund holdings from other vendors.)
--- U.S. equity + .3% through + 2.4%, avg. = + 1.5% YTD = +13.8%
--- Int'l equity - 2% through + 1.6%, avg. = + .4% YTD = +9.2%
--- Fido Select. sectors - .8% through + 3.8%, avg. = + 1.3% YTD = +13%
--- U.S./Int'l bonds - 2.9% through + .12%, avg. = -.70% YTD = + 2.2%
--- HY bonds - .52% through + 0%, avg. = - .2% YTD = + 8.8%
An Overview, M* 1 Week through 5 Year, Multiple Indexes
I have added a few blips related to our portfolio and market observations at the below SELLs/BUYs and Portfolio Thoughts.
SELLs/BUYs THIS PAST WEEK:
NONE
Portfolio Thoughts:
Our holdings had a - .59 % move this past week. We'll stay where we are at for today; to find what the new week and perhaps the end of the month with Mr. Bernanke brings to the plate.
Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = + .63%, YTD + 10.3%). I will retain the below write from previous weeks; as what we are watching still applies.
--- commodity pricing, especially the energy and base materials areas; copper and related.
--- the $US broad basket value, and in particular against the Euro and Aussie dollar (EU zone and China/Asia uncertainties).
--- price directions of U.S. treasury's, German bunds, U.K. gilts, Japanese bonds; and continued monitoring of Spanish/Italian bond pricing/yield.
--- what we are watching to help understand the money flows: SHY, IEF, TLT, TIP, STPZ, LTPZ, LQD, EMB, HYG, IWM, IYT & VWO; all of which offer insights reflected from the big traders as to the quality/risk, or lack of quality/risk; in various bond sectors.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
The first two links to Bloomberg are for their list of balanced/flexible funds; although I don't always agree with the placement of fund styles in their categories.
Bloomberg Balanced
Bloomberg Flexible
These next two links are for conservative and moderate fund leaders YTD, per MSN.
Conservative Allocation
Moderate Allocation
A reflection upon the links above; we attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 5 funds (below) we watch for psuedo benchmarking are the following:
***Note: these week/YTD's per M*
VWINX .... - .41% week, YTD = + 7.67%
PRPFX .... - .02% week, YTD = + 3.32%
SIRRX ..... - .13 % week, YTD = + 4.67%
TRRFX .... + .25% week, YTD = + 8.05%
VTENX ... + 0% week, YTD = + 7.13%
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh? Hey, I probably forgot something; and hopefully the words make some sense. Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
---Below is what M* x-ray has attempted to sort for our portfolio, as of June 1, 2012---
From what I find, M* has a difficult time sorting out the holdings with bond funds.
U.S./Foreign Stocks 1.9%
Bonds 93.9% ***
Other 4.2%
Not Classified 0.00%
Avg yield = 3.72%
Avg expense = .55%
***about 16% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"; which doesn't always imply the holdings, eh?
-Investment grade bond funds 28.2%
-Diversified bond funds 22.4%
-HY/HI bond funds 14.5%
-Total bond funds 32.4%
-Foreign EM/debt bond funds .6%
-U.S./Int'l equity/speciality funds 1.9%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX.LW Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
ACITX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
LSBDX Loomis Sayles
PONDX Pimco Income fund (steroid version)
PLDDX Pimco Low Duration (domestic/foreign)
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
---Equity-Domestic/Foreign
NONE outright, with the exception of equities held inside of some of the above funds.

