Vanguard Diehards

Is Bogleheads.org the place to be now?

David C. — Sat, 21 Nov 2009 04:09:08 GMT

I remember years ago this forum had lots of activity.

Now not so much so.

Is Bogleheads now a better place to ask investing questions?

Time for active investors to rethink

tar42 — Sat, 21 Nov 2009 02:34:06 GMT

http://www.marketwatch.com/story/pimcos-gross-others-say-to-go-more-defensive-2009-11-19

Vanguard Wellsley

rondom — Sat, 21 Nov 2009 18:26:21 GMT

Wellsley has a bond duration of 5.8. How do you expect Wellsley to perform in an increasing interest rate market? Why don't they hold TIP's?

Add International Small cap to complement International Index fund?

David C. — Sat, 21 Nov 2009 04:00:16 GMT

Vanguard FTSE All-World ex-US Small-Cap Index Fund Investor Shares (VFSVX):

https://personal.vanguard.com/us/funds/snapshot?FundId=1684&FundIntExt=INT

I found out recently that International Index fund is only Large caps.

What do you think about reducing International Index fund by 5% and putting it into International Small cap?

Note: VFSVX has some high fees!

.75% purchase fee, .75% redemption fee, .60% expense ratio

Bogle's "Common Sense on Mutual Fund--updated"--A Gem

Taylor Larimore — Sat, 21 Nov 2009 12:27:39 GMT

Hi Diehards:

Mr. Bogle has updated his "Common Sense on Mutual Funds" published 10 years ago. These are valuable excerpts (gems) from his new book:

"Today, it's hard to imagine the incredible ebullience in the stock market in 1999 when the first edition was published. Dow 36,000 was published a few months after my own book."

"After two crashes--in 2000-2002 and again in 2007-2009--the stock market returned to the level it reached way back in 1996 (excluding dividends)."

"Far too many professional managers of our mutual funds have failed to act as vigilant stewards of the assets that we entrusted to them."

"Stock valuations (now) appear realistic, and, quite likely, attractive for the long term."

"Beware of extrapolating returns in the stock market and of relying on projections of past returns to tell us what the future holds."

"The stock market is not, and never has been, an actuarial table."

"Stocks have always been volatile. There seems little reason to expect that such volatility will soon abate."

"Mutual fund investors continued their consistently counterproductive investment patterns (buying high/selling low) during the 1998-2009 period.--Will investors never learn?"

"Active trading in fund shares is an industry scandal"

"Annual portfolio turnover has risen to the 100 percent range during the past quarter-century."

"Nothing that has happened in the last decade persuades me to change a single one of those six rules of intelligent investing: Invest you must; time is your friend; impulse is your enemy; basic arithmetic works (low costs); stick to simplicity; stay the course."

"The data confirm unmistakably that historic patterns repeat themselves over time; however, knowing in advance when these peaks and valleys will occur is not within our competence."

"The more things change, the more they remain the same."

"The 2-year cumulative return on stocks through September 2009 totaled -25%, while the value of a 60/40 stock/bond portfolio would have declined by just -11%."

"Despite the serious bear markets of 2000-2002 and 2007-2009, the annualized returns on stocks since 1971 remained strong (9.6% per year)."

"It is unusual--but hardly unprecedented--for bond returns to be competitive with stock returns."

"As we age, we usually have (1) more wealth to protect, (2) less time to recoup severe losses, (3) greater need for investment income, and (4) perhaps an increased nerviousness as markets jump around. All four of these factors clearly suggest more bonds as we age."

"Even after having my principles tested in the crucible of a rotten decade for stocks, there's hardly an idea--or even a word--that I would change in my recommendations in establishing an appropriate allocation of assets in investor portfolios."

"The remarkable complexity of the insanely risky financial instruments that brought our financial system and our economy to their knees--only confirms the need for the kind of clarity, transparency, and simplicity that I recommended to investors then, and continue to recommend now."

"Even when the data are examined over shorter periods, and even when the data turn negative, low costs continue to be key to superior returns."

"Don't forget that taxes are costs, too."

"The powerful pattern of reversion to the mean cited 10 years ago continued over the past decade."

"There remains no evidence--none--that superior past performance is predictive of future success."

"As I wrote in 1999, hot performance by tiny funds should be 'a warning flag to intelligent investors.'"

"I'm increasingly convinced that all--or virtually all--portfolios should carry a substantial commitment to broad market index funds."

