The Vanguard Wellington Fund (VWELX) is the original balanced mutual fund. It was the first mutual fund to include bonds in its portfolio and the 7th open-end mutual fund ever launched in the United States. It also happens to be one of the most successful mutual funds of all-time. From its inception in 1929, the Vanguard Wellington Fund has turned a $10,000 investment into over $11,000,000 (through year-end 2018). Wellington’s approach of investing in stocks, as well as bonds, is the driving force behind the fund’s 90+ year record of investment success. Were it not for the decision of … [Read more...]
Archives for November 2019
Stock Investors: Set it and Forget it!
You can read until you’re blue in the face about how the current high level of cash is a bullish signal. That investors, fearing they’re missing the boat may begin to pile into the stock market. That may be the case, but does it mean you should increase your allocation to stocks? It depends. Do you have the patience to hang in there if they fall in value by say 20 percent? Or are you hoping for a gain of 20 percent to make life “easier?" I think you’d be wise to remember what my father in law Dick Young says, “Hope is not a strategy.” You can also read about how the investment committees of … [Read more...]
There’s No Better Way to Put Time to Work for You
Over the weekend I received this email from a client: Hi EJ, My recently departed friend, George B. of Putney, Vermont was a volunteer driver delivering lunches to Meals on Wheels clients in the Brattleboro area. Ronald Read was on his route. George was stunned to learn that Mr. Read had accumulated so much wealth. Thought you might find this of interest. Also, George was a fellow grad of Northeastern University, 10 years before me. Regards, David L. David had read about Ronald Read in Dick Young’s Intelligence Report of May 2015. Dick wrote then: Pumping Gas to the Tune of $8 … [Read more...]
Are You Saving the Right Way?
How much is your bank paying you on your savings account? If you have a savings account at Bank of America, you’re likely getting paid $5 for every $10,000 you have deposited. That’s 5 basis points or .05%. Do you know how long it would take to double your money at a .05% rate of return? Almost 1,400 years. BofA’s savings account yield makes Schwab look generous with a .10% cash yield. And Fidelity looks like an absolute saint, offering investors a yield of 1.5% on their core cash account. Who do you have to thank for the paltry interest you are earning on your savings … [Read more...]
Does Big Government Create Poverty?
Perhaps the best thing about suggestions by candidates like Bernie Sanders and Liz Warren to a welfare model closer to those seen in Europe is that there are years of evidence about what that could mean for Americans. Despite the candidates' cherry-picking of old and debunked data, there is a lot of evidence in Europe that legislating wealth equality will, in fact, have the opposite effect. My friend Chris Edwards of the Cato Institute writes about a new study by Pirmin Fessler and Martin Schurz that suggests welfare programs are making wealth inequality worse, not better. Fessler and … [Read more...]
Can You Have an Affordable, Warm, Gun-Friendly Retirement?
Some retirees want it all, and by that, I mean a state with warm weather, firearms freedom, and low costs. Catey Hill, an editor at MarketWatch, was asked for just that by a retiree living in California. She responded with some ideas for locations offering just that. She wrote (abridged): You’re not alone in wanting to flee California in retirement — and for you, the costs make it hard to live anywhere in California on your Social Security checks alone. Though you’ll be hard-pressed to find a state with weather as good as it is in many parts of the Golden State. That said, I’ve found some … [Read more...]
Big Macs or Sit-Down Service
Today, you can lend $10,000 to the U.S. government, which just closed its books for the year with a deficit of almost $1 trillion, and lock in an income stream of about twelve dollars per month for the next decade. That’s enough to treat yourself and the wife to a couple of Big Macs once a month. But if McDonald’s keeps raising prices, a couple of years from now, you may need a buy-one-get-one coupon to treat the wife. The interest payments on government bonds are fixed, and are so tiny today they don’t even keep pace with the massaged inflation numbers reported by the Labor … [Read more...]
Your Retirement Life Under Democrats Would be Tragic
If you think the Dems are only after billionaires (and I know you don’t) then think again. Here you get a look at how they’d treat an estate worth $3.5 million, which will cast a huge net capturing savers like you. Anna Sulkin writes at WealthManagement.com: Rep. Jimmy Gomez (D-Calif.)recently introduced legislation, For the 99.8% Act (the Act), aimed at lowering the estate tax exemption amount and increasing the tax rate for some of the wealthiest Americans. The Act is identical to the legislation introduced by Sen. Bernie Sanders (I-Vt.) earlier this year. Under the Act, estates would … [Read more...]
New Update! Ken Fisher Won’t Take No for an Answer
“We ended ours a long time ago. It was a disaster from day 1,” a reader wrote to me recently. Then there’s this: “The hard-selling was relentless, even infuriating, prospective customers said,” explains Janet Lorin at Bloomberg. “Marketers called homes, spammed work email and impersonated friends, colleagues, and government officials.” The Bloomberg article continues: “CALLS REPEAT EVERY DAY. I SUBMIT A COMPLAINT EVERY DAY. NO CORRECTIVE ACTION TAKEN. WHAT CAN I DO???????????????????,” a resident from Waterford, Pennsylvania, wrote in a July 2016 email. Would-be clients were … [Read more...]
Warren’s Tax Plan to Pay for Medicare for All is Finally Here
After avoiding questions about her plan to pay for Medicare for All throughout the campaign, Elizabeth Warren has finally unveiled a new tax plan to do just that. The plan would: Raise $2.3 trillion with stricter foreign tax compliance, instituting a country-by-country minimum tax on foreign earnings of 35%—equal to a restored top corporate tax rate for U.S. firms—and forbidding deferrals of those payments Raise another $400 billion by legalizing undocumented immigrants and requiring them to pay taxes. Turn the "temporary" Overseas Contingency Operations fund into a permanent … [Read more...]