Special Report from The Independent Adviser for Vanguard Investors
Best & Worst Funds for 2017
If you own, or are even thinking about any of these funds, CONTINUE READING THIS SPECIAL ALERT!
500 Index Total Stock Market Index Windsor II Total International Stock Index Total Bond Market Index Emerging Markets Stock Index
Short-Term Bond Index Wellesley Income REIT Index MidCap Index SmallCap Index Value Index
Dear Fellow Investor,
Do you own at least one Vanguard fund? Would you like to see your mutual fund portfolio grow faster?
Want more income from your investments?Could you use better advice about minimizing your taxes?
With Vanguard, it’s possible to grow your portfolio handsomely over time. And earn a great income through dividends every month.
It’s also possible to lose money at Vanguard. And wind up with a meager nest egg. With over 170 Vanguard mutual funds and ETFs, it takes a seasoned expert to sort through it all and make the right choices, at the right time.
Even at a conservative fund company like Vanguard, you have a lot of decisions to make:
For example, Vanguard has dozens of funds with the word “growth” in their names. Some of those funds have done well in the past.
This year, however, a number of those “growth” funds will actually lag the market.Others will continue to outperform—those are the few growth funds you should own as interest rates rise…
So, how do you choose winners consistently? What are the right criteria to use to pick stock funds and bond funds? What are the smartest ways to minimize taxes on your investments? We know—and in a moment we’ll show you how we do it.
Most of us don’t have the time to research every fact and figure of the world economy. You probably don’t have a burning desire to know all 170+ Vanguard funds inside out…but we do.
About Daniel P. Wiener & Jeffrey DeMaso
Dan Wiener is America’s foremost expert on The Vanguard Group. After serving as a reporter and editor for U.S. News & World Report and Fortune magazine, he founded The Independent Adviser for Vanguard Investors in 1991.
Dan is frequently a guest commentator on CNBC, PBS’s Nightly Business Report, and Bloomberg television, and is often quoted by publications such as The Wall Street Journal, Forbes,Barron’s, and Businessweek.
Dan is a five-time recipient of the Newsletter Foundation’s Editorial Excellence Award and is also the founder and CEO of Adviser Investments, with over $3 billion in its care for over 2,500 clients nationwide.
Jeffrey DeMaso is Co-Editor and Director of Research for the multi-award winning Independent Adviser and together with Dan Wiener, Jeff meticulously researches and evaluates all of the latest activities and news coming out of Vanguard.
If it impacts your portfolio, count on Jeff to raise a red flag. His market views and opinions have appeared in USA Today, Forbes, The Wall Street Journal, Barron’s, InvestmentNews and Kiplinger.
Jeff holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the Boston Security Analysts Society. He also leads the analyst team as Director of Research for Adviser Investments, LLC.
I'm Dan Wiener, founding editor of The Independent Adviser for Vanguard Investors newsletter and, along with Co-Editor and Director of Research, Jeff DeMaso, we tell smart Vanguard investors what they need to know to continue reaping the rewards of investing with the best mutual fund family around!
What we will teach you could save you thousands of dollars. That’s because we'll coach you on how to make better decisions about your Vanguard investments, day in and day out.
DOUBLE your Vanguard profits, pay less in taxes, and enjoy better peace of mind.
Know what will happen to your funds, BEFORE it happens!
Have you ever wondered why a great-performing fund suddenly changed direction and dropped like a stone?
It could be that Vanguard switched the fund’s management team. The Vanguard Group won’t warn you about profit-killing danger like that. But we keep track of EVERYTHING going on at Vanguard, and give you advance warning whenever possible. Often way in advance, so you have plenty of time to make smart decisions.
Why? Because The Independent Adviser is just that—independent advice about Vanguard. We're sometimes downright critical of what Vanguard is doing behind closed doors.
You see, we don't rely on the gobbledygook Vanguard publishes in its brochures and on its website—we interview the players behind the scenes and dig for the truth—and we don't get a cent from Vanguard, unlike a rating agency such as Morningstar. Those stars don’t mean a lot these days!
If a Vanguard fund we recommend closes and there’s a better alternative at another company, we'll tell you.
(Keep reading, we’ll show you some great examples that can save you from stepping on a mutual fund land mine...)
Our subscribers made a number of smart moves, and they have paid off—again.