"My message, with just a few tiny modifications, remains intact--a clear understanding of the value of 'the gift to be simple,' and its commonsense implementation."

"When we incorporate the results of the Vanguard 500 Index Fund since 1998 with its previous record over 15 years, we find that the fund outpaced about 68% of all general equity funds on a pre-tax basis but nearly 90% on an after-tax basis."

"In the past five years, index fund risk as measured by Morningstar was more than 30% below the risks assumed by actively managed funds."

"The events of the past decade have combined to make indexing the standard to which actively managed funds must hold themselves."

"My hope that 'the raw power of indexing' could force major changes in the way fund complexes operate' died aborning."

"In the more volatile recent markets--the risks assumed by large-cap funds remained well below the risks assumed in the other categories."

"As I noted then (a decade ago) 'Once the equity market environment turns more sober, future bond fund returns may well prove to be more competitive with stock fund returns.' Both predictions, as it turned out, were remarkable understatements."

"Managed bond fund carrying sales loads have earned far less than no-load bond funds in each category, and roughly one-half of the returns of a comparable bond index."

"Municipal bond funds are fine choices for investors in high tax brackets, and inflation-protected bond funds are a sound option for investors who expect much higher living costs."

"Weights in the world's stock market: China, 1.7%; India, 0.7%; Brazil, 1.2%; and Russia, 0.6%."

"In 2008 alone, fully 399 funds were either liquidated or merged into another fund (usually in the same fund family, and usually one with a better record)."

"If you like the target-date idea, carefully consider the records of the underlying funds, the asset allocations to equities and bonds, and the all-in costs."

"Investors seem hell-bent on carrying out the search for winning funds of the future, no matter how futile the search has proven to be."

"There can be little doubt that mutual fund champions come down to earth with remarkable consistency."

"The average annual returns of the two categories (growth funds vs. value funds) during the 72-year period (1937-2008) were actually identical--9.7%."

"The past decade has also reflected--in spades!--RTM between U.S. and international stocks. Over the full half century, (1959-2008) the annual returns are virtually identical: U.S. 9.1%; international 9.0%."

"RTM in investing is everywhere--in equity mutual funds, in market sectors, across the globe, in real stock market returns... Ignore these clear lessons of history at your peril."

"Winning strategies becoming the mode of the day, attracting many dollars and then no longer working, is hardly without parallel in the long history of the financial markets."

"In the stock market the more elaborate and abstruse the mathematics the more uncertain and speculative are the conclusions we draw therefrom."

"Whenever calculus is brought in, or higher algebra, you could take it as a warning signal that the operator was trying to substitute theory for experience."

"Institutions control some 75% of the stock of all U.S. corporations."

"Since 1998, equity mutual funds have distributed nearly $1.5 trillion of realized capital gains to their investors."

"Taxable investors owe it to themselves to emphasize passive index funds, or well-managed low-turnover, actively managed mutual funds, or funds with substantial unrealized losses on their books."

"As time marches on, the variability of the average historical rates of return converge dramatically. But please don't make the error of equating that narrower range of returns with lower long-term risk."

"With the passage of time the magic of compounding returns is inevitably overwhelmed by the tyranny of compounding costs. (Do the math!)"

"Casino capitalism has come to sit in the driver's seat, and trusteeship, professional competence and discipline, and focus on the long term were lost in the shuffle."

"Among the 200 largest mutual funds during the decade ended as 2000 began, the 6.5% annual return earned by fund investors was 3.3% behind the 9.8% annual return reported by the funds themselves."

"The absurdity of the 12b-1 fee remains,"

"I continue my campaign to treat the human beings who invest in mutual funds as owners, not as mere customers."

"By my reckoning, nearly all firms in the (investment) field are essentially marketers."

"During the past decade, the fund industry has moved in precisely the opposite direction from the direction I urged."

"Stocks listed on the NY Stock Exchange averaged an annualized turnover rate of 155% during the first half of 2009, ETF turnover averages a truly incredible 3,000%. I'm crestfallen. Trading in funds has now overwhelmed trading in stocks."

"My earlier concerns about derivative instruments have been borne out."

"With the nice market recovery since March 2009, the worst now seems to be over. I hope so, but I would still keep some powder dry--just in case."

"Morningstar data clearly confirm that traders in indexed ETFs have earned returns that fall far below the returns earned by the respective indexes that the ETFs track."

"Total equity fund costs, are estimated at some $43 billion in 2008. That is a lot of money to pay to managements that, as a group, have consistently failed to outpace th stock market as a whole."

