You read, here, here, and here, how Vanguard is not the Vanguard of yesteryear. That’s not necessarily a bad development if you’re at Vanguard, but it is if you’re, like me, an expert on Vanguard and see how much it has changed. There was a time when, without hesitation, we recommended Vanguard products, most often the Wellington fund (note: It’s not managed by Vanguard but rather by subadvisor Wellington Management Co, up the road in Boston, MA). It’s so big today. The problem with getting big is that the universe shrinks. Not to pick on Warren Buffett, but he’s a good example. The list … [Read more...]
Why Vanguard Is Too Big For You
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.
Learn more about why Vanguard is too big for you below:
Are You Being Held Captive by Vanguard/BlackRock?
As you read here, here, and here, there’s a changing of the (Van)guard taking shape with the installment of former BlackRock exec Salim Ramji as Vanguard’s new CEO—a first for Vanguard in hiring from outside the firm for the position. Ramji was Global Head of iShares & Index Investing at BlackRock. I’m sure if he could hear the news of the new appointment, Vanguard founder Jack Bogle would be rolling in his grave. Not that there’s been any lost love over the years at Vanguard for founder Bogle. It was the big shots in the Vanguard C-suite who pushed Bogle out to pasture, locating his … [Read more...]
20-years Later, Another Changing of the (Van)Guard
“I’ve been following Dick Young for decades,” you told me yesterday. And it’s a refrain I hear often in my conversations with you. There’s a reason Richard C. Young’s Intelligence Report was read by tens of thousands of subscribers every month: you. You looked forward to the opening stories. You enjoyed hearing about Dick and Debbie’s trips rolling down Main Street America on their Harley Davidsons. You enjoyed reading his tightly packaged investment advice. You saved the letters, underlined them, and shared them with your spouse. The letters were a reminder that simple is sophisticated. … [Read more...]
Are You Still with Vanguard, and Are You Concerned?
A long time ago, Vanguard founder Jack Bogle came up with a novel idea for a mutual fund company. Keep fees low, passively mimic the market, and let the shareholders mutually own the company. Then he went out to tell the world about his anti-Wall Street creation and thankfully had help along the way. In his monthly newsletter Richard C. Young’s Intelligence Report (IR), Dick Young echoed Bogle’s low-cost investing approach to his tens of thousands of readers. According to Bogle, Dick Young brought more investors into the Vanguard fold than any other newsletter writer. IR was sophisticated … [Read more...]
Vanguard, BlackRock, State Street like Self-Driving Cars
Are you paying attention to the trillions and trillions of dollars tied up in passive index funds mainly between the big three money managers: Vanguard, BlackRock, and State Street? Investors send money to these behemoths through 401(k)s, target date funds, and managed accounts like they’re riding in a self-driving car on autopilot. No thought whatsoever about what’s coming down the road. There’s no analysis by the firms. There’s no push back to consider another option. The money comes in and they indiscriminately buy more of the same stuff. What happens when prices turn down like they … [Read more...]
Big Box Investing and Taxes: Vanguard Is BlackRock
When it comes to investing, don’t let taxes wag the dog. Everyone wants the best way to save on taxes, but to consolidate assets with a “do-everything” outfit is simply that: a way for them to gather your assets and charge fees. But that’s the direction the industry is heading, and the shot across the bow was Vanguard’s change of guard with its new CEO, a former BlackRock exec. (You can read about that here and here). The tectonic shift at Vanguard and at other asset managers is a scramble to add revenue streams from you. This is not what founder Jack Bogle had in mind when he offered a … [Read more...]
The Trouble with BlackRo… er… ummm, Vanguard
Your Survival Guy is not thrilled about the announcement of Vanguard's new CEO, Salim Ramji. As one of the kings at BlackRock, Ramji helped put them on the ETF map. If you follow the money, you know that BlackRock has made a huge push into the advisory business. You know from here that index ETFs have raced to zero fees and are a commodity. Now, they need to make money selling advice and stuffing portfolios with annuity-like (read high fees) products. I'm sure Ramji is a nice guy. Maybe he isn't. After all, he's used to getting his way, seeing he was a debate champ who could probably … [Read more...]
Intelligence Report: Regime Change at Vanguard Spells Trouble
You’ll want to pay attention to your money if you’re still with Vanguard, because times are changing with the announcement of new CEO Salim Ramji. As a BlackRock alum, Ramji will be the first outsider in Vanguard’s roughly 50-year history. It’s another shot across the bow for acolytes of founder Jack Bogle. The godfather of low fees must be turning in his grave. Because let’s be clear about this move: It’s about finding more streams of revenue from you. You’ve already seen Vanguard move in this direction. It’s blown off course by selling fee-based advice, stuffing investors into their … [Read more...]
How’s Vanguard GNMA with YTM of 4.6%?
If you hold Vanguard GNMA like I do, then you will be pleased to know, regardless of its price being down, that as of 12/31/23, its yield to maturity was 4.6%. Sure, it’s been a rough ride for its price from the aftershock of historic interest rate hikes. But as you all know, Your Survival Guy doesn’t get too worked up about prices. At today’s yields, legacy positions maturing will be invested at rates you can sink your teeth into. But what if interest rates spike from here? So what? As investors look at the landscape of the huge debt overhang, won’t interest rates have to go higher? Maybe. … [Read more...]
Vanguard GNMA
Your Survival Guy’s been digging through his investment attic looking for wrapping paper and came across these four letters: GNMA. It’s been a while since I’ve written to you about Vanguard GNMA, and like most investments I make, I still own it. I’m a collector. A pack rat, if you will. I find things I forgot I have all the time. But I never really forgot about Vanguard GNMA. I know many of you, too, wonder about it. Let’s talk about it. It’s been slim pickings through the most recent years with Vanguard GNMA. But those are the cards we were dealt by the Fed’s zero percent interest rates … [Read more...]
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