14 February 2016
  • Featured Posts
    Investor Success: Measured in Dollars Not (Per)cents
    Don Bennyhoff
    Senior Investment Analyst for Vanguard Investment Strategy Group

    The concept of “investing success,” as it often appears in the media, is a tangled web to me. Every time I read something about the topic,I can’t help feeling that the authors are confusing two very different efforts:investment success and investor success.

  • Featured Posts
    Investments
    “Take It Easy”
    Fran Kinniry
    Principal of the Vanguard Investment Strategy Group
    While the title may raise a few eyebrows given the equity market’s rocky start to 2016, its inspiration is Glenn Frey, the legendary singer-songwriter for the Eagles, who passed away on January 18, 2016. “Take itEasy,” cowritten by Frey, was the Eagles’ first single and one of their biggesthits. As an Eagles fan, I headlined this post with the song’s title both to pay tribute to the great Glenn Frey and to capture my thoughts about recent market turbulence and the danger of extrapolating too much information from a month of performance.
    Investments
    ETF Clarity Amid The Clutter For $100, Please
    Jim Rowley
    Senior Investment Analyst of Vanguard Investment Strategy Group
    My fifteen-year-old son has become obsessed with the show Jeopardy! Every night as my family prepares to eat dinner, I can hear it on the TV in the background. The answer-and-question format has made me think about alternative ways to talk about ETFs. So much of what is said about ETFs still seems to be a clutter of misunderstanding, and I wish more clarity were brought to the conversation. If ETFs were one of the game’s categories, I imagine contestants (investors) could address the issues in the answer-and-question format, and it might even sound something like this (with my added commentary,if I were the show’s host).
    Investments
    Furnishing Your Portfolio with ETFs and Mutual Funds
    Jim Rowley
    Senior Investment Analyst of Vanguard Investment Strategy Group
    My colleague recently explained how he moved from a furnished apartment to an unfurnished one, requiring him to get some furniture.He thought about renting because there was a chance he might move back into a furnished apartment sometime in the future. He decided to buy instead. How long he planned to stay in this apartment was a deciding factor. He calculated that the monthly costs of renting the furniture would exceed the upfront costs of buying the furniture at some point in the future.
    Investments
    Control the Controllables: Investing Resolutions for 2016
    Bill McNabb
    Chairman and Chief Executive Officer of Vanguard
    It’s the time of year when many of us make an effort to do better—eat healthier, exercise more, try something new. As the holiday bills come rolling in, financial goals may be on your mind as well. In a recent message to clients, I touched on a few investing resolutions to keep in mind this year.None of these resolutions will come as a surprise to our clients, but my hope is more investors will take these themes to heart in 2016 and stay focused on the aspects of investing they can control.
    Investments
    Don’t Let Rising Rates Get You Down!
    Brian Scott
    Senior Investment Analyst of Vanguard Investment Strategy Group
    Recently, there’s been a lot of talk about rising interest rates and what that means for bond investors.One “solution” (suggested mostly by active fund managers) is to use active management for the bond portion of your portfolio. The argument goes that active funds are better in a rising-rate environment because they can shorten their duration, reducing losses from rising rates. What they don’t point out is, for this strategy to work, the manager has to get four things right: when rates go up, how much rates go up, the shape of the yield curve, and when rates stop going up. A miss on any of the four can turn a possibly successful strategy into a losing one. That’s a lot of things to get right or, looked at another way, a lot of things that can go wrong.
    Investments
    Cost is the New Performance
    John Woerth
    Vanguard's Spokesperson
    When I joined Vanguard 29 years ago, the mutual fund industry was all about performance. The financial news media regularly lionized star fund managers such as Peter Lynch, John Neff, John Templeton, and Mario Gabelli, while fund companies touted past performance figures and Morningstar star ratings. Investors became conditioned to make fund purchase decisions based on performance.
    401k
    An Important Financial Decision—Take the Leap or Wade in Slowly?