"Not a single firm has joined Vanguard in operating with a truly mutual structure."

"A recent study by Cogent Research concluded that 'Vanguard Group generates substantially more loyalty than any other fund company.'"

"The Bogleheads have come to passionately believe in Vanguard's mission of investment simplicity--economy, efficiency, asset allocation, widely diversified portfolios of high quality and low cost, and, above all, a commonsense focus on the wisdom of long-term investing and the folly of short-term speculation."

"Taylor and I struck up a friendship that, a decade later, is stronger than ever."

"Even at age 80, I continue to press on in my crusade to build a better financial world for investors."
-----------------------------------------------------------------------------------

More "Investment Gems":

http://www.bogleheads.org/wiki/Taylor_Larimore%27s_Investment_Gems

Best wishes
Taylor

Duplicate thread-> Ignore

David C. — Sat, 21 Nov 2009 03:59:54 GMT

Retirement Income

philo1a — Thu, 19 Nov 2009 23:06:06 GMT

What is Vanguards best (risk vs reward) single product for a monthly income stream?

Thanks

tips

bennett94301 — Sun, 15 Nov 2009 07:20:00 GMT

I don't follow the tips market closely. Is this as reasonable a time as any to add to my tip holdings?

Thanks

alan

Vanguard Short Term Inv. Gr

kayemsd — Thu, 19 Nov 2009 17:24:39 GMT

I have a large part of my Variable Annuity invested in this fund for past 4 months. Wondering if I should consider moving it when the interest rates start up? I am conservative.

Always appreciate your thoughts! Kaye

Portfolio Mgt.

deerslayer — Thu, 19 Nov 2009 21:15:44 GMT

Hi. I am new at this. However, I appreciate any helpful advise. Circumstances; Retired/Disabled @ 59yrs. old. Currently have 6- Vanguard Funds divided up into 8 Funds for a reason. My 6- figure Portfolio w/the following weightings: 1).VFSVX @ 1.45% 2).VTSMX @ 29.08% 3).VGTSX @ 5.69% 4).VBMFX @ 7.09% 5).VBMFX @ 7.58% 6).VBTLX @ 44.30% 7).VFIIX @ 3.03% 8).VPMM/Cash @1.78%. Redeem appr. $2K/Mo. Thinking about adding a foreign fund (Matthews Asian@$3K & T-Bond from TCW or Metro-West @ $3K). Prefer VBS for these w/NTF. I want to keep costs down and I am not at ease going thru another brokerage. However, VBS limits me to Funds w/NTF. REBALANCE? Preserve, Stimulate & More Growth? How can I do a better job w/o much help from Vanguard's initial Portfolio Set-Up?

Is Portfolio Design Right?

deerslayer — Fri, 20 Nov 2009 16:50:22 GMT

Hi. I am new at this. Here are my circumstances;

1).Retired/Disabled @ 59yrs. old. w/a $2,100/Mo/Redemption from my Porfolio as income.

2).Portfolio is 6- figure dollar amount comprised of Vanguard Funds into 8-funds for specific reasons.

3). A. VFSVX @ 1.44% B.VTSMX @ 29.13% C. VGTSX @ 5.65% (D. VBMFX @ 7.11%-IRA) E. VBMFX @ 7.61% F. VBTLX @ 44.47 G. VFIIX @ 3.04% H. VPMM @ 1.55%.

4). Thinking of a Foreign(Matthews Asia) & (T-Bond from TCW or Metro-West) @ $3K each. Prefer VBS w/NTF. However, this does limit my fund choices w/o sustaining another cost for a broker. I want to keep costs down!

5). Should I Rebalance with the caveat of Preserving & at the same time try to increase the Equity % in my Portfolio to boost returns. Can both issues be accomplished at the same time? I would appreciate any Help/Recommendations from more experienced investors. Thank You!

Is Portfolio Design Right?

deerslayer — Fri, 20 Nov 2009 16:50:45 GMT

Hi. I am new at this. Here are my circumstances;

1).Retired/Disabled @ 59yrs. old. w/a $2,100/Mo/Redemption from my Porfolio as income.

2).Portfolio is 6- figure dollar amount comprised of Vanguard Funds into 8-funds for specific reasons.

3). A. VFSVX @ 1.44% B.VTSMX @ 29.13% C. VGTSX @ 5.65% (D. VBMFX @ 7.11%-IRA) E. VBMFX @ 7.61% F. VBTLX @ 44.47 G. VFIIX @ 3.04% H. VPMM @ 1.55%.

