I just got my 289 67 back on the road. Its running better than ever but still seems to run hot. I put a mechanical temp gauge in it today and in stop and go traffic got up to 225 degrees. Out on the open road it ran around 185. It has a new 195 thermostat, new aluminum champion radiator, new water pump, flexlite fan and no fan shroud. Previously I did buy a fan shroud with no difference. From the markings on the pistons the engine was bored .040 about 4 years ago. Do I need to try an electric fan? If so any suggestions. I want to drive it alot this summer and most all driving is in town. Thanks for any suggestions! 
Here is my cooling system. I spent quite a bit but worth every penny. I spent a long time fighting with it because I was on a budget and was also working on other stuff with the car. Up until yesterday the radiator would always over flow in hot weather still. Even with the radiator, fans and shroud. I finally changed my radiator cap (again after doing it twice experimenting with different psi caps) I have a 16 psi cap from summit racing that finally fixed that issue. Drove it hard all day in 100 degree weather yesterday and not a drop of radiator over flow and the temp guage didnt raise a hair over half hot ( I have the origional sytle guage). So make sure your cap is doing its job right. I had to replace a brand new cap that was just faulty and it threw me off for the longest time.
Good luck.
http://www.mustangsplus.com/xcart/1967-70-Dual-11-Fan-and-Shroud-Combo-24-x-14-7-8.html
http://www.mustangsplus.com/xcart/1967-1970-24-Clamp-In-Style-2-Row-1-Core-Staggard-Outlet-Radiator.html
http://www.summitracing.com/parts/PRF-30103/
Also if you go this route, Mount the breaker from the relay kit in a cooler location. Heat will cause the breaker to pop shutting off your fans heating up your motor even worse. Just had to deal with that yesterday also. haha.
Here’s that cap. Just so you have an Idea of what works with my 289. Because I know cooling can be a BI*CH. I am also using a stock thermostat from autozone. I still want to upgrade to a high flow one. And I also have a high flow water pump ready to go in. Don’t know if I need it now but might still install it and see how it goes since where I’m from it’s not rare for our summers to get up to 105 degrees.
http://www.summitracing.com/parts/SUM-380160/
You bought an aftermarket gauge marked for temp. You haven’t verified that what it reads is what your coolant temp really is. So you don’t know what it’s telling you.
How do you take the coolant temp? With an infrared thermometer or any number of temp sensing devices.
Until you verify what temp it’s actually sensing when it shows these numbers, you won’t know what it’s telling you.
When a car runs cool on the road at speed and hot in stop and go traffic it means that you are not getting enough air through the radiator. Get an adequate fan, meaning trash the flex fan, and then add a shroud. You will be good to go. I can run through the physics, but basically think about what changed between running cool and getting hot… AIR flow. When you are running 60 you are putting over 5000 cfm of air through the entire area of the radiator, (about 3 square feet x 5280 feet per minute = 15, 840 CFM) The stock 7 blade fans with a shroud are pretty effective.
IMO 225F is not overheating. A stock or near stock engine that is well broken in can run up to 240F safely. Most late model stuff does not even turn the cooling fan on until 235F. As others have said I question the accuracy of your gauge. If the 195F stat is good you should be running 190 to 200F going down the road in cooler weather. If the gauge is accurate the tstat is opening lower than spec. From experience new tstats open about 5 degrees F higher than the rated temp and as they age the opening temp slowly drops as the spring weakens. BTW what was the ambient temp when you were doing the testing? Also I can’t see how a fan shroud made no difference unless it did not fit correctly, too large an opening compared to fan diameter, fan depth in the shroud incorrect etc.
Bill
Thanks for the feedback. I live in ohio it was about 75 out. I have an aluminum champion radiator, does any one know where to get an appropriate shroud? The stock one doesn’t seem to fit properly. My car has never physically overheated on me, so is there major harm driving it? I appreciate the help guys!
Try any of the eBay sellers that vend the Champion radiators to see if they have a shroud that will work with your radiator/fan.
It’s likely you’ll have to do some modifications to one, or even fabricate your own. As wonderwrench said, the fan has to be at the proper depth in the shroud, diameter around the fan has to be right, etc.
Factory parts make this easy, but with an aftermarket aluminum radiator things begin to get sticky.
You need to put a coolant overflow tank on the car, if you haven’t, so you can see what volume of coolant, if any, is leaving the system when you park or get into traffic.
Those can be cheap or expensive, depending on what you want.
Overheating is mostly dangerous to the piston rings, since heat will cause them to lose some of their springiness. They get weak and lose their ability to seal the piston to the wall, causing loss of compression and burning of oil. It can also cause head gasket problems and other issues. So, yeah, it’s not okay if it is overheating.
Measure the temp of the coolant and figure out what heat values you’re working with and go from there.