Let’s clear something up real quick. If you’re invested with Vanguard and it’s a major undertaking to shift your portfolio to Fidelity Investments—there are worse places to be stuck. In an industry littered with terrible, high-cost products, you’re lucky to be at low cost, no front or back-end load Vanguard. But what you might own at Vanguard and seeing how its assets continue to expand is concerning.
As an aside, Vanguard has had some great managers retire such as the GNMA fund’s Michael Garret, from sub-advisor Wellington Management. You never hear about his retirement party. It makes it feel like Vanguard is being secretive, where unless I did some digging around it would have gone unnoticed by a lot of you fund holders.
When Vanguard founder Jack Bogle sounded the alarm about index funds, it was as if he didn’t exist—shuffled into retirement by leadership to a Malvern campus office that felt more like a secluded cabin in the woods. You don’t do that to the person who put you on the map.
On his deathbed, a friend asked my client if he would look after his daughter’s finances when he was gone. For years my client did that for his friend with the help of my father-in-law’s Richard C. Young’s Intelligence Report. But my client isn’t comfortable doing this anymore and asked Vanguard to come up with a proposal.
Note: Vanguard doesn’t work with outside advisors, so all recommendations are limited to Vanguard funds/ETFs. In this 37-page document a huge chunk was dedicated to the Jabba the Hutt of funds, the Vanguard Total Stock Market Index. The gentleman on the face of the report, the advisor/rep, looks like he just graduated from college, perhaps just getting started with his own savings.
When you push back and ask questions about the Total Stock Market Index, I know you’re going to be told it reflects close to 4,000 U.S. traded stocks. True. But, they probably won’t tell you that ten names make up a quarter of the fund’s assets. And when you give your life savings to someone who’s just getting started with his, how can he be in tune with yours? After all, you can’t know what you don’t know.
Action Line: Use this lull in the markets to get your financial house in order. If you’re uneasy in times like these, it’s probably for a reason. I’d love to talk to you.
P.S. Don’t think you’re the only one worried about money. Share this with a someone you care about.