Is Portfolio Design Right?

deerslayer — Fri, 20 Nov 2009 16:49:44 GMT

Hi. I am new at this. Here are my circumstances;

1).Retired/Disabled @ 59yrs. old. w/a $2,100/Mo/Redemption from my Porfolio as income.

2).Portfolio is 6- figure dollar amount comprised of Vanguard Funds into 8-funds for specific reasons.

3). A. VFSVX @ 1.44% B.VTSMX @ 29.13% C. VGTSX @ 5.65% (D. VBMFX @ 7.11%-IRA) E. VBMFX @ 7.61% F. VBTLX @ 44.47 G. VFIIX @ 3.04% H. VPMM @ 1.55%.

Is Portfolio Design Right?

deerslayer — Fri, 20 Nov 2009 16:49:30 GMT

Hi. I am new at this. Here are my circumstances;

1).Retired/Disabled @ 59yrs. old. w/a $2,100/Mo/Redemption from my Porfolio as income.

2).Portfolio is 6- figure dollar amount comprised of Vanguard Funds into 8-funds for specific reasons.

3). A. VFSVX @ 1.44% B.VTSMX @ 29.13% C. VGTSX @ 5.65% (D. VBMFX @ 7.11%-IRA) E. VBMFX @ 7.61% F. VBTLX @ 44.47 G. VFIIX @ 3.04% H. VPMM @ 1.55%.

Is Portfolio Design Right?

deerslayer — Fri, 20 Nov 2009 16:49:30 GMT

Hi. I am new at this. Here are my circumstances;

1).Retired/Disabled @ 59yrs. old. w/a $2,100/Mo/Redemption from my Porfolio as income.

2).Portfolio is 6- figure dollar amount comprised of Vanguard Funds into 8-funds for specific reasons.

3). A. VFSVX @ 1.44% B.VTSMX @ 29.13% C. VGTSX @ 5.65% (D. VBMFX @ 7.11%-IRA) E. VBMFX @ 7.61% F. VBTLX @ 44.47 G. VFIIX @ 3.04% H. VPMM @ 1.55%.

Long term vs. short term bond funds

dan.schwie — Tue, 17 Nov 2009 22:43:43 GMT

Looking for some advice on how to think about bond investing in the current economic climate. I understand that long term bonds are more sensitive to interest rate hikes than short term bonds.

Does this imply that now is a bad time to invest new money in a long term bond fund since interest rates have nowhere to go but up? Would a short term fund be a better option at this point in time?

Does it even matter if I am investing for the long term? I am a buy and hold investor who DCAs twice a month. My investment horizon is 20 - 25 years. Any advice is appreciated.

Does this adequately express risk?

lucky7 — Tue, 17 Nov 2009 22:41:16 GMT

A Bear Market can strike at any time and when it does equity values can drop up to 75% with no guarantee of recovery in any practical time period.

This came about when trying to explain my thoughts to my young adult kids, and a friend. In part I think this contradicts the premise of safety over time for equities, for in absolute terms the losses can be so much more severe over the long term when lightening may strike. Moreover, just saying increase bond percentages to match age also not for me as clear a reflection of equity monies at risk. Standard deviation to reflect risk just plain wrong. Maybe it is just to hammer into my own dense head, but have come to like this notion. Of course no guarantee at 75% but seems reasonable. Anyhow, any opinions.

Bob

Domestic vs. International allocation

onepocket — Fri, 20 Nov 2009 13:43:30 GMT

I have been thinking for some time about my portfolio's international exposure. It is of some concern to me that most of my assets are domestic. This includes income as well. I wonder what are reasonable limits to maximize benefit and minimize risk. To start the dialogue, here is a snipit from Vanguard's portfolio analysis portion of their website (for account holders):

Your domestic versus international analysis deals with how the stock portion of your portfolio is invested in U.S. and foreign markets. We believe that international stocks are a valuable diversification tool. A stock portfolio can gain important diversification by investing up to 20% in international stocks. Moving beyond 20% improves a portfolio's diversification but at a significantly lower rate. Because of the risks inherent in international investing, an upper limit of 40% is prudent.

So, is 20 to 40% a reasonable range? If so, what are arguments for 20 and 40 respectively? Also, note that the comment above only pertains to the equity portion of a portfolio. Any thoughts about international bond exposure?

