Hey There Skeeter,
You noted: "If money in your pocket is important, one might wish to look at how much the fund also puts in your pocket along with its total return."
Okay, you got me go'in down the road of confusion with this.
Total return is total return, yes? Be it from yield and/or capital appreciation or the combination.
Example: Two equity/income funds have a blend of equity and income holdings, with each having different yields at any given time, over a period of time.
It is possible that both funds could have near identical "total returns" over a period of time. But this doesn't indicate that one fund is better than the other from looking at just the yield.
Regards,
Catch

Honestly, I might prefer a fund like OAKBX (closed but I keep an open door to it) of FPACX, but Vanguard Tax Managed funds are very interesting for anyone who does not like to make bets on a single manager. And they may become even more interesting once the taxes on dividends and capital gains will grow.

I own USBLX, USAA Growth and Tax Strategy. The fund invests primarily in Municipal bonds which are federally tax exempt as well as blue chip stocks. Its equity holdings make up 45% of the fund with the rest in munis. I believe munis bond funds have a good chance of capital appreciation since many cities and states will try and restructure their debt at lower rates over the next few years.
I have witnessed first hand the capital appreciation of my Long Term Treasury bond funds as the federal government has restructured their debt through all kinds of QE. I see a QE on the horizon for states and local agency's long term obligations. Of course, this all will end and reverse itself with a rise in interest rates but, in the mean time this seems to me a logical short term investment idea. Municipal bonds for tax free capital appreciation and stock market downturn protection while at the same time holding blue chip stocks for dividend and growth in market upturns.
USBLX profile:
"The investment seeks a conservative balance for the investor between income, the majority of which is exempt from federal income tax, and the potential for long-term growth of capital to preserve purchasing power. The fund typically invests a majority of assets in tax-exempt bonds and money market instruments and the remainder in blue chip stocks. It is managed with the goal of minimizing the impact of federal income taxes to shareholders."
I hold this fund in a taxable account and I like the performance so far. Yahoo categorizes it as a conservative allocation fund but, I believe its tax efficiency makes it a bit unique when compared with this group of funds. I would like to think it might match up against VWINX but, with a bit more tax efficiency. Here are the two compared over the last three years. VWINX was less volatile during the during the 2009-2009 downturn but USBLX has bounce back nicely. I will keep and eye on both as the muni debt restructuring story unfolds.
Here's one from Bloomberg:
http://www.bloomberg.com/news/2012-04-27/yields-seen-declining-based-on-200-year-history-muni-credit.html
Wondering if anyone is aware of similar type funds that would have a slice of municipal bonds and a slice of equities?

