When times are tough Vanguard GNMA, managed by Wellington Management, has been an absolute force for retired and soon-to-be retired investors. Pay attention here. We’ve already had two substantial cracks in the market so far this century. Originally posted on Yoursurvivalguy.com. … [Read more...]

“E.J., what’s going on with Vanguard GNMA?” my mother asked me the other day. “Hi mom” I said. “Hang in there.” Hard to believe but Vanguard GNMA is yielding just over three percent today. Yes, its price is down but you only lose when you sell. And I’m not selling. I’m buying more at lower prices and taking the three percent. Because it’s a three percent world. I’m just living in it. “How about bank CDs?” you might ask. I see the teaser rates out there. But you can feel like a mouse on a wheel chasing rates and locking in FDIC protection. You can put a lot of money in Vanguard GNMA and … [Read more...]

Over the past year, the total return for Vanguard Wellesley has been just over five and half percent. “Five and a half percent? What’s so great about that,” you might think. Well, it can be great if you’re a patient investor and you allow the miracle of compound interest, what Albert Einstein is said to have referred to as the eighth wonder of the world, to work its magic for you. Father Time can be your friend, as I will explain in a moment. Yesterday, I was speaking with a client whom I’ve been working with since his mid-50s. He’s in his early 70s now but it hardly feels like close to … [Read more...]

Has there ever been a bigger supporter of Vanguard than Dick Young whom, unlike other promoters and hucksters out there today, never had a horse in the race? And could there be a better triple play combo than Wellington Management, Vanguard, and Dick Young’s approval? Vanguard’s low-cost expense ratios, no 12b-1 fees, and its history with Wellington Management were, among other valuable investor tenets, enough to recommend Vanguard to you. Buying Vanguard Wellington and Wellesley was simple. Owning them gave you a balanced portfolio with a stock to bond mix of 60/40 or 40/60. There … [Read more...]

When the financial crisis destroyed the stock market in 2008, guess which fund weathered the storm? You guessed it Vanguard GNMA. When the tech bust destroyed the stock market at the beginning of this century, guess which fund weathered the storm? Right again, Vanguard GNMA. That’s two huge busts in the stock market so far this century. Many mutual funds focus on 10-year performance. As 2018 moves forward into 2019, the brutal losses of 2008 will be rolled off, and investors may not see the risk inherent in stock funds as they make their allocation decisions. But a retirement lasts … [Read more...]

My history with Wellington Management and the Vanguard group goes back decades. I started with Wellington over 40 years ago. The Wellington Fund was founded in 1929 by CPA Walter Morgan to provide investment counsel to his clients. Morgan had the foresight to load the Wellington Fund with fixed-income securities months before the 1929 stock market crash. That decision helped Wellington become the tenth largest in the industry by 1944. In 1951, Morgan hired John Bogle, who would eventually become the firm’s CEO. In 1974, Bogle left Wellington Management and founded the Vanguard Group, … [Read more...]

A gorgeous, sunny, good morning to you from Newport, RI. Isn’t it amazing what a little sun can do to one’s psyche? Last week I told you how my SEP-IRA contribution was incorrectly deposited to my traditional IRA by Vanguard. Lucky for me, I caught their mistake early and avoided a potential paperwork hassle come tax-time next year. I chalked the error up to the fact that Vanguard is in the transaction business and mistakes happen. But in thinking about the issue further, I probably caught their mistake because I do this for a living. Which makes me wonder: is the average investor paying … [Read more...]

Famous hedge fund manager Bill Ackman of Pershing Square Capital Management is watching his investors flee his fund. It may take them some time to leave due to rules allowing the withdrawal of only an eighth of their investment each quarter, but even that slow rate of withdrawal is reducing the fund's assets under management. Scott Deveau writes at The Globe and Mail: Bill Ackman’s Pershing Square Capital Management is facing more bad news as many of the institutional investors in its private funds have asked to redeem their money. About two-thirds of the capital that investors could … [Read more...]

Personally, I have had only one minor administrative error recently with Vanguard where they incorrectly deposited SEP-IRA money into my traditional IRA. I called them to explain their error, they pulled up the letter of instruction, recognized their mistake and made the correction. Problem solved. With record inflows of more than $1 billion per day in 2017, or $369.3 billion, some investors are wondering if Vanguard’s success is a problem. I don’t think that’s the case. In a transaction oriented business there are always going to be mistakes. They can be corrected. When I worked at … [Read more...]