One of the recurring themes in the financial press in recent years is a warning to income-oriented investors not to pile into dividend-paying stocks to boost portfolio income. The Wall Street Journal has a recent article on this topic titled, “Why Dividend Stocks Aren’t the New Bonds.” This article is motivated by the fact that $17 billion flowed into equity-income funds in 2010 even as $80 billion flowed out of U.S. equity funds.
The arguments made by the WSJ article are similar to those in a November 2011 blog post by Vanguard’s Chief Economist, Continue reading →
Taylor Larimore, Mel Lindauer and Michael LeBoeuf are the co-authors of The Boglehead’s Guide to Investing. Acolytes of Vanguard founder Jack Bogle, they believe in long-term, low-cost index fund investing. Here’s their advice on what resolutions an investor should make for 2011. Continue reading →
Vanguard founder and investing icon John Bogle doesn’t believe we’re in a bond bubble, but he does think bonds will produce only modest returns for quite some time. Still he says investors generally belong in the conventional stock and bond markets — not reaching into more exotic categories for yield.
In this interview (video below) with Morningstar at the recently concluded Bogleheads reunion outside Philadelphia, he runs through a common sense approach to estimating what kind of yields investors can expect over the next five to ten years from those conventional categories. Continue reading →
Swedroe, an avowed proponent of passive investing, wanted to clarify his position. It’s not that investing skill can’t exist, he argued, it’s that if it does, the markets will, over time, erase that advantage. And, just as importantly, that it’s impossible to predict where that skill will show itself. We’re betting against the odds if we try to pick the winning investors (or fund managers). Continue reading →
Yesterday Mel Lindauer, Forbes columnist, book co-author, Boglehead extraordinaire, offered some advice for younger investors. Rocky markets like the one we’ve been bobbing along in are great for the young, Lindauer argued, because investments are essentially “on sale” at the moment.
But the perfect market for someone in their 20s is a tough one for someone in their 60s. The last few years have been extremely tough for those close to retirement. In today’s post, drawn from the same interview with Lindauer, he addresses the challenges older investors face and the downside of a down market. Continue reading →
Mel Lindauer, Forbes columnist, book co-author, Boglehead extraordinaire, draws a road map for young investors in this installment of Portfolio Investing 101. Among his rules: start early, buy cheap if you can, automate your savings, and use your asset allocation to diversify your bets and manage your risk. Continue reading →