Howdy,
Again, a thank you to all who post the links and also 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.....May-Be there will be the Go Away in May within the next 30 days and return again in October, eh? 2010 and 2011 had these cycles; with special help from Europe, and in particular, Greece's situation, let alone mention the U.S. debt downgrade in July, 2011. Ted recently noted that he will be off-loading equities and moving to cash at the end of May. For the numerous investors at MFO who have the skills to move monies in a timely fashion; they may find equity returns of +20 through +40% for 2012, depending on the equity sectors and percentages involved in their holdings. I sincerely salute all who will be able to attain these goals.
To the "lite" side of life. I will soon begin my special weekend project helping the local school band boosters raise monies for various projects with selling raffle tickets for the "cow pie" drop. The annual town carnival will be in place the first week of June. A young cow, will be inside a small corral; with numbered squares placed upon the ground. As a "cow pie" is produced, the square number will be noted. From a box of sold raffle tickets, the related number ticket will be drawn for the winner. "Cow pie on number 4 and the 4th ticket drawn is the winner. Winners will be drawn on Sat. and Sun.; as pies are produced. A $1 ticket = a $100 chance win.
As to sector rotations below; 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.)
--- U.S. equity +.55% through + 3.2%, avg. = +.4%
--- Int'l equity -1% through + 1.9%, avg. = +.34%
--- U.S. eq. sectors - 3.5% through +3.9%, avg. = +.4%
--- U.S. IG bonds -.08% through +.46%, avg. = +.03%
--- HY bonds +.20% through +.87%, avg. = +.18%
The 3 best groups among the U.S. equity sectors were retail, nat. gas and biotech. The best in the IG bonds were TIPS funds, with Ginnie Mae's being slightly down and in last place. Int'l equity (generally Europe) performed the best overall, with Latin America and China regions being weakest with losses. There is an obvious large spread among some of the areas listed above. Now if we can only discover the forward paths.
You may consider our portfolio to be quite boring, but you may be assured that it moves and bends about each and every day; from forces beyond our control. We retail investors will find many interesting investment periods to ponder, as usual, in the coming years.
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 + .67 % move this past week. Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = +.29, YTD +10.2%). Plodding along. While IG bonds are not setting returns on fire; they are not giving ground to the recent equity rally. Among the writing and talking head professionals, one will find enough folks in both camps who won't own anything but equity or bonds. These folks are always at war to make profits. Both camps, using the best of their skills will make a profit. For we retail investors; it comes down to your risk/reward tolerance in conjunction with your skills, as well as how much money you can afford to lose and still maintain a most comfortable life style. We surely are not all in the same boat for this area. The so-called 1% and 99% exists here, and with other retail investors, too.
The old Funds Boat is at anchor, riding in the small waves and watching the weather. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
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 .... + .72 week, YTD = + 4.67%
PRPFX .... + .81 week, YTD = + 5.66%
SIRRX ..... + .22 week, YTD = + 2.69%
TRRFX .... + .84 week, YTD = + 6.98%
VTENX ... + .80 week, YTD = + 6.24%
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 March 9, 2012---
U.S.Stocks 10.5%
Foreign Stocks 6.8%
Bonds 78.5% ***
Other 4.2%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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
APOIX 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
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

Dear Tony: I intend to liquidate my capital appreciation portfolio of funds the last week of May, and move to cash and bond funds. I will re-enter the equities market in early October.
Regards,
Ted
Trading Calendar: http://www.cxoadvisory.com/trading-calendar/

Hi scott,
Yes, I agree. But, our house is not beyond hanging monies out here and there; while still maintaining a balance towards more captial preservation areas (whatever those may be in the years ahead...) To this, as we have discussed, there may be a point in time within the next 10 years when some bond types will not be preservers of capital.
Thanks for your thoughts.
Catch

Reply to @catch22:
Hi Catch,
Thanks for your response to my question that I presented to you that asked how you felt one should position for a rising interest rate environment.
Reading what you wrote … In short words … You felt that high yield, short maturity and floating rate funds should fair better than other sectors. I trend to agree with you on that. Currently, I don’t hold any floating rate funds although I do hold some funds that have some floating rate securities in them along with some convertible securities.
Below I have listed what I consider to be my income generating funds within my portfolio. The yield is detailed in (x.xx%) following the name of the fund. I do own some stocks but I have not listed them.
Most of my income funds are listed below in which I hold meaningful positions. They are LIGRX, Loomis Sayles Investment Grade Bond Fund (5.16%) … LALDX, Lord Abbett Short Duration Income Fund (4.41%) … NEFRX, Loomis Sayles Core Bond Fund (4.14%) … STIAX, Federated Strategic Income Fund (5.66%) … CAPAX, Federated Capital & Income Fund (5.22%) … FKINX, Franklin Income Fund (6.56%) … NEFZX, Loomis Sayles Strategic Income (5.85%) … ISFAX, Lord Abbott Diversified Income Fund (5.44%) … PASAX, Pimco All Asset Fund (6.63%) … PGBAX, Principal Global Diversified Income Fund (5.29%) … TPINX, Templeton Global Bond Fund (6.12%) … IGPAX, ING Target Payment Fund (6.29%) … TSIAX, Thornburg Strategic Income Fund (6.32%).
Some of my growth and income funds that are kicking off good distributions are AZNAX, Allianz NACM Income & Growth Fund (8.70% distribution) … TBIAX, Thornburg Investment Income Builder (6.36%) … EADIX, Eaton Vance Tax Managed Global Dividend Income Fund (4.97%) … AMECX, Income of America Fund (4.02%) … CBIAX, Capital Income Builder (4.11%) … PMDAX, Principal Small & Midcap Dividend Income Fund (4.08%) … LPEFX, Financial Private Equity Fund (9.33%) … and, JCRAX, Jefferies Asset Management Commodity Strategy Fund (8.02%) plus a few others as this list is getting to long (twenty funds) to keep going, but these are the higher yielding ones.
Let me just say this … currently if it is not kicking off some type of income distribution in some form and fashion … I don’t own it … anywhere within my portfolio … even with my small and mid cap funds they have to provide some income. As you can see the theme here is diversified income generation.
I don’t know how this “hodge podge” of funds will hold up in a down draft … but, before the risk grade site closed … to individual investors … most of these funds scored real well. Boy, I do miss that site.
Catch thanks for taking the time to write your thoughts on fixed income. I went beyond fixed income in my response back to you … but, as you can see I am all across the board with funds that generate income for me … perhaps, it might help some readers find some income generating funds that they might wish to do their own due diligence.
Thanks again for your response … I’ll take a look see at some floating rate funds.
Skeeter

