(PUB) Investing 2016

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Fund Family Shareholder Association

www.adviseronline.com

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. Jeff gradu-

ated

magna cum laude

from Tufts University with a B.A. in

economics, holds the Chartered Financial Analyst designation

and is a member of the CFA Institute and the Boston Security

Analysts Society.

DO-IT-NOW ACTION RECOMMENDATIONS

The turmoil in foreign markets is creating opportunities. If you don’t have a position in for-

eign stocks,

International Growth

is the fund to buy. (See page 1)

When you read that Vanguard returns all its profits to fund shareholders, remember that

millions of dollars are actually going to its senior executives. (See page 7)

One-third of

Explorer Value

’s three-adviser portfolio team was shown the exit. I still

wouldn’t rush to buy the fund, though. (See page 15)

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When I started this newsletter in 1991, I had

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fund data by hand. But now, thanks to advances

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how global trade and commerce

function today or tomorrow, as the U.K.

is still part of the E.U.—its withdrawal

will take time. Once the U.K. elects a

new prime minister (current PM David

Cameron has said he will resign) in late

2016, they will need to invoke Article

50 of the Lisbon Treaty, which gives the

country two years to negotiate a new

agreement with the E.U.

That said, for U.S. investors and our

economy, the immediate impact should

be negligible. U.S. exports to the U.K.

only represent 0.7% of U.S. GDP, and

just 3% of revenues for all 500 com-

panies in the S&P index comes from

the U.K. The largest unknown is what

this means for the long-term viability

of the E.U. The populist and national-

ist sentiment behind the vote to leave

the E.U. is in no way a U.K.-only phe-

nomenon. Those undercurrents can be

seen across Europe, and even at home

here in the U.S. How this plays out

over the coming years will be some-

thing to watch.

One thing we do know today is that

for U.S. investors, the stocks in European

Index are 7.1% cheaper than they were

a week ago. And the “sale” sign hasn’t

only been hung out in Europe. Over the

past week,

Pacific Index

has declined

1.8%;

World ex-U.S. SmallCap Index

is off 4.2%; and Total Stock Market

Index is down 0.8%. As with any envi-

ronment, there will be winners and

losers, but the disparity between the

two may grow as this drama continues

to unravel. This is the type of environ-

ment where highly skilled managers,

like those running International Growth,

can find good companies that have been

indiscriminately sold by investors rush-

ing for the exits.

Finally, take a step away from the

headlines and consider the big pic-

ture, shown in the chart on page 14: If

you’ve been an investor for the past two

decades, the MSCI EAFE index has

more than doubled during your invest-

ment career. Over the past 30 years, the

EAFE has gone up sixfold. It is up 35

times its starting value over the past 40

years. Now, consider all of the shocks,

surprises, scares and uncertainties that

have occurred in your life. I’ve said it

before, and I’ll say it again: It is time

in the markets that builds wealth, not

market timing.

Next month, we’ll have a conversa-

tion about Vanguard’s array of foreign

funds. In the meantime, stick with me

and with the managers at International

Growth, and we’ll be just fine.