Yearly Archives: 2012

investing

Lessons from the Attic

On a recent trip to my parents’ house, I sifted through crates of childhood junk that my mother had cleared from the attic. One item in particular caught my eye—an “official program” from a New York Mets game in 1980.…

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7 Comments
personal finance

What type of investor are you?

We’ve all come across the magazine and web quizzes. Answer five questions and you can find out what kind of exerciser, dieter, or driver you are.

I thought I’d have a little fun and apply this exercise to investors. I’ll …

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18 Comments
college

Practicing what we preach

Anybody can give good advice. But taking the advice we give to others? That’s sometimes easier said than done.

For example, I could probably write the definitive guide to diet and exercise. It would be informative and inspiring, full of …

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5 Comments
economy

Look beyond the fiscal cliff

The nation’s near-term focus is on the “fiscal cliff,” the slate of expiring tax cuts and automatic spending reductions that will be triggered at the end of 2012 if leaders in Washington fail to reach a budget agreement. The debate …

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105 Comments
investing

Earning income in a low-yield environment

I participated in a live webcast recently on the topic of earning income in a low-yield environment. Here’s a recap of a few of the themes from that session.

One of the persistent questions from the seminar was how long …

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95 Comments
personal finance

Give me the simple life

A colleague sent me a link to “The Juggle,” a Wall Street Journal blog that explores “the choices and trade-offs people make as they juggle work and family.”

The topic was financial planning for “people too busy to plan,” and …

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15 Comments
investing

Oh how you’ve grown, little website

I would call myself a “pack rat,” except the comparison might offend pack rats. For the most part, it’s not a good thing to have such a messy office. But on occasion I unearth something interesting. Like this screenshot of …

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23 Comments
economy

Put your tie-dye away: It’s not the ’70s

Any long-term investor knows that inflation is the enemy. A spike in inflation can drastically reduce your real investment returns, particularly for fixed income securities. At present, yields on many Treasury Inflation-Protected Securities (TIPS) are negative, a clear reflection of …

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9 Comments
investing

A record no one wants to see broken

Records are made to be broken, or so goes an old saying.

One record that I hope stands forever was set 25 years ago. The U.S. stock market dropped almost 23% in a single day—October 19, 1987.

The Dow Jones …

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12 Comments
investing

What’s your “blueprint” for investing?

I remember one of my colleagues observed that many investors don’t really have portfolios—they have “collections” of securities. He meant that their accounts had been assembled piecemeal over time, with a brother-in-law’s recommendation here and a newsletter recommendation there. In …

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7 Comments
retirement

Health and wealth in retirement

If I were asked what an investor should do to maximize retirement wealth, I’d tick off my standard list, my rules of thumb. Start saving early—and regularly. Keep debt under control. Maximize the use of tax-deferred retirement accounts, like 401(k)s. …

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16 Comments
retirement

Maximizing retirement account balances

I was just reading a blog that reported the typical pre-retiree had $42,000 in a 401(k) account as of 2010. Yet, I happen to know the actual figure is more like $100,000. These two numbers reveal how much confusion can …

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48 Comments
investing

You’re right: For young savers, debt does matter

In several of my previous posts, I’ve touched on the importance of starting to save early. It’s a pretty easy case to make—having the benefit of a long time horizon can make a substantial difference in what you can amass …

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20 Comments
college

Off to college: Have you had “the talk”?

Back-to-school commercials have quickly replaced those featuring summer getaways. For those about to head off to college for the first time, returning to school is taking on an entirely new dimension.…

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4 Comments
retirement

Too gloomy a view

Retirement systems are dynamic and can be expected to change over time. But one hindrance to thinking about change is the common practice of promoting excessively gloomy views of retirement outcomes in the United States. For example, a recent New

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25 Comments
investing

When to look beyond your “back yard”

I try to shop locally because I think it’s important to support neighborhood businesses. I also cheer for local teams such as the Eagles and Phillies, as long as they aren’t impacting my childhood loyalties to the Boston Red Sox …

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12 Comments
investing

What target-date funds can’t do

Well, perusing recent press, it’s clear that target-date funds continue to be one of the financial media’s favorite targets for generalized scorn. Still, I suppose to some extent, you know you’ve arrived when even Jim Cramer is beating up on …

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21 Comments
economy

The outlook for bonds: Are the good times about to end?