Reply to @Flack:
Hi Flack,
Good to hear from you.
Actually, I was thinking of you the other day as I was thinking this was the type of market that the new age investor would enjoy in so much as it was now getting more challenging, at least it has for me. From my thoughts the easy money has been made until we have a good ten percent pull back or so. This would put the S&P 500 Index around 1280 off its recent high of around 1420 and/or Morningstar is showing stocks with a good 10% discount in their Market Valuation Graph. Naturally, I’ll use technical analysis to help pick entries and average in through a process. Curremtly I have the market (S&P 500 Index) around a P/E Ratio of 13.
You may recall when our paths first crossed I was 15% cash, 30% income and 55% equity. Within cash, I was 5% demand and 10% time deposits (CDs). I lightened up income by 5% in October of 2010 as fixed was facing a rising interest rate environment until the European debt crisis came on the scene and with this many investors moved back into fixed an exited equities. I did not as I was finding better opportunities in equities as I played the equity swing with special positions. Today, I am still doing this but, I will have to wait for the next set up before I begin to load special equity positions again. I was fortunate last summer as I caught the markets in a good pull back and bought special positions during the summer. I began to sell them off with good gains as the market moved upward. I completed this process recently leaving my equity allocation at 50% which is a neutral equity allocation for me. I plan to wait here at 25% cash, 25% income and 50% equity until the next equity set up comes. Besides, I now have more demand cash as a good number of my CDs have matured … and, I need to make at least lost interest money. I have now more than done that thus far this year.
Fortunately for me, I don’t have to max my special investments to the extent that a hedge fund or an institutional investor might. I just need to continue to make enough to make my world work. So, I don’t take the risk they do through the use of leverage, shorting and other special strategies they use to maximize return although I do hold some mutual funds that do this. The burden to execute these strategies rest with them and not me and that is why I pay their fees for doing this. Besides I believe this is beyond my skill level as an individual investor. However, I can, somewhat, regulate my risk exposure by adjusting my asset aoolcation.
I believe, one of the board’s missions is to help other investors transverse the path of investing. With this, I enjoy being a contributor of post that I believe others will find of interest. I am happy that this post has found the interest that it has and you chose to make input.
I going to close saying … I await the next set up.
Take care Flack … it was indeed good to hear form you … and, as always your input and comments are welcome. They helped me in the past and I am sure they have helped others that you have not heard from.
My best,
Skeeter

