Yesterday I asked readers Do You Know this about Vanguard Wellington and Wellesley Funds? I explained that we have not soured on the funds, but that their effective maturities are longer than we'd like. I also wrote that at Young Research we recommend laddering bonds. One of the reasons we favor laddering bonds is to help strip-out interest rate risk. When you own a bond outright you have control over your holding period. Duration measures a bond’s sensitivity to interest rates. For example, a bond with a 15-year duration will decline by 15 percent with every one percent increase in … [Read more...]
Your Questions, My Answers: Custodial Accounts and Gifts to Minors
Considering a monetary gift for your grand-kids for Christmas? They will certainly be happy, but you should read through this piece I wrote back on November 16, 2018 first. Your Question: My mother is planning on gifting my children some money this year. Since there is enough in their 529 accounts, I thought I would open custodial accounts for them to take care of this money, and start them on the road to retirement saving and learning about investing. In your opinion, is a custodial account the best option in this situation and if so, is Fidelity a good place to do it? My Answer: Yes. I … [Read more...]
Do You Know this about Vanguard Wellington and Wellesley Funds?
As you know our concerns about Vanguard continue to mount. Yesterday, a reader wrote: “[Dick] used to be big on Wellington and Wellesley, given their longevity and resistance to tail risk over time. Also, it seemed to me that Wellington Management's fixed income expertise would be an asset in this part of the cycle. I'm wondering why he has soured on these funds.” The quick answer is no we have not soured on Wellington and Wellesley with two distinctions. First, Vanguard has nothing to do with the management of Wellington and Wellesley. Vanguard has outsourced those management … [Read more...]
Fidelity is Boston and Boston is Fidelity
When you’re an intern at a start-up, you have certain responsibilities. For me, it was to go pick-up lunch when the founders ordered out. But what was cool about being the intern was that I had a seat at the table. I was privy to all their war stories. It was fun (for them) to talk about how hard it was when they were my age—broke, jobless and about to graduate from college. As they looked back it was the road not the destination. Easy for them to say. One of the stories I liked best was when the CEO would talk about how he decided to work in Boston. He said, “I knew it was going to be hard … [Read more...]
Vanguard GNMA and a Winter of Political Polarization
Anyone who tells you politics has nothing to do with investing is simply not paying attention. In this winter of political polarization—a deep freeze—politics matter. Case in point. Look at Vanguard GNMA. For most of 2018, Vanguard GNMA has been sledding from a peak of $10.45 in January. Guess when the trough, or bottom was hit? November 6th the day of the midterm elections. Since then, as you’ve witnessed, stocks have been twitching like a desperate squirrel working through that last nut for the winter. Not Vanguard GNMA. It has been steady, up close to two-percent, closing at … [Read more...]
Babson College Announces New President
"Babson College, which marks its centennial next year, has tapped a familiar face to replace Kerry Healey, its outgoing president and the first woman to lead the Wellesley business school," reports the Boston Globe. "Stephen Spinelli Jr., a cofounder of Jiffy Lube International, Inc. who worked at Babson from 1993 to 2007, will become the college’s 14th president in July, the school said Friday." Laura Crimaldi writes: Spinelli, 63, is returning to the school after spending 11 years in Pennsylvania, where he served as president of Philadelphia University and negotiated the school’s merger … [Read more...]
Coldplay: A Head Full of Dreams
If you like Coldplay (I do) then you’ll love their new documentary A Head Full of Dreams (Prime Video) covering the British quartet’s first two decades. What stood out to me was when lead singer Chris Martin told the camera that all of their best songs were written in only ten minutes…but it takes months of single minded focus to get to that ten minutes. Isn’t that the truth. A Head Full of Dreams (trailer) Everglow Fix You Hymn for the Weekend … [Read more...]
Your Retirement Life: Gone Fishin’ at Bud N’ Mary’s
On a recent trip to the Florida Keys, a client visited Bud N’ Mary’s in Islamorada, FL. If you're a fisherman you'll want to check out this neat video about this sport fishing institution. … [Read more...]
“E.J., Has Your Phone Been Ringing off the Hook?”
With market volatility creeping upward, this is once again a question I'm getting, but I urge you to reread what I wrote back on February 28, 2018. Well this was a fun month for the stock market with wild swings from high to low of around 2,000 points in the Dow Jones Industrial Average. One question I’m asked on a consistent basis is “E.J., is your phone ringing off the hook?” and my answer is “no,” and I know why. Most of you have been educated by Dick Young that investment success is achieved over a lifetime, not a month or two. Investment success is about hitting singles and … [Read more...]
Wealth Management Pitfall: ESG, Part II
Earlier this week, I wrote to you about the pitfall of environmental, social and governance investing, or ESG. Thousands of investment firms have signed a pledge to follow ESG and abide by a United Nations sponsored statement of principles. The problem here is multifold. First, your investment advisor should act as your fiduciary not an environmental activist with your money. Second, the number of state pensions that have signed this pledge is appalling. Not only are these pensions underfunded, but the administrators are using other people’s money (retired teachers, police, and firemen … [Read more...]
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