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A PUBLICATION OF FUND FAMILY SHAREHOLDER ASSOCIATION • VOL. 26, NO. 1

Meandering Markets

DECEMBER TURNED OUT TO BE SOMETHING OF A MICROCOSM

of the year with

its swoops and swoons.

Total Stock Market Index

was down 3.9% midway through

December but ended the month with a 2.0% loss, and finished the year with a fractional

0.3% gain.

Total Bond Market Index

was up almost a half percent at one point but

ended the month down 0.4%. It also finished 2015 with a 0.3% gain. Though I know

the turn of the calendar is meaningless in the investment context within which you and I

work together, I’m glad we made it out of 2015 bowed but not broken.

It wasn’t only the financial markets that made stomachs churn as 2015 came to a

close. Many of you reported that dividend distributions were messed up when Vanguard

began consolidating fund and brokerage accounts, sometimes reinvesting when you

wanted cash instead, for instance.

Vanguard says it’s fixed the problem, investors will be made whole and that the prob-

lems were limited to a “modest” number of accounts. My advice: Make darned sure that

your money is where you expect it to be, and that it’s going where you want it to go. Please

keep me apprised of any further travails by emailing at

service@adviseronline.com

.

Oh, and that wasn’t the only service glitch I heard about as the year was coming to a

close. Apparently, if Vanguard tells you they’ll be able to handle the required minimum

distributions from Vanguard-offered 401(k) or 403(b) plans, you’d better check and

double-check. One Flagship member (that’s someone with at least a million bucks at

Vanguard and who is supposedly working with Vanguard’s best client reps) told me that

The Independent Adviser for Vanguard Investors

and FFSA are completely independent of The Vanguard Group, Inc.

OUTLOOK 2016

Pause, Regroup, Continue

RETURNS DROPPED, AND VOLATILITY ROSE.

And in the end, 2015 left most investors

with little to show for their efforts.

That’s about as succinct a description of the past year as I can come up with. How that

translates into what we can all expect in the coming year is the million-dollar question,

of course. Here’s what I’m thinking.

First, I think the story in 2016 is going to be the strength of the U.S. consumer and the

willingness, or lack thereof, to spend. With the political silly season giving way to prima-

ries and then a full-on campaign, it wouldn’t surprise me one bit if consumers keep a tight

grip on their wallets. Why? Call it uncertainty, of which there’ll be plenty to go around.

That very uncertainty could breed opportunity. Like stocks, earnings didn’t really

go anywhere in 2015, and I truly believe that the stock market’s biggest drivers are

DOW JONES INDUSTRIALS

December Close:

17425.03

STANDARD & POOR’S 500

December Close:

2043.94

4400

4650

4900

5150

5400

DN OSA J JMAM F J

NASDAQ COMPOSITE

December Close:

5007.41

0.00%

0.04%

0.08%

0.12%

0.16%

0.20%

0.24%

DN OSA J JMAM F J

3-MO.TREASURY BILLYIELD

December Close:

0.17%

1.6%

1.9%

2.2%

2.5%

2.8%

DN OSA J JMAM F J

10-YR.TREASURY NOTE YIELD

December Close:

2.27%

16000

16600

17200

17800

18400

DN OSA J JMAM F J

1900

1950

2000

2050

2100

2150

2200

DN OSA J JMAM F J

AVERAGEVANGUARD INVESTOR*

December:

-1.4%

YTD:

-0.4%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

DNOSAJ JMAMF J

*See the footnotes on page 2.

Model Portfolios................................................................ 2

Ear-Plug Approved............................................................. 4

2015 Year in Review.......................................................... 6

Performance Review.................................................... 8-11

2015 Scorecard............................................................... 12

Contribute the Max for Retirement................................ 13

Morgan’s Multiple Manager Mess.................................. 15

Active Wins!.................................................................... 16

JANUARY 2016

SEE

MEANDERING

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S P E C I A L E X P A N D E D 1 6 - P A G E I S S U E

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SEE

OUTLOOK

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