A new stimulus: Have Wall Street bail out Main Street
-A mass mortgage refi solution is getting support from both sides of the political aisle. And it wouldn't cost taxpayers a dime.
-Written in January of 2012 by Allan Sloan of Fortune:
"Main Street taxpayers have bailed out Wall Street. Now it's time for Wall Street to return the favor by footing the bill to help millions of honorable Main Street borrowers pay lower interest rates on their mortgages, something that should have happened years ago. Wall Street giving back to Main Street -- imagine that!"
It's impact on REIT Investors:
"We're talking about doing $2.1 trillion of refis: 13 million at an average of $160,000. That's about $150 billion of lost market value to holders of the securities. Some small investors would be hurt, and I feel for them. But they -- or the managers of REITs or mutual funds in which they invested -- knew or should have known about prepayment risk. There's no reason to put these investors' interests above those of home-owners."
The politics:
"President Obama could order mass refis, a natural for him given his recent populist bent and the obvious (at least to me) "Wall Street pays back Main Street" trope.Now, to Mitt Romney, the presumptive Republican presidential nominee. Given the uproar over his Bain Capital career, Romney might welcome a "Wall Street helps Main Street" proposal that costs taxpayers nothing. Romney wouldn't have to look far for expertise: Hubbard, the big mass-refi proponent mentioned above, is one of his economic advisers."
Article:
http://finance.fortune.cnn.com/2012/01/18/mortgage-refis-assistance/

I think you listed legitimate concerns about all 3 funds. I own both PRPFX and the other Yacktman fund, YAFFX. I am not concerned at all at this point on YAFFX. I would be more concerned if Yacktman senior left the fund (or retired). But so far I haven't heard that to be the case. PRPFX is 15% of my portfolio. I intend to reduce that percentage some time this year. I, myself, would not gamble on MERDX with the loss of Aster.
If you are looking for consistency and a manager that has capital preservation as his first goal, you may want to add FPACX to your short list. I'm very comfortable with this manager. Another consideration if you are looking for an income oriented fund might be PGDIX. I recently started to invest in this fund. It is listed as a large value world fund by Morningstar. But it really invests in a variety of income producing vehicles. Here is a link to the funds web site description:
http://www.principalfunds.com/investor/promo/gdif/
Good luck with your choice.

Howdy,
Again, a thank you to all who post the links and also 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..... The equity and bond kids continue the battle. While there remains decent YTD returns in many equity sectors, the bond kids are not buying into the whole picture; at least as is reflected in the so-called "safe harbor" issues of the U.S. Treasury, German bunds, British gilts and Japan's bonds. The Spanish bond auctions this past week performed better than I expected. However, both the Spanish and Italian 10 year bonds remain close to a 6% yield. While this yield would not be out of place during a period of growth for these or other country economies; I am not convinced that such a yield/payment burden upon these two countries is sustainable given the current existing debt burdens, delevering at many levels, potential for growth and ongoing austerity programs. If one could find a statistic; I would not be surprised to find for this summer, that the number of increase in size or new vegetable gardens among the citizens of Greece, Italy and Spain, in particular, as well as many other European countries. This would be another indicator of economic quality.
As to sector rotations; at least relative to the U.S. (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.)
--- U.S. equity +1.5 through - 1.2%, avg. = +.6%
--- Int'l equity +3 through 0%, avg. = +1.4%
--- U.S. eq. sectors +4 through -2.6%, avg. = +.5%
--- U.S. IG bonds +.2 through 0%, avg. = +.05%
--- HY bonds +.7 through +.1%, avg. = +.3%
The best groups among the equity sectors were health/medical, utilities and consumer staples. The best average in the IG bonds were TIPS funds. Int'l equity (generally Europe) performed much better than the broad U.S. equities. There is an obvious large spread among some of the areas listed above. Now if we can only discover the forward paths.
Meanwhile, the IMF continues to beg for money to support and/or stablize some European countries. To a point, I don't really care about or give credit to words that continue to flow from the mouths of many of the heads of these various groups. On any given day one may find a reversal of what these folks word to the microphone about the quality of a region or the prospect for global growth. Behind closed doors, I suspect one would find a great deal of concern as to "how do we get out of this mess?" Of course, a possible true scenario may be that "reality bites" and to allow the unwind to take place. Perhaps this is the plan with all of the money being thrown about; as what took many years to acccumlate will also take many years to unwind. Sadly, the uttered and changing words and thoughts from some of these folks in high places is of little value or comfort; and only causes more uncertainty. I find very few upfront leaders anywhere who are associated with politics, governments or the numerous global monetary organizations. Surprise, surprise; eh?
You may consider our portfolio to be quite boring, but you may be assured that it moves and bends about each and every day; from forces beyond our control. We retail investors will find many interesting investment periods to ponder, as usual, in the coming years.
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 + .20 % move this past week. Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = +.16, YTD +8.8%). What is cash? This is a periodic question at MFO. For our house, we consider our IG bond holdings to be our cash in the current market conditions. One will find MM funds as a pure cash acct.; but even if fees are waived at this time, the average return for the past 3 years for a MM fund we could use (FDRXX) is .01%. Our IG bond funds have an average .45% expense ratio. An interesting question arises as to why in the world would one use a TIPS fund at all, let alone as a cash holding; and especially with the most recent TIPS auction closing with another negative yield? Move past the negative yield thought and to the fact that the yield also currently reflects a price/NAV increase. This is where the money is made today. Our two TIPS funds, APOIX and FINPX have YTD's of 1.9% and 2.2%, respectively. We find this return acceptable for parked money; with the added bonus of total flexibility to move the monies on a days notice to something more favorable.
The old Funds Boat is at anchor, riding in the small waves and watching the weather. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
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 we watch for psuedo benchmarking are the following:
***Note: these YTD's per M*
VWINX .... + .64 week, YTD = + 3.92%
PRPFX .... + .44 week, YTD = + 4.82%
SIRRX ..... + .13 week, YTD = + 2.47%
TRRFX .... + .51 week, YTD = + 6.08%
VTENX ... + .47 week, YTD = + 5.39%
HSTRX .... - .16 week, YTD = + .07% (to be removed, fund no longer matches our mix)
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 March 9, 2012---
U.S.Stocks 10.5%
Foreign Stocks 6.8%
Bonds 78.5% ***
Other 4.2%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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
APOIX 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
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

