16
•
Fund Family Shareholder Association
DAN’S DO-IT-NOW ACTION RECOMMENDATIONS
4
The tax man takes his due from every fund, but some funds are better at avoiding his reach than
others. Just don’t let the tax tail wag the portfolio dog. (See page 1)
4
Adding more managers to a fund tends to dim its prospects. Some multimanaged funds, like
U.S. Growth
, you should avoid. Others, like
Selected Value
, still have the potential to shine.
(See pages 4 and 6)
4
Precious Metals & Mining
may be better than its peers, but don’t be fooled—this isn’t a
crowd you want to be spending much time with. (See page 5)
Never Use a
PIN
Again
AdviserOnline.com
is more streamlined
and easier to use than ever. But there’s one
thing that can make it even better: Setting up
your unique username and password. Instead
of looking for a new PIN on page 1 of the
newsletter each month, you can simply use
your own personalized login.
If you don’t have your own unique login, you
should set it up now, as
we’ll be discontin-
uing the PIN in the coming months
. Here
are a few tips to help you set up or modify a
unique login:
Create a username and password
at
.
You’ll need your account number, or if you
just joined, your order number. Both can be
found on correspondence you receive such as
the Hotline emails.
Modify your username and password
at
.
php. All you need is your current personal
login information.
Forgot your username or password?
No
problem. Reset it at
/
password/forgot.php. Again, you should have
your account number or order number handy.
Set up or modify your login at AdviserOnline.
com today. If you have any questions or prob-
lems, call us at 800-211-7641 or email us at
.
Daniel P. Wiener
is America’s leading expert on
the Vanguard family of funds. He is founder of
the Fund Family Shareholder Association and
chairman and chief executive officer of Adviser
Investments, LLC, a Newton, Massachusetts,
investment advisory firm (800-492-6868). As
editor of
The Independent Adviser for Vanguard Investors
, he is
a five-time recipient of the Newsletter Publishers Foundation’s
Editorial Excellence Award. He also edits the annual
Independent Guide to the Vanguard Funds.
Mr. Wiener is often
quoted in the nation’s leading financial publications.
Jeffrey D. DeMaso,
Editor/Director of
Research, works directly with Dan Wiener
researching and writing the multiple-award
winning
Independent Adviser for Vanguard
Investors
newsletter. He also leads the analyst
team for Adviser Investments, LLC, helping to
oversee $2.7 billion in assets. Jeff graduated
magna cum laude
from Tufts University with a B.A. in economics in 2006, holds
the Chartered Financial Analyst designation and is a member
of the CFA Institute and the Boston Security Analysts Society.
JACK BOGLE FINALLY SAID
what I’ve
been telling you for some time: The
overweight of Treasurys in Vanguard’s
bond index funds is bad for your finan-
cial health, and a good dose of cor-
porate bonds and municipal bonds
will improve your performance with-
out adding undue risk. But let’s allow
Bogle to speak for himself, as he did in
a recent interview with ETF.com.
“I go to basically short-term and
intermediate-term municipals in my
personal account, and, in my retirement
plan account, which is my largest asset
here, I use intermediate-term corporate
and short-term corporate debt.”
Why does Bogle do this?
“The bond index is much more heav-
ily weighted in government debt—72
percent—than most investors need to be.”
And he goes so far as to suggest
that
Total Bond Market
should be
changed—that the index the fund tracks
is flawed.
“I’d rather have a lower Treasury
position, change the Bond Market
Index a bit, have a lower Treasury
position and get extra income the way
I’ve described…I think the index is
wrong.”
Just to put real numbers on it, at the
end of March, Total Bond Market’s
allocation to Treasury bonds was
44.1%;
Short-Term Bond Index
had
68.4% of its portfolio in Treasurys;
Intermediate-Term Bond Index
,
51.3%; and
Long-Term Bond Index
,
35.2%.
This is why you find funds like
Short-Term Investment-Grade
and
Intermediate-Term Investment Grade
in the
Model Portfolios
, as well as
High-
Yield Corporate
, though Bogle says he
is not a fan of high-yield either.
n
QUOTABLE
Bogle: Total Bond Bad
“The bond index [Total
Bond Market] is much
more heavily weighted
in government debt than
most investors need.”
—JACK BOGLE
