Hotline
January 19, 2017

Trading Rumors for Reality

Buy on the rumor, sell on the news. The post-election rally has been driven by investors buying on rumors—rumors about better trade deals, lower taxes, the return of jobs lost to foreign countries and the like. Since Election Day, the Dow index has gained 8.6%, while the S&P 500 is up 6.6%. And small stocks have soared on the expectation that companies that rely less on exports will benefit when the trade barriers go up. That's the rumor. Now, where's the news? And will the news bring a sell-off? I think it's highly likely. It won't be permanent, of course (since, ultimately, stocks move on earnings and interest rates), but don't expect the first 100 days of Donald Trump's administration to be bullish for Wall Street. Read More »

Issue
January 2017 PDF

Tune Out the Noise

If you are going to make one financial resolution this New Year, make it this: Ignore the pundits and talking heads. 2016 gave us plenty of excuses not to be invested: Faltering prices in January, slowing growth in China, negative interest rates, the U.K.'s Brexit vote and Donald Trump's surprise win–to name a few. The Dow hit no fewer than 26 new highs in 2016–each one an opportunity to "sell at the top." Yet investors who got caught up in the headlines and sold out missed the sizable gains the U.S. markets finished out 2016 with. Read More »

News
December 30, 2016

Hot Hands 2017

My Hot Hands strategy is a mechanical, momentum-based strategy that relies on the idea that hot hands stay hot and that what's worked over the past 12 months should work over the next 12. The numbers are in, and I have just announced the calendar-year Hot Hands pick for the upcoming year. Read More »

Most Recent Forum Threads
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3
Reply

Re: Bond Allocation

teresi (01-22-2017) wrote: I don't consider high yield bonds as real bonds. They are too correlated with stocks. Bonds are there to add diversification (by adding protection during market crashes). High yield will often drop 60-70% as far as stocks during a crash. Scott Read More »

7
Reply

Re: Roth IRA

teresi (01-22-2017) wrote: Kevin has gone over a lot to consider if you build your own portfolio. But that can take a lot of studying, and even then, after many years, I still can't say with certainty how much smallcaps, midcaps, or largecaps I would recommend to someone! To keep things simple, I would... Read More »

Guidebook 2017 cover
Order your copy of the 2017 Independent Guide to the Vanguard Funds today

"America's leading expert on investing in Vanguard funds"

Daniel P. Wiener is editor of The Independent Adviser for Vanguard Investors, a monthly newsletter that keeps abreast of recent developments at Vanguard, and the annual FFSA Independent Guide to the Vanguard Funds. Through his newsletter and guide book, Dan helps tens of thousands of Vanguard investors choose wisely among more than 100 Vanguard mutual funds. The Adviser is a five-time winner of the Newsletter Publishers Foundation's Editorial Excellence Award. View More »

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Vanguard Funds Correlation
What's This?
Model Portfolio Performance
Models December 2016
Growth 1.5% 9.6%
Conservative Growth 1.4% 9.6%
Income 1.0% 6.4%
Growth Index 1.6% 12.0%
The average
Vanguard investor
1.4% 7.6%
Past Performance »
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