Reminds me of two Zurich Axioms:
Minor Axiom I - Always Play for Meaningful Stakes
If you only invest $100 in a stock, even if it goes up 10x you've only got $1,000. Is that going to change your financial future? Unlikely. Your investments must be big enough to make a difference (obviously though, you must start where you are comfortable and with what resources you have).
Minor Axiom II - Resist the Lure of Diversification
Diversification has three major flaws as pointed out by Gunther:
1) Diversification forces you to violate Minor Axiom I by failing to play for meaningful stakes.
2) With diversification, it's more likely your gains and losses will simply cancel out.
3) By diversifying, you spread yourself too thin and must become an expert on too many arenas.
It's far too difficult to be an expert on bonds, stocks, gold, real estate, and every industry from here to there. Just learn about what areas you want to know and become an expert at that. It's far more difficult to avoid losses when you're spread thin and far more difficult to achieve great gains.
Here is the Full list of Zurich Axioms:
http://www.getrichandgiveback.com/2010/12/zurich-axioms-rules-for-investing.html

Reply to @bee: No desire here to become a cheerleader for Mr. C. However, I agree with your criticism that the interview was narrow in scope, so am linking another interview in which Cuggino addresses the bond position. David wrote a thorough (scathing?) critique of Mr. C & PRPFX in his April 1 commentary which I've also linked.
First, here's PRPFX's breakdown of investments, near as I can determine, at beginning of year.
Gold: 20%
                               
Silver: 5%
                               
Swiss Franc assets: 10%
                             
U.S. & foreign real estate and
natural resource stocks: 15%
                   
Aggressive growth stocks: 15%
                    
U.S. T-bills, bonds & other
USD assets: 35%                            
Interview Feb. 2012 http://seekingalpha.com/article/316970-interview-with-michael-cuggino-preserving-long-term-capital?source=feed
David Snowball Commentary April 2012 http://www.mutualfundobserver.com/2012/04/april-1-2012/