Reply to @ducrow:
Happy to help! Some thoughts
1. New fund. A hedge fund may not always translate to a good mutual fund. See NARFX (which was sold and turned into another fund.) Not comparing management of NARFX to this fund or anything, but I suppose it's a belief that a hedge fund strategy does not always carry over to the mutual fund world. However, the Whitebox fund is doing well so far.
2. FPA Crescent (FPACX) may have a couple of issues (structural - it could probably close), but I think it's still an excellent fund with a great manager in Romick (whose views I continue to agree with a great deal.) Personally, I don't know if I'd replace it or if this is an apples-to-apples replacement. The Whitebox fund is a new fund, but I think this is going to be a unique/unusual offering in that part of the stock holdings may be broad, but there may be a sizable portion in contrarian ideas/plays/themes - a further discussion by the manager regarding his nat gas theme is available in this Barrons article (http://www.forbes.com/sites/steveschaefer/2012/05/31/why-it-might-finally-be-time-for-natural-gas-to-make-a-comeback/)
Also note, from the Whitebox quarterly report: "Our fund is not currently “market neutral.” We have a strong “long-bias”. At
other times we may have a strong short bias. Our returns will reflect at least a
portion of day to day, normal market volatility. Our goal is to outperform not by
delivering smooth returns all the time. Our goal is to outperform by doing two
things. (1) Avoiding catastrophic capital losses that can derail an investment
program for years, or forever. (2) Being invested in areas of exceptional
opportunity wherever in securities markets those opportunities arise."
So, the fund definitely has the flexibility to dial up and down risk, to the point where it can have a "strong short bias."
3. Amusing name. Whitebox is a play on the opaque "black box" strategies that hedge funds often have. Their big thing is being transparent with shareholders in communications and otherwise.
4. Again, while the hedge fund may be highly regarded, new mutual fund. However, there is a lot available online about the manager. Their "Whitebox Selected Research" is enjoyable reading, both from the articles from others and the articles from Whitebox. Redleaf wrote a book, "Panic", about the financial crisis, which does not appear to be available new anymore from amazon, but is available used, and got good reviews.
5. One other interesting note: the co-manager of the fund is ROB VOGEL
Rob Vogel joined Whitebox Advisors, LLC in 1999 as a convertible bond trader. From 1995 – 1999, Rob was a convertible bond trader for EBF & Associates of Minneapolis. From 1991 – 1995, Rob was an actuary and ran statistical models to estimate insurance reserves. Rob holds an MBA from the University of Minnesota and a BS in Applied Mathematics and Statistics from the University of Florida.
If you look under the Whitebox Selected Research, there is an article from Hedge Fund Review, awarding "Whitebox Concentrated Convertible Arbitrage" the "Best Non-Directional Hedge Fund Over 10 Years"
So, beyond what's available on Redleaf, this gives you some idea about the background of another manager on the fund:
http://www.whiteboxselectedresearch.com/wp-content/uploads/2012/08/HFR-Article-on-Convertible.pdf
Under that article about the convertible arb hedge fund: "The fund’s investments are
guided by Whitebox’s distinctive
market philosophy. One of the core
themes is to “be more invested at the
bottom than the top”. This reflects
Whitebox’s view that contrary to
conventional investment theories,
markets actually tend to be more
risky when they are less volatile."
“When markets are less volatile,
prices are generally higher, which
probably makes them riskier,” Vogel
explains. “We aim to be less exposed
when markets are tranquil so that,
if the cycle turns and prices get
cheaper, we can add to positions.”
As for the last manager, I think this is awfully interesting: " Prior to joining Whitebox Advisors, LLC in 2002, Jason spent two years working with Nobel Laureate Myron Scholes at Oak Hill Platinum Partners where he developed models for long/short equity strategies. "
http://en.wikipedia.org/wiki/Myron_Scholes
____
Lastly, I don't really want to tell David what to do, but I do agree this is really a fund that would be perfect for a profile. It only has 9.5M under management, but a pretty highly regarded management team.

Excellent move on behalf of T. Rowe Price. A number of their funds including New Horizon and Capital Appreciation continue their consistent and solid performance as the reins were handed over to their successors.

