A PUBLICATION OF FUND FAMILY SHAREHOLDERASSOCIATION • VOL. 24, NO. 4
Rational Expectations
HASTHESTOCKMARKET
suddenly becomemore rational?
High-flyingbiotechnology stocks gaveup10.6%of their gains inMarch asmomen-
tum and traders took a chill pill. Thehigh-flyingmarket for initial publicofferings (IPOs)
reversed course.KingDigital Entertainment (maker of the extraordinarilypopularCandy
CrushSagagame) offered its shares at $22.50 andpromptly tumbled19.2%.And, in a
broader sense, themarket that fell in January and rose inFebruary simplymuddled through
inMarch, leaving investors little to show for the first quarter’s rollercoaster ride.
Marchmay have come in like a lion, but it went out like a lamb. TheDow Jones
IndustrialAverage gained 0.8% for themonth, but is off 0.7% for the year. The
NASDAQComposite dropped 2.5% for themonth, and is up just 0.5% for the year.
I’m calling this a rationalmarket in part because neither earnings, nor economic fun-
damentals, nor news of a blockbuster treatment for cancer orAlzheimer’s have given
investors any reason to bid prices higher thanwhere they stood at their recent records.
TheDow remains 0.7% off itsDec. 31 record close, while the S&P 500 index did post a
new high onMar. 7 before backing off 0.3%.And by theway, though
HealthCare
lost
some ground, it’s still up a very healthy 8.8% for the year.
That isn’t to say that therewasn’t news tomove themarkets. The only thing crazier
thanVladimir Putinmay be the fact that theDow’s two biggest up days duringMarch
came on theTuesday after the SundaywhenRussia invadedCrimea, and on theMonday
after the SundaywhenCrimeans voted to secede. TheCrimeanmess is a geopolitical
quagmire, but it’s a longway from having a discernible impact on valuations, beyond a
few companies thatmay be relying onRussian contracts.
The Independent Adviser for Vanguard Investors and FFSA are completely independent of TheVanguardGroup, Inc.
RETIREMENT
OpenYour Teen an IRA
EVERYYEAR,
when Iwrite about opening an IRA for your teen or grand-teen, I hear
fromFFSAmembers, friends, and even familywho say, in a nutshell, “Great idea.”And
it is. Helping a young person get on board the retirement trainmay not get you lots of
appreciation today, but trustme, the beneficiary of your forward thinkingwill thank you
for years to come as theymove into adulthood.
Whether you call themMillennials, GenYs, or EchoBoomers, the Internet generation
is amassive group of teens and 20-somethingswho could use a kick in the pantswhen it
comes to planning for retirement.
I know it sounds a bit crazy to talk to teenagers about retirement and IRAs. I can hear
the howls of laughter. “Retirement?” you ask. “Who are you kidding?The kid couldn’t
DOWJONES INDUSTRIALS
MarchClose:
16457.66
STANDARD&POOR’S500
MarchClose:
1872.34
3000
3300
3600
3900
4200
4500
M F JD NOS AJ JMA
NASDAQCOMPOSITE
MarchClose:
4198.99
0.00%
0.02%
0.04%
0.06%
0.08%
0.10%
M F JD NOS AJ JMA
3-MO.TREASURYBILLYIELD
MarchClose:
0.03%
1.6%
2.0%
2.4%
2.8%
3.2%
M F JDNOS AJ JMA
10-YR.TREASURYNOTEYIELD
MarchClose:
2.72%
14000
14900
15800
16700
17600
M F JD NOS AJ JMA
1500
1600
1700
1800
1900
2000
M F JD NOS AJ JMA
AVERAGEVANGUARD INVESTOR*
March:
0.4%
YTD:
2.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
MF JDNOSAJ JMA
*See the footnotes onpage 2.
Model Portfolios................................................................2
March Special Distributions..............................................3
TheGap in Investor Returns.............................................4
Buy High!..........................................................................6
ExplorerValue Stays Small................................................7
Performance Review.................................................... 8-11
Interview: Donald Kilbride...............................................12
Dan’s Do-It-NowAction Recommendations....................16
PIN
3461
APRIL 2014
SEE
RATIONAL
PAGE3
>
S P E C I A L E X PA N D E D 1 6 - PA G E I S S U E
>
SEE
RETIREMENT
PAGE12