    Anish Patel
    Senior Advisor of Vanguard's Personal Advisor Services
    Many of my clients ask me the age-old question of whether they should invest cash all at once or dollar-cost average over time. This decision can have a significant impact, so I’ll lay out some key considerations I review with my clients.
    Investments
    5 Things Young Investors Should Do To Save For Retirement
    Colleen Jaconetti
    Senior Investment Analyst of Vanguard's Investment Strategy Group
    Reflecting on National Save for Retirement Week, my co-workers and I have been thinking a lot about those close to or in retirement. However, we shouldn’t ignore the fact that our advice might actually be more helpful to folks at the beginning of the journey than those approaching their retirement destination. There are more of these folks than you may imagine; millennials have surpassed the population of baby boomers,according to the U.S. Census Bureau. Yet too often this is a generation forgotten. So, I asked one of my colleagues, Zoe Odenwalder, a 20-something millennial herself, to provide a few suggestions to make the trip to retirement a more relaxing one. Read Zoe’s unique insight below.
    401k
    6 Financial To-Do’s To Check Off Before Year-End
    Anish Patel
    Senior Advisor of Vanguard's Personal Advisor Services
    As the holidays approach, I begin to evaluate my clients’ portfolios and look for year-end opportunities. Here’s a list of 6 financial to-do’s to check off before year-end to ensure that you’re not leaving anything on the table.
    IRS
    Give Smart With Your Heart
    Jim Rowley
    Senior Investment Analyst of Vanguard Investment Strategy Group
    Somewhere nestled amid the shuffle of Thanksgiving and New Year’s Eve is a day that reminds us to consider giving back during the holiday season—Giving Tuesday, the Tuesday after Black Friday and Cyber Monday. So in the spirit of Giving Tuesday and of course my passion for helping others to make smart financial decisions, I’d like to share a recent personal experience that illustrates how you can give smart with your heart.
    Investments
    The Vanguard Vineyards
    Andy Clarke
    Corporate Communications at Vanguard
    A few years ago, while buying wine for a friend’s party, I found a reasonably priced cabernet sauvignon produced by Bogle Vineyards. I work at Vanguard. How could I resist? A clerk assessed my selection and, I kid you not, pronounced it a “good value.”
    Investments
    Back to the Mutual Fund Future
    John Woerth
    Vanguard's Spokesperson
    It’s October 1985, and Marty McFly, hero of “Back to the Future Part II,” catches a ride in a decade-hopping DeLorean time machine and goes three decades into the future. Leaving his hometown, Hill Valley of 1985,with Doc and girlfriend Jennifer, he arrives at a considerably different Hill Valley of 2015. If the movie were reality, the teenage Marty might be a bit disappointed in the here and now—no power-lacing sneakers, no flying hover boards, no “Jaws 19,” and no self-drying clothes.
    Investments
    Making Lemonade: Tax-Loss Harvesting
    Don Bennyhoff
    Senior Investment Analyst for Vanguard Investment Strategy Group
    When life gives you lemons, you make lemonade. My grandmother repeated that to me innumerable times, and I think it might be a very relevant thought as unsettled financial markets and the year-end seem set to collide. Many financial advisors review their clients’ portfolios at year-end with an eye on reducing clients’ tax bills through loss harvesting. The fact that there are losses is typically a somewhat bitter realization, but this situation may have a sweet side too. Let me explain.
    Investments
    Inertia, Procrastination, and Volatile Markets
    Steve Utkus
    Principal and Director of Vanguard's Center For Retirement Research
    We all know that inertia and procrastination are important behavioral biases and that they can undermine good long-term decisions. It’s easy to put off rewriting your will, exercising, dieting or, in the financial world, to put off saving more or rebalancing your portfolio. I should know—a lawyer suggested I update my will and related documents a year ago. Just last week, I replied to his email. 
    Investments
    It’s a Muni Index Fund—So What’s the Big Deal?