General Mutual Fund Recommendations Needed

comptontim — Thu, 19 Nov 2009 03:04:45 GMT

Can someone point me to a post that gives a list of mutual funds and % in each for a balanced portfolio?

Background: I know what allocation I want for stocks, bonds, domestic and international. I am sold on mostly index investing & could use a list of good mutual funds:

domestic stock mutual funds & % in each

international & % in each

bond funds & % in each
other like real estate or ?
Ideally showing funds good in tax defered or taxable accounts.
Minimums are not an issue

The Investor's Manifesto by William Bernstein - new thread

seh1981 — Wed, 18 Nov 2009 15:24:00 GMT

I was reading through the quotes supplied by Taylor in the other Investor's Manifesto thread and one struck me kind of funny...

"The 44/56 US/Foreign split (Vanguard World Index) is too foreign-heavy for my tastes."

Let me preface my comments by saying that I am not familiar with Mr. Bernstein and what his beliefs are. From reading the quotes, though, I get the impression that he does believe in indexing rather than active management.

So here are my thoughts/questions...isnt the basic idea of indexing that you let the index take you wherever it goes and you dont question it? Of course, you could question the premise of the index but lets talk about that. Isnt the basic idea of the World Index the same as the S&P 500 index? Markets are efficient, if this is the value given to the company by investors, it must be correct. If US companies are more valuable than foreign companies, investors will put more $ into the US companies and the split between US/Foreign will reflect that belief? Are his views consistent?

Don't make a mistake with Vanguard!!

billjam — Mon, 02 Nov 2009 13:13:53 GMT

I went a little brain dead Saturday when entering an exchange from one fund to another. Entered 850 shares instead of 350 shares. Being a Fidelity customer as well as Vanguard I wasn't too concerned even after I found there was no way to edit or cancel the order online. Surely they can handle this over the phone, I thought. After all the transaction doesn't execute until the close of business on Monday. WRONG!!! Called Voyager service this morning. No, we can't edit a pending transacton entered online. No, we can't cancel a pending transaction entered online. Their only suggestion is to let the transaction complete tonight and then submit a written request to reverse 500 shares.

Once again I find myself wondering if this company really operates in the 21st century. How can they be so far behind the rest of the industry technologically?

Rate D.Wiener's Newsletter

Limoman — Thu, 19 Nov 2009 12:21:04 GMT

Objective: To add to the Collection of recommendations to Index and using Vangaurd

Your Opinion on using this Newsletter?

For both the Novice and Experience VG Investor.

VanGuard Adviser Newsletter by D. Weiner-$99YR

Sign up risk-free and see Dan Wiener's 94% Advantage for yourself!

Other Links /suggestions on my ck list sheet are :

Vanguard - Vanguard Mutual Funds

Vanguard Diehards Discussion Board

Bogleheads Investing Advice and Info

Bogleheads - Help with Personal Investments

Vanguard - How to create your investment plan

Vanguard Target Retirement Funds - Bogleheads

Vanguard Annuities

J. ZWEIG The Inellegent Investor Letter site

FundAdvice.com - Suggested Portfolios

FundAdvice.com - The perfect portfolio

and anyothers you wish to suggest to add..

Thank you

Dennis

Vanguard "Rock" in portfolio

NEWTEACHER — Mon, 16 Nov 2009 16:00:17 GMT

Hey all,

I have recentley become upset with my advisor who refuses to return my calls or answer my questions. Therefore I am going to pull my $15,000 from my Fidelity 403B and transfer it into a Vanguard account. My questions are as follows:

1. This $15,000 is the majority of my retirement savings and I want to know what is the best Vanguard fund that I could put this money into. I am 29 years old and plan to retire when I am 52.

2. Are VWELX and VWINX to conservative of a fund for someone who is 29 and is a risktaker?

I currently have Roth with $5,000 in OAKBX and $5,000 in FAIRX.

What Vanguard fund should I be looking at? This fund will get around $2600 a year until I retire and am curious what suggestions you would have.

getting past that premium page to get to your portfolio

normsie — Mon, 09 Nov 2009 02:02:09 GMT

i would be grateful if someone could advise me on how to get past that premium page to get to my portfolio.i have tried and tried but to no avail.

thank you,

Target Date Funds

ljthiemann — Wed, 18 Nov 2009 00:16:30 GMT

What dose the target date indicate? I'm 70 yrs old and considering a target date fund. What would be recommended.