Morn'in hank,
You noted: " But, if you think inflation will run significantly more than 1.73% (compounded annually) than bonds today do not reflect reality very well. Catch has made much of the "capital appreciation" potential of rate sensitive bonds. That's true as long as investors continue to buy - eerily similar to the speculation that drove NASDAQ to 5000 a decade ago or real estate through the roof more recently. Now, much $$ was made from the "capital appreciation" in these sectors even after prices soared into the stratosphere. Nothing wrong with that as long as you're not the last one standing when the music stops."
>>>>> I agree. Don't be the last one standing when the music stops; regardless of the investment type.
Regards,
Catch

Over the very long-term, financial markets tend to reflect reality. In rate sensitive bonds, the most important being inflationary expectations for future years and, to a lesser extent, political & economic stability here and abroad as BobC references. (For lower tier bonds, ability of issuer to repay is crucial - but sounds like discussion's more about higher tier). We came close to a deflationary collapse in '08 - and still may get there - no predictions from this corner. If you think that's where we're headed, buy bonds. You'll be able to purchase food, shelter, cars etc. for less 10 years down the road while growing your nest-egg at a compounded 1.73% as of this morning. But, if you think inflation will run significantly more than 1.73% (compounded annually), than bonds today do not reflect reality very well. Catch has made much of the "capital appreciation" potential of rate sensitive bonds. That's true as long as investors continue to buy - eerily similar to the speculation that drove NASDAQ to 5000 a decade ago or real estate through the roof more recently. Now, much $$ was made from the "capital appreciation" in these sectors even after prices soared into the stratosphere. Nothing wrong with that as long as you're not the last one standing when the music stops.
Don't much follow bonds ... but there have been some "wiffs" of inflation recently which probably spooked some of the bigger players. Housing prices in some U.S. markets have started to rise. Food prices look to be on the rise due to drought conditions across much of the country. Gas is back over $4.00 in many places. Getting back to "reality", if you think 1.73% compounded over 10 years represents a reasonable return of your investment after taking into consideration your inflationary expectations, than snatch up some treasuries this morning. If you believe that's not realistic, than they represent a poor long term investment. As BobC noted, things don't move in a straight line. Treasuries will rally at some point and may do very well again if deflationary signals return or if the speculative fervor resumes. In thinking how financial markets move, Abby Joseph Cohen used to use the supertanker analogy. I like the words of T.S. Eliot who when discussing how the world will end says: "Not with bang, but a whimper." A good analogy I think for how painfully long it might take for bond markets to change direction.

Symbols: MFCFX , HAFLX
Harbor Funds filed for the liquidation of its Flexible Capital Fund.
http://sec.gov/Archives/edgar/data/793769/000119312512351522/d396969d497k.htm
Chautauqua Capital Management Names A. Douglas Rao Partner And Co-Portfolio Manager
http://www.marketwatch.com/story/chautauqua-capital-management-names-a-douglas-rao-partner-and-co-portfolio-manager-2012-08-14

Reply to @msf: Excellent points. When we were very young and beginning to invest it soon became obvious that we were completely unequipped for this discipline. We were fortunate to find an honest adviser, and with American Funds we helped put his kids through college on that 4.5% up-front load. He's also been a great help to us in a number of ways over the years, and I have no regrets regarding his up-front spiff. The funds that he put us into did what he said they would, and did and do in fact have very reasonable ERs.
We had long had a money-market fund, Capital Preservation, with the Benham group. The Benham funds were sold to American Century at some point, and we watched closely and found that the new company did continue to run this fund without significant change, as promised. This led us to explore other American Century funds, and we found some funds similar to those of American Funds, also with low ERs, but with no load. Using the American Funds experience as a template, we gradually extended our investments with American Century, continually comparing the relative performance. For the most part, we used American Funds for IRAs, and AC for non-IRA.
Then we discovered FundAlarm, with it's great ability to compare equity fund performance, both against other funds and against a benchmark. We did this about once a month, and gradually became confident enough to move into and out of different funds based upon their performance.
We have learned many things from experience, and much, much more from the FundAlarm and MFO contributors (that would be you guys). We have been very fortunate, and done quite well overall. But there is no getting around the fact that one decent adviser, putting us into American funds, started us down that long investment road. Stodgy but safe. That original 4.5% load was well worth it for us.
Would I recommend American Funds for someone just starting out today? No.. no need to pay that load. I would instead suggest either Vanguard or Fidelity, and lots of questions here on MFO.