U.S. interest rates today are clearly low and below historical long-term averages. Recalling the double-digit rates of the 1970s and early 1980s, I still find it somewhat astonishing that the yields on a broadly diversified basket of high-quality bonds (whether …

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252 Comments
investing

Performance chasing: Washing machines, cars, and mutual funds

Performance drives many of the decisions we make as consumers. What kind of gas mileage will I get? How big a load of clothes can the washing machine handle? How long will this roof last? For many of these kinds …

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9 Comments
personal finance

Building new habits on top of old ones

I’m not one to pore over the newest self-help book. After reading All I Really Need To Know I Learned In Kindergarten, I figured everything that could and should be said had been. But I do fervently believe that …

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6 Comments
personal finance

Rent or buy? Things to consider

Over the weekend, my husband and I signed a contract to buy a new house. After months of indecision—and driving our realtor crazy—we finally committed. (Now, if we could just decide on the color of the knobs for the bathroom …

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10 Comments
retirement

Wealth implosion 2007-2010

The headline is dramatic. For the typical American household, net worth is down 39% from 2007 to 2010. That puts net worth for the typical household back where it was in the early 1990s. This data is from the Federal …

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12 Comments
personal finance

Is your mobile device a criminal’s best friend?

Many of us, if not most of us, are managing our social connections—and increasingly our financial lives—on mobile devices. No longer tethered to the desktop or that pesky laptop, we pay bills, make deposits, and access accounts and balances from …

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38 Comments
personal finance

Our financial literacy partnership

I recently wrote about the connection among Mother’s Day, Teacher Appreciation Week, and how my mother “taught” me to become financially literate. In this post I’d like to acknowledge teachers—and the role they can play in teaching financial literacy—more directly.…

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4 Comments
investing

Deciding what’s important amid competing priorities

About a year ago, I wrote my first Vanguard Blog post to commemorate 529 College Savings Day. In that post I encouraged investors to start saving for college as early as possible. I also asked them to pay attention to …

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18 Comments
economy

Global contagion: Europe’s next export?

In the summer at the beach as a boy, I used to dig in the sand and dream of finding pirate treasure. Old silver and gold coins from Spain and other parts of Europe that may have once washed upon …

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11 Comments
retirement

401(k)s in the crossfire

401(k)s remain a focal point of criticism when thinking about retirement security in America. One example is a recent op-ed column in The New York Times.

Perhaps the most commonly cited concern about 401(k)s is the size of current …

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24 Comments
personal finance

My first personal finance teacher

The timing of Teacher Appreciation Week (May 7–11) and Mother’s Day (May 13) got me to thinking about what my mom taught me about finance. While mothers may not be teachers in the official sense, they play an important role …

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13 Comments
investing

Fees: out of sight, out of mind

One of the vexing questions in the investment world is why many investors are inattentive to fees. While Vanguard has helped create a class of investors that’s fee-conscious and fee-aware, the fact remains that many individual investors remain in high-cost …

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15 Comments
economy

Why investors should ignore the Fed

On December 16, 2008, the Federal Reserve cut its target for the shortest-term interest rate to nearly 0%. The Fed’s bold policy action was one of many aggressive steps taken to stabilize global financial markets and a U.S. economy that …

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45 Comments
retirement

Negotiating your retirement date

The headline “He Wants to Retire … but She Doesn’t” was one of the most popular articles in the April 9 Wall Street Journal.