Mr. Cuggino is most assuredly much sharper than any investment knife at this house. I am also in agreement that this house prefers to find growth of global economies going forward.
Mr. Cuggino notes the following in quotes:
"Thirdly, many investors continue to sit on the sidelines with investable cash, which means that additional liquidity will eventually come into the stock market over time as people become more comfortable with our economic performance and/or if economic growth continues at a more rapid pace going forward. That liquidity would likely result in multiple expansion and higher stock prices."
>>>>> I don't know who these investors on the sidelines may be, and will presume he is noting the retail investors; as in we here at MFO. A few trinkets of thoughts. Many retail investors remain via 401k's and related. I also know from my own personal diggings, that while this group of retail investor remains in place; they have also scaled back their %'s of monies to this area. Other stuff like food, fuel and related is drawing more of the take home income. I am also aware of some in this group who have taken loans against their 401k's; and others who are retired; tapping their IRA's and related for needed monies to help support other family members who are having cash flow problems. This does not take into account others who will begin (5 years away) some amount of required withdraws from many sheltered accounts. As to a large money area of the retail investors group being those already retired; I do not have a high expectation that many in this group will be throwing large sums of their retirement acct's. back into the equity arena; aside from the % they may already have invested. Like it or not; the boomer group does have access to or control a vast amount of investment monies.
"Wallace Forbes: So you think this is going to entice some of the people who have liquidity get back into the stock market?
Cuggino: Correct. Right now the stock market’s gains have been based on lower trading volumes and not a lot of excitement among average investors. Investors still feel burned by prior moves in the stock market and prior sell-offs, whether it was 2008 or earlier in the decade – 2000 or 2002 for example. It’s not a sexy asset class right now, if you will, among mainstream investors. When that excitement comes back into the market, you will likely see multiple expansions. In the 1980s and 1990s, stocks traded at multiples in the high teens. Right now they’re trading at multiples in the low-to-mid teens. There’s room for expansion there."
>>>>> As noted, I suspect the prior "excitement periods" may have been enough for many of the older folks. These folks , who understand, that they are not getting much from a CD and related, and not staying up with inflation; may likely prefer this to getting a big whack again. If and when numbers indicate a massive flow from retail investors back into equities, this house will be on guard to unload the same. As to the 80's and 90's. From August 26, 1982 through October 31, 2007 one could dollar cost average into just about any equity area and have a hugh monetary gain smile upon the face. Now and today, keeping most of one's money; let alone making a positive return, is real work, in my opinion. Its not August 26, 1982 through October 31, 2007 any longer and this is part of the shaping of what will become the "
new normal".
"Forbes: So you think that there is a fair possibility that we’re going to get those higher multiples back?
Cuggino: Yes, as more investors get interested in stocks again.
And then, fourthly – and it’s more of a wild card here – depending on the outcome of the elections and the actions or inactions of Congress and the Presidency, equity prices could go up further."
>>>>> I prefer that he is correct and that a long and winding road back to real growth of economies is in place. I will maintain, barring white or black swan events that this house will find what the "new normal" may be at the year 2019. All bets are off, if the Mayan calendar predictions causes no holiday season this year...:):):)
We'll muddle along with our boring portfolio, knowing that we have our legs spread astride the sharply pointed fence top of investing just below our crotch; with each foot placed precariously on pillars made from the word "if" and, of course, not wanting to fall onto the fence.
Perhaps PRPFX should be this house's current challenge for return measurement.
Just my inflation adjusted 2 cents, which today is not worth much, eh?
Take care,
Catch

"While in bonds you’re getting that yield because of high bond prices with little potential of further capital appreciation, with equities you’re being paid a bond-equivalent yield and then some to wait for more robust economic growth, P/E multiple expansion and future capital appreciation. So from an investor’s standpoint, the risk/reward proposition continues to be very favorably biased towards equities."
Interview:
http://www.forbes.com/sites/wallaceforbes/2012/04/17/expect-wynn-fedex-and-apache-to-grow-as-economy-heats-up/