Reply to @perpetual_Bull:
Old news.
"(July 01, 2011) SEC Sides with American Funds Against Finra. It took six years, but, thanks to the SEC, Capital Group just defeated a $5-million attack from the NASD, now called Finra. Last Friday the commission overturned [the] Finra finding."
http://www.mfwire.com/article.asp?storyID=37219&template=article&bhcp=1
Includes links to the ruling, and to M*'s take on it.
I tend to view Vanguard and American Funds as more similar than different. As Desota notes, they are each the low cost leader on their respective sides of the load/noload fence. They both tend to be rather stodgy families that are slow in introducing products (where's that international bond fund?) slow to work with evolving sales channels (Vanguard playing catch up with ETFs, slow to adopt online trading), etc.

Reply to @Mark: A couple of somewhat "Berkshire-like" vehicles (no particular order)
1. Greenlight Re (GLRE). This is a reinsurance company where the float is invested with the same positioning as hedge fund manager David Einhorn's long/short Greenlight Capital. It has not done that great in the last year or two - it really follows peer companies at times - but is somewhat interesting. It is a Cayman company, and there are other hedge funds looking for permanent capital that are planning the same thing - Third Point and SAC. I don't own GLRE.
2. Fairfax Financial (FRFHF.PK) Fairfax's float is invested by Prem Watsa, who has often been called the Canadian Buffett. Fairfax also actually generated a positive return in 2008 betting against subprime. From Morningstar: " In recent years, Fairfax produced stellar investment results as it capitalized on the financial crisis with prescient credit derivative bets. Fairfax's investment record over the long run is very impressive as its common stock portfolio has outperformed the S&P 500 by an average of 8.7 percentage points per year over the past 15 years. Similarly, its bond investments outperformed the Merrill Lynch U.S. Corporate Index by an average of 4.1 percentage points per year over the past 15 years. These outsized investment gains have translated into book value gains averaging nearly 25% per year since 1985." (http://quote.morningstar.com/stock/s.aspx?t=FRFHF&region=USA&culture=en-us) I don't own Fairfax.
3. Leucadia (LUK) There is no insurance component, but Leucadia is otherwise often compared to Berkshire and, despite a poor last year and unpleasant 2008, the conglmerate otherwise has an excellent very long track record. The conglomerate is a mix of holdings in public (financial firm Jefferies) and private (including a joint venture with Berkshire Hathaway and even vineyards. I don't own LUK - it did not do well last year but for believers in the long-term record of the firm, it would be a value play.
Other conglomerates that are less Berkshire-like that I like are Brookfield Asset Management (BAM) and Jardine Matheson (JHMLY.PK) Jardine is an Asian conglomerate that has been around since the 1800's and owns everything from grocery stores to Asian IKEAs to Manadrin Oriental hotels and more. Brookfield is an enormous Canadian conglomerate consisting of renewable energy assets, infrastructure assets and massive real estate assets around the world. The assets are largely in spin-offs (much of the real estate assets will be spun off in another limited partnership later this year - if that happens, shareholders in BAM will get a special dividend) and Brookfield is an asset manager. Both yield +/- 2% otherwise. I own both Jardine and subsidiary Dairy Farm, as well as Brookfield and Brookfield Infrastructure (BIP)
Berkshire is Berkshire, one certainly can't argue with one of the most successful records of all time. I do have some issues with some of the subsidiaries, which I think .I think it will be interesting to see Berkshire's eventual transition.
The issues with Fairfax is that it's nearly $400 a share and it does generate a dividend (about 2.5%)
History of Jardine Matheson from the 1800's: http://en.wikipedia.org/wiki/Jardine_Matheson_Holdings
DEFINITELY DO RESEARCH BEFORE INVESTING IN ANY OF THE ABOVE.