What struck me most was the author’s comment that many of the people she interviewed …

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18 Comments
retirement

Investment costs hit retirees with double whammy

A while back, I wrote about how people often miss the impact of investment costs on wealth accumulation. Today, I want to make sure readers know that it’s as critical for retirees (people spending money) to think about how costs …

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14 Comments
retirement

A crisis of confidence?

The latest figures are out from the Employee Benefit Research Institute (EBRI) in Washington, D.C. Unsurprisingly, “retirement confidence” remains down from its peak in 2007, and is at levels similar to what we saw during the Great Recession.

What’s going …

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13 Comments
investing

TVs and mutual funds: Do you get what you pay for?

Two years ago, my husband and I bought a TV. He wanted the super-duper one. I wanted a good deal. We went with the good deal.

Fast-forward two years, and the TV we got only turns on and off when …

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3 Comments
economy

Why I still own Treasuries

Bond funds have generally been on a total return “tear” the past several years, given the sharp decline in U.S. Treasury yields.

Bond fund cash flows have been solid, especially into corporate and municipal bond funds, which tend to carry …

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57 Comments
investing

Everyone loves a bargain

We humans are funny animals.

At times, I’ll scour the internet trying to find the cheapest airline flight, perhaps saving $100 or $200, and feeling quite pleased with myself for doing so.

On some other purchases, I confess, I do …

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4 Comments
investing

A sign of slumbering—or of hope?

A Wall Street Journal report, published on February 21, notes that small-capitalization stock prices, as measured by the Russell 2000 Index, are nearing an all-time high. But investors aren’t pouring money into small-cap stocks.

The story, “Small-cap rise is big …

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9 Comments
retirement

Retirement ready—or not?

A new report just came out on the retirement prospects for baby boomers.* Its top-line result was that 40% of all boomers aren’t prepared for retirement.

Whenever the topic turns to retirement in America, the language is fairly dismal. Last …

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22 Comments
investing

Avoiding risk? You might not be

I don’t consider myself a risk-taker. I change the batteries in my smoke detectors, double check that my doors are locked, and always wear my seat belt. I can absolutely relate to the fear that many young people have when …

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19 Comments
economy

$10 salads, $4 gas, and low inflation

Note: For an expanded look at Vanguard’s outlook for inflation—and an explanation of the data behind our analysis—read our interview with Joe Davis on vanguard.com.

As Vanguard’s chief economist, I’m often asked about inflation. And it’s an important topic. …

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94 Comments
investing

A gem of wisdom

In the investment world, you occasionally come across a simple yet striking observation. Here’s an example from a recent client letter of Howard Marks, chairman of Oaktree Capital Management, L.P., and one of Vanguard’s external investment advisors:…

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8 Comments
investing

CEO gets social with fans

As you probably know, Bill McNabb, our chairman and chief executive officer, spent part of Monday, January 23, interacting with Vanguard clients via social media—”taking over” our Twitter and Facebook channels.

“It’s not every day that a CEO reaches out …

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4 Comments
investing

Starting 2012 on the right foot

It’s a new year, so here are a few investment and retirement thoughts that come to mind for 2012.

When it comes to investing, Theme #1 among investors, especially among the majority of the retired or conservative crowd, continues to …

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10 Comments
investing

Gen Y: plenty of time to invest, but little appetite for risk

Along with about 50 million others, I’m a product of Generation X. I had a Dorothy Hamill haircut, spent my weekends at the roller-skating rink, and grew up watching Madonna on MTV (back when she was more controversial and they …

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51 Comments

Visit vanguard.com or contact your broker to obtain a Vanguard ETF or fund prospectus which contains investment objectives, risks, charges, expenses, and other information; read and consider carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

Investments in bond funds are subject to interest rate, credit, and inflation risk.

Diversification does not ensure a profit or protect against a loss in a declining market.

Foreign investing involves additional risks including currency fluctuations and political uncertainty.

Stocks of companies in emerging markets are generally more risky than stocks of companies in developed countries.

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.

All investing is subject to risk, including possible loss of principal.

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