I am interested in comments from ye MFO denizens on some of the concerns about MLPs expressed in this Seeking Alpha item:
http://seekingalpha.com/article/500871-master-limited-partnerships-dark-clouds-ahead
and in particular, the following:
2. As interest rates start to move up, it will negatively affect the MLP. First, investors may choose other income producing assets. We see this phenomenon in other high yield sectors, such as utilities.
Additionally, MLPs constantly need access to capital to continue to grow. As interest rates rise, their costs rise and their margins shrink. If they issue shares to raise capital, well, there is asset dilution. This problem is unlikely to arise until interest rates move up, but it is worth keeping on your "radar".
3. Launching of ETNs vs. ETFs. This is a very big problem as ETNs, by their very nature, do not buy any securities but just track an index. This is very different from an ETF, where new money is put to use through direct purchases in the securities comprising the fund.
Though it is not disclosed anywhere, the ETN issuer typically trades derivatives (calls, puts, etc) which would allow them to completely hedge their upside exposure with zero risk and next to no capital expenditure. Their tracking fee (85 basis points) pays for the hedging costs. The ETN issuer doesn't worry about downside exposure because the bulk of the money is invested somewhere else. If the index goes down, they can actually show a profit.
By completely hedging the position, the ETN issuer can now use the investor capital in any way it pleases. The result is that much of the money invested by the public does not go into the sector which would otherwise have increased the share value of the MLPs.
This creates a problem for the MLP investor, as it draws money away from the sector. Imagine if all the investor monies went into an MLP ETN. No-one would be buying actual shares and the sector would collapse.
Though this is extreme, as more investors move towards ETNs, instead of individual MLPs, the share price of MLPs will not show a level of price appreciation consistent with the money that is, in theory, allocated to them. Several more ETNs are due to launch soon, so the problem will likely be exacerbated.

The use of closed-end Central Fund of Canada, ticker CEF, that owns gold and silver bullion, is a way around this for taxable accounts. Capital gains get treated as capital gains, not income. Using GLD and other ETFs in retirement accounts avoids this issue, too.

Hi Mark,
Some don't pay much attention to taxation ... but, I do. For me to sell equities down fauther would require me to sell positions in my taxable account as I curently hold no just equity funds in my 401k and only a small amount of just equity funds in my IRA. This leaves the bulk of my equities in my taxable account and with the dividend yield that I am catching from them I am choosing to continue to hold them. I just do not need to book a lot of capital gain income uncessairly and also loose my dividend income stream. So if my dividend paying equities pull back in their valuation I will still be catching their dividends. And as Desota pointed out and most don't turn their long standing equity income holdings. At least I don't. However, I will turn special equity positions that I enter.
I gave you an answer ... Sorry it was not the one you were looking for ... But, it was my sincere answer. Look, I enjoy the dividend income from many of these long standing holdings as most of these companies have grown their dividends as they have grown earnings. Why should I sell off a good equity income producing cash cow? Most of them would have to pull back a long way before I would get upside down in them. For example my average cost in DUK Energy is back of $5.00 per share and I am catching a $1.00 dividend per share. What a deal! ... Don't you think?
Take care,
Skeeter

Hi Skeeter,
You noted: " First for Catch 22’s question … Why do not sell equities farther down? Mark I guess I could sell my equities farther down but in doing this I would be generating more taxable income from the resulting capital gains than I need or want. In addition, I would be selling some assets that have appreciated over the years as I have some equity positions that date back to the mid 70’s.
Skeeter, I have got to get into my head the taxable viewpoint that is more often than not part of most posts here. I'll be better in the future regarding the taxable side of money moves.
All of our portfolio is tax sheltered and aside from exchange restrictions (about 20/year); we don't give a thought to tax considerations.
Thank you,
Catch/Mark II