Reply to @scott: Thanks for your follow-up, Scott. I received the following response from Scottrade, so it sounds like ST does not have option for them to auto reinvest ETFs/Stocks..
"We do not currently offer dividend reinvestment for stocks or Exchange-Traded Funds (ETFs). Cash dividends paid to your account are added to your available money balance. The current credit interest rates paid on cash balances is available on our Credit Interest Rates page.
Currently, automatic dividend and capital gain reinvestment is only available for mutual fund positions.
We offer the option to have cash dividends mailed from accounts automatically. Accrued dividend balances are mailed twice monthly, on the second and last Wednesday. In order to request this automatic payment option, please call your local Scottrade team.
If you wish to participate in a dividend reinvestment program (DRIP), you will need to sign up directly through the transfer agent of the company in which you own stock.
If the security in question is eligible for transfer through the Direct Registration System (DRS), you can have your shares transferred to an account with the company's transfer agent at no cost. You will need to complete a Direct Registration System Request - Outgoing form and submit it to your local Scottrade team for processing. This form is available online through our Forms Center."
Re other brokerages... I guess they all have some negatives, so it's just a matter of choosing the one where the negatives are least important to you.
As far as you know, do ANY of these brokerages automatically transfer the history and cost basis of all investments if you transfer investment accounts/portfolios?
Re "Record", "Pay Date", etc. I have only been checking these through M*, so another novice question, if that's ok. How do I access current "record dates", "Pay Dates", etc.? Do I need to try and find the web site for each etf/stock to see if I can locate these there, or do you know of one site that may have these information for most etf/stocks?

Dian, it would seem to me that you have a good background and grip on the situation. If I read your initial post correctly you feel that your financial house is in pretty good order and this gift is icing on the cake, a truly great position to be in.
You have already received a number of useful checkoff items and suggestions (e.g. eliminating bad debt, avoid the banker, spread your assets around, avoid the bankers advice, watch out for the sharks, avoid the banker etc.) and did I mention avoiding the banker. You might also wish to include insurance sales folks in that avoid list when it comes to what you should do with the inheritance. You have also received some fund and annuity suggestions and information. You have not mentioned how the assets (inheritance) are currently allocated and maybe it's not important to this discussion except that your uncle was a saver and apparently did quite well in that regard. You mentioned looking for tax free or at least tax-friendly investments. I'm not sure if you are looking to put things on cruise control or if you might want to dabble in active management.
Assuming I have everything correct so far, and in what might be considered blasphemy on a mutual fund discussion board, might I suggest that you give uncle Warren Buffett (Berkshire Hathaway A or B shares) your gift to invest. Here's why I would do this.
1. Any mutual fund, annuity, rental property and so on is going to come with on-going fees, possibly taxes, maintenance costs, headaches and whatever else I'm forgetting until the day they are exhausted or disposed of. You may or may not wrestle with thoughts of "Gee, did I buy the right fund, plan, property" or wonder if X, Y or Z might be better suited or more appropriate.................. the list is endless.
2. Berkshire Hathaway is notorious for not paying dividends or distributions (read: no taxes) and your gains will just keep accumulating until "you" decide to sell at a time and place convenient and tax-managed by you.
3. If you buy the 'B' shares you will be able to "gift" them at possibly tax-friendly opportunities to family and charitable causes.
You will of course pay stock trading commissions but you can minimize those depending on your choice of brokerage firms. I am also fully aware that the current managers of Berkshire (Warren Buffett and Charlie Munger) are getting up in years but I am not concerned with their succession plans. It is something that you will have to look into and decide for yourself.
Just an alternative thought, quick and dirty. Congratulations and best wishes.