    Ben Rost
    Senior Manager of Vanguard’s Portfolio Review Department
    A colleague recently asked me, “What’s the big deal about our new muni bond index fund/ETF?” It’s a fair question (it is an index fund, after all), and the answer has a lot to do with the $3.7 trillion municipal bond market and its accessibility to investors. But before I get to that point, let’s review why we launched this fund/ETF.
    Investments
    Honoring Yogi
    Fran Kinniry
    Principal of the Vanguard Investment Strategy Group
    Lawrence Peter Berra, known to baseball fans and other admirers around the world simply as Yogi, passed away on September 22, 2015. He was 90 years young.
    Investments
    Building Your Investment Portfolio
    Mary Ryan
    Senior Advisor of Vanguard's Personal Advisor Services
    In my first blog I mentioned that I’d explain more about the portfolio-building process. Thinking of building made me realize just how much constructing an investment portfolio and, well … constructing, a building have in common.
    Investments
    It’s Takeoff, Not Liftoff
    Joe Davis
    Vanguard's Chief Economist
    Debate about the timing of “liftoff”—a hike of 25 basis points in the federal funds rate—has intensified significantly over the past few weeks, ahead of the Federal Reserve statement on September 17. Market participants are debating whether the initial increase will occur in September, later this year, or at all. Some even go so far as to worry about a grave policy mistake should the Fed raise rates in September. Rarely in my career have I seen so much debate and contention over an upcoming Fed meeting.
    Investments
    Millennials Scared of the Stock Market?
    Maria Bruno
    Senior Investment Analyst of Vanguard's Investment Strategy Group
    A recurring theme jumping out at me from news headlines is that millennials are shying away from the stock market, setting them up for long-term failure as they invest for retirement. For example, just recently, I read about a survey that reported less than 20% of millennials found the stock market to be the best way to save for the future. Frankly, I don’t get it. The numbers don’t support the sentiment!
    Investments
    Perspective and Patience
    Tim Buckley
    Vanguard's Chief Investment Officer
    I read a quip in the local paper over the weekend: The stock market takes the stairs up but the elevator down. As I felt the elevator begin its descent this week, my stomach lurched a bit, but I kept coming back to the fact that good investing requires discipline and a bit of courage. You need discipline to stick with a well-established long-term investment plan and courage to endure short-term volatility.
    Investments
    Is There a Monkey Running My Index Fund?
    Chris Philips
    Senior Investment Analyst of Vanguard's Investment Strategy Group
    Recently, a few colleagues and I were reminiscing about an ad that Gus Sauter, Vanguard’s retired CIO, had hanging in his office for years. It depicted a monkey at a computer managing a portfolio. The ad’s message? Indexing is so simple a monkey could do it—the implication, of course,that sophisticated investors require sophisticated strategies. Indexing? A solid strategy, some might have said, but one that’s not sophisticated enough for me.
    Investments
    What’s Good for Vacationers Isn’t Always Good for Investors
    Kevin Jestice
    Planning a European vacation this year? You may be excited about the strong dollar, which will increase your purchasing power overseas. But an appreciating dollar isn’t as good for U.S. investors because it lowers the returns of their international portfolios.
    Economy
    A Rising Tide of QE in Japan Isn’t Lifting All Boats
    Qian Wang
    Senior Economist of Vanguard in Asia
    The Bank of Japan’s latest quantitative easing program hasn’t been very successful (so far, anyway) in pushing consumer prices higher.
    Investments
    Newton’s ‘Law of Indexing’
    Jim Rowley
    Senior Investment Analyst of Vanguard Investment Strategy Group
    Isaac Newton’s third law of motion states that for every action there is an equal and opposite reaction. Never in my professional career had I imagined that a physics-related concept would motivate me to undertake a research project aimed at explaining the performance of index funds!
    Business
    When the Advice Industry Changed at Warp Speed
    Tom Rampulla
    Managing Director of the Vanguard Financial Advisor Services™ Division
    In May, I returned to the States from the United Kingdom to lead Vanguard’s burgeoning financial advisor business. As part of the initial team that helped build our partnership with advisors about 12 years ago, I’m thrilled to be back and eager to work with you as you navigate a changing landscape.