Howdy,
Again, a thank you to all who post the links and also 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.....Bonds, bonds,bonds. As I have noted before, these are, in my opinion, the backbone of money at all scales; from small local gov'ts. and businesses to the large scale operations of central gov'ts. As to this and we individuals; we also issue a form of bond, in reverse. Very few individuals put up the full amount of monies for two major purchases; being a home(s) and several vehicles throughout our lifetime. One may shop around for the best mortgage or vehicle loan, obtain a loan and in effect have a private issue bond produced in your name. Not unlike traditional bonds, your credit worthiness will affect the yield (interest rate you pay). How does this relate to anything investing. It is nothing more than what our house attempts to view and understand all of what surrounds we investors each and every day. We try to place ourselves into the various positions of the financial machinations in the most simple terms we might understand. As this house will never have an inside track to how or why the big money houses or central banks function; nor will we have the intellectual skills to master all of the subtle changes (sometimes in 275 millisecond time frames---trading computers), we do our best to attempt to determine both fundamental and technical aspects of the markets(sectors), in a simple form and make choices from these aspects to position our monies, .
With a part-time staff of 2, on the best of days; our research staff does its best to find the major cause and effect issues in place.
An example is that "x" number of folks are familiar with a nearly perfect formed, very gently sloping range of small mountains, with either downslope side having 20 small water streams, that feed 10 larger streams, then 5 larger streams and then into one large river on either side of the Bondequity mountain range. A weather forecast notes that there will be a rather strong and slow moving storm; producing more than average rainfall, in the area. Each mountainside has its own set of crop growers (investors), being the bond and equity farmers. Some farmers have diversified/mixed their crops. In either case, not enough or too much rain may cause problems for either farm type; whereas it is possible for both crop types to provide ample returns with just the right amount of rainfall.
Knowing or tracking the storm path may be of great benefit to all growers in order to help protect the crops through the system of drainage gates and bypasses that have been used in this area for many years. Heavy rains may still prove to be overwhelming in the low lying areas in the flat lands below; as the amount of rain diverted above will still find its way to this area. As usual, there will be those who are aware of the weather conditions; and will plan accordingly, there will also be those not checking the weather forecast until after the storm has begun and those who seldom monitor the weather forecast. As time and knowledge allows, one should always make some attempt to monitor some aspects of the weather forecast, in order to protect the planted investment crops.
'Course, an ongoing problem area is too much information about the weather forecast, and who or what appears to be credible; and why. And yes, the forecast always has a mix of fundamental and technical aspects, eh?
Watch the forecast, short, medium and long term; or be prepared to find water over the boot tops.
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 + .45 % move this past week. Sidenote: The average return of 200 combined Fidelity retail funds across all sectors (week avg = -.96, YTD +8.1%). Investment grade bonds gave support to the portfolio last week, the HY/HI bond sector was down about .22% and the equity funds were mixed to down. We're watching who and what is "twitchy". The following quote from last week reminds me of the more than two years of some of the "interesting" quotes that have arrived from Europe.... “I don’t see a good reason” for buying government bonds, Knot of the ECB said today at an event in Amsterdam. “I think there has been an overreaction to the unfortunate communication surrounding Spain.” Klaas Knot is a governing member of the ECB. Knot is commenting about the ECB buying more of Spain's bonds to offset the yields that have continued to increase after the LTRO (QE) placements of several months. Spain will have another bond auction this coming week, which will help tell more of this picture. One may conclude that bond yields for Spain and Italy have risen again; because the evil bond traders are playing games, or that folks are a bit on edge about holding the product due to the "unfortunate communications" regarding a vast array of circumstances in Spain in partiuclar that may indicate quality problems. One may suspect that the central bankers sure don't care much for all of the data (of which the public has a right of knowledge) traveling the globe. I will presume that the ECB will have to form a plan to move more Euro's to Spain and others again. My favorite quote person of the past 6 months is Christine LaGarde of the IMF. Perhaps I can find a top ten list.
Lastly, the U.S. is still my top equity pick from the turd pile list.
The old Funds Boat is at anchor, riding in the small waves and watching the weather. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
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 4 funds we watch for psuedo benchmarking are the following:
***Note: these YTD's per M*
VWINX .... - .13 week, YTD = + 3.26%
PRPFX .... - .04 week, YTD = + 4.36%
SIRRX ..... + .26 week, YTD = + 2.34%
HSTRX .... + .57 week, YTD = + .23%
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
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 March 9, 2012---
U.S.Stocks 10.5%
Foreign Stocks 6.8%
Bonds 78.5% ***
Other 4.2%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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 Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX 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
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income