Howdy Dian,
First, I salute your compassion and endurance for your longtime efforts with your family members. Second, you mentioned Will from a few years ago; and I have have wondered how his plan has worked with the monies. Thirdly, your note indicates a very good program in place for teaching the young'ins, that your house has maintained a working and productive budget over the years, which now finds you and yours in a very nice monetary position. Hats off to your house for this effort.
Okay.....you mentioned being able to visit a Fidelity office; and this is my one and only notation regarding an annuity (any annuity), although a tax attorney and one's special circumstances could offer other thoughts regarding other types of annuities, too.
Fidelity has a plain annuity, without any frills, and the primary function is to tax shelter current earnings, but gains will be subject to ordinary tax with withdrawals, as normal. No insurance benefits, etc. with this plan. This annuity could be for a circumstance such as you have encountered; being a spot to grow monies and defer current taxes. I too, as has been mentioned, will agree about possible muni bond funds. Fidelity has a few that have performed well, with multi-state exposure to lessen local impacts from a default; although you would not receive a full tax edge with such funds.
Fido Muni Funds
The goods:
--- Fido Personal Retirement Annuity, Main page
--- 55 Funds, Avg. Annual Returns, Quarterly Numbers
--- Funds, short term performance, 1 year-YTD
Before I forget, there is a limit as to how many times one may transfer (I recall 4) monies among the fund choices with this annuity and this would be a question for the Fido office; although I know the info is plugged somewhere into the web links above.
Briefly, this annuity cost = the expense ratio of the underlying fund and a .25% annual fee on invested monies. My quick and dirty view indicates an average total of about 1% expense.
One has 55 fund choices, including long time well managed funds as Growth Co. and Contra, as well as funds from Blackrock, Franklin-Templeton, Invesco, Lazard, Morgan Stanley and Pimco. There are 12 target date/retirement funds (Freedom and Funds Manager) that I personally would not use, so one has 43 remaining choices. If you chose such an investment, it is possible that some fund style overlap would exist for this measured against your other tax sheltered accts.
The combined YTD return (if one had placed equal monies into all 55) is 10.3%.
If our house came into a large sum of inherited monies, and we needed more time to consider other investment areas (rental house, etc) or a place for some of the money; I would not hesitate to place monies here for parking. Yes, when we developed a plan for some of the money, we would be taxed upon withdrawals; but I/we would rather pay tax on a gain, versus parking the money in CD's at the credit union during this low rate period.
I recall Vanguard, and Jefferson Pilot Ins. Co having a similar annuity type, but I do not have any details.
Lastly, a consideration of 529 accts or state pre-paid tuition programs, if not already in place; or that anyone may add monies to a 529 acct. for the grandchildren. We live in MI, but have our daughters 529 acct. with Utah. 529's may be opened and maintained with very low annual amounts; but the one snag is some lack of control of what funds the monies are invested, as only one transfer/shift of monies per calendar year is allowed from and into any investment style/funds.
I will also agree with other's notations here, based upon most of your monetary bases having been covered; is for you and yours to treat yourself and indulge a bit.
Okay, winding down a vacation and time for the head to hit the pillow.
Take care,
Catch

Hi Diane
sorry to 'bud in'. You may consider having different accounts at different firms [i.e. fidelity, schwab, vanguard], etc... Previous recessions taught me a lesson [although I am very new at this game] to have your eggs in different baskets so they all don't break. I think if you have accounts in schwab the fees are free [at least this is what they did for me]. Also at this stage of your game, capital presrevation maybe your ideal and ultimate goals. You may consider buying couple of funds that have these ideal goals. My mom asked me these questions just right before the crash, I was very new at this game and she was scare at that time; she ultimately got an annuity [only a few hundred thousands] and she is still pleased w/ the results.
maybe you consider getting the best few funds that are posted in this board and put money in those baskets [funds that are owned by catch22 that he post weekly - I would consider these ultimately the safest]
good luck