Young Research & Publishing Inc.

Investment Research Since 1978

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Vanguard is Telling You the Problem with Indexing

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If you want to understand the problem with index investing, then consider what the king of indexing is doing. Recently Vanguard announced its robo-only advisor service. If you signup for this, you will not speak with a live representative and you will not be allowed to invest in non-Vanguard funds. When you step back and consider all of the advertising Vanguard is doing for its actively managed funds the reason becomes crystal clear. I want you to pay attention here. Indexing or passive investing will destroy the wealth of the masses asleep at the wheel. You will not be one of them, I … [Read more...]

Your Retirement Life: Is Vanguard Throwing Caution to the Wind?

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You may have read that Vanguard is moving into a digital robo-only service. My take? Well, first off, when you sign-up for Vanguard advisor services you’re only going to be offered Vanguard funds. You will not be investing in my preferred, dividend centric stock approach. You are treated like all of the other sheep loaded into the mutual fund pen. Second, I believe Vanguard is essentially throwing in the towel (they’d never admit it) about their index funds and the problem with how big they’ve become. Offering a robo-only service will be a backdoor way for Vanguard to steer investor … [Read more...]

The Fed is Clueless

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Don’t be head-faked by the Federal Reserve’s 25bps cut in the Fed Funds Rate (FFR) this week. Because the real story is in Repo where demand for Treasuries has been through the roof. If you look at my chart on the 10-year Treasury you can see this problem began not in 2019 but at the end of May 2018.   Most investors, including the Fed, don’t understand bonds. The bond market, like stocks, is ruled by supply and demand just like real estate, for example. Something is going on with the plumbing of the global monetary system that the Fed is clueless about. For more … [Read more...]

The Rich and Famous: How to Invest Like Jay Leno

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If you want to see Jay Leno’s home in Newport, RI all you have to do is leave my office, turn on to Bellevue Avenue and head out to Ocean Drive, and you’ll see it right there on the water. “Leno and his wife first admired the house around 30 years ago, when he was in Rhode Island for a standup gig,” explains Fred Albert in Newport Life. “In 2017, the couple drove by it again — only this time, they stopped. ‘Let’s see if it’s for sale,’ Leno said, taking advantage of a departing gardener to slip through the open gate and drive up to the front door, where a caretaker greeted him.” Albert … [Read more...]

This is Why Vanguard is Too Big

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If you want clear evidence of why Vanguard is too big, then look no further than the money flow into passive index funds. When investors are lulled to sleep by a bull market, they dream about things like early retirement, vacations, and second homes. What they tend to miss is that reversion to the mean is a fact of life. You can take my word for it and that of the father of index funds Jack Bogle. Index funds, like those built based on the S&P 500, weight the shares of a small number of the biggest companies heavier than those of small companies. That's the ugly truth behind the S&P … [Read more...]

Your Retirement Life: To Everything There is a Season

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Here in New England, you can already feel the change in seasons approaching. You can smell it in the crisp, dry, morning air and see it from the lower sun angle. You can hear it as noisy cicadas whir and squirrels busy themselves in the trees, signaling a change from Summer to Fall is near. You can even feel it, like when you’re wondering if your family is well prepared for the Fall and Winter. That kind of thinking is good. It means you’re alive, you want to stay that way, and you still want to live your life. A Terrible Foe Can Hold You Back There is one thing that keeps more … [Read more...]

The Two Reasons Muni Bonds Don’t Belong in Your Portfolio

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Two reasons municipal bonds don’t belong in your portfolio are underfunded pensions and Wall Street. In the case of underfunded pensions look at what happened to GM. It was the bondholders who got skewered. When push comes to shove who do you think will get paid first, you or the government employees (pensions)? And then there’s Wall Street. Tom McGinty and Heather Gillers explain in The Wall Street Journal, writing: When the West Contra Costa Unified School District in California needed money to repair and upgrade deteriorating classrooms, it hired Piper Jaffray Cos. to sell $191 … [Read more...]

Dividends Win Today, They Won Yesterday, and They’ll Probably Win Tomorrow

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It’s been quite the run for dividend paying stocks as you can see in the performance of our Retirement Compounders, which sort of looks like bragging. Believe me I’m not. Imagine for a moment you have a pile of cash. Where are you going to put it? Into the S&P 500? A passive index fund? Not me. Legendary investor Jack Bogle, and now Michael Burry, whose story was immortalized in The Big Short as one of the first investors to call the subprime mortgage crisis, have expressed their concerns. “There no longer can be any doubt that the creation of the first index mutual fund … [Read more...]

Trump’s Plan to Finally Privatize the Mortgage Industry

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Since the financial crisis, mortgage companies Fannie Mae and Freddie Mac have been languishing on the federal government's balance sheet. The two federally backed mortgage securitization companies were taken into government conservatorship in 2008. Now, Federal Housing Finance Agency director Mark Calabria has been tasked with the almost impossible task of reprivatizing them. I know Mark from his time at the Cato Institute, and I can tell you that he is passionate about this fight. If anyone can do it, it's Mark, but it won't be easy. Congress has been less than helpful to the Trump … [Read more...]

You Can Kiss Your Savings Goodbye if this Happens

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Your key to investment success is to align yourself with companies that are aligned with you. What do I mean? When it comes to investment counsel and account management, you want a fiduciary at the helm. By law, a fiduciary must act in your best interests. When it comes to investing your hard-earned money you want to own companies that put you the shareholder or owner at the head of the table. If Elizabeth Warren is elected those two investor rules to live by are thrown out the window as explained below by Phil Gramm and Mike Solon at The Wall Street Journal. Do yourself and your money a … [Read more...]