Our Growth Portfolio was up 1,656% at the end of 2016. Even our lowest-risk Income Portfolio is up 750% since inception.
Investors who follow Dan Wiener & Jeff DeMaso are making more than DOUBLE THE PROFIT!
$100,000 grows to over a million!
If you started out with a $100K portfolio, as a subscriber to The Independent Adviser service, your money would have grown to $1,756,245. That’s more than double the profit the average Vanguard investor made!
Average Vanguard Investor
Dan and Jeff's Growth Model Portfolio
1990 Starting Value
Advantage: 179% Extra Profit: $1,126,753
And this is just the beginning.
Right now we’re buying great Vanguard funds that are poised to appreciate strongly in years to come.
If you’re new to my Independent Adviser service, let us explain just how we’ve been so successful investing primarily in Vanguard funds.
You’re about to learn how we pick the best funds and ETFs among Vanguard’s 170+ products. How we completely avoid making costly mistakes. And the best ways to avoid paying unnecessary income tax.
You will begin discovering secrets of Vanguard investing that separate the “average” Vanguard customer from more successful investors.
On average, subscribers make 50%—100% more in total returnsthan the average Vanguard investor.
Let’s help you get a lot more growth and income from your own fund portfolio. First, let’s look at TheIndependent Adviser’s four model portfolios…and they’re not just “models,” because I invest a lot of my own money in these funds!
Growth Portfolio: UP 1,656% since 1991 Our Growth Portfolio consistently beats the overall market over the years, but carries less risk than investing in the 500 Index! This combination of funds gives you wide diversification and includes some dividend income. What’s in it? Find out instantly—when you subscribe to TheIndependent Adviser.
Conservative Growth Portfolio: UP 1,112% since 1991 This portfolio is meant to match or beat the performance of the overall market, but with much less risk than investing in for example, Vanguard’s Total Stock Market Index. Excellent diversification and good monthly income.
Income Portfolio: UP 750% since 1991 Our Income Portfolio is designed for anyone who wants a high level of income and also opportunity for capital growth with very low risk—returns that consistently beat the Total Bond Market Index. Excellent for anyone who is retired or semi-retired.
Growth Index Portfolio: UP 631% since 1995 This is the perfect portfolio for anyone strongly interested in indexing. Since 1995, I’ve selected the very best index funds out of Vanguard’s dozens of choices, for maximum returns and diversification and minimal risk.
How we do it…
Needle in a Haystack: Vanguard alone has over 170 funds. Only 17 of these funds currently make it into our model portfolios.
How do we narrow the field down to Vanguard’s best of the best? We investigate the strength of each fund’s strategy: How sound are the underlying companies or bonds?
We measure each fund’s risk level in several precise ways—with a lot more accuracy than the simplistic risk bar graphs you see on Vanguard’s website.
Even among Vanguard’s index funds, there are born winners and repeat losers—and index funds that are poised to completely fall off a cliff…we’ll get to that in a moment. But first, you need to know one of my core principles of profitable investing:
Buy the manager, not the Fund
Over the last decade, more than 85% of large-cap actively managed funds underperformed the S&P 500 index. In other words, you could have just invested in the Vanguard 500 Index and called it a day, and you would have beaten the majority of Harvard-educated stock and bond pickers!
However, the top three best-performing funds in my model portfolios are NOT index funds, but are all ACTIVELY MANAGED Vanguard funds.
Why? Because Vanguard happens to have a few—just a few—superbly managed stock and bond funds.
Brilliant analysts who run a tight ship—I’ve known these managers personally for decades, and I often pick their brains in depth about what the future holds for the companies, bonds, and market sectors they invest in (I publish exclusive interviews with these superstar managers for your benefit in the monthly Independent Adviser newsletter).
The best of Vanguard’s managed funds can appreciate more in an upswing and lose less on a downswing. You won’t see this kind of profit with an index fund.
These long-term-winner funds, which you’ll find out about immediately as a new subscriber, are the #1 reason why our Growth Portfolio is up over 1,600%.
How we make 1,656% for subscribers…
Great insight. My subscribers and I make money the old fashioned way: We buy funds with proven management teams and winning strategies. We make adjustments as conditions change.
Well-informed guidance can make the difference between a pretty good return on your investments, and a stellar return.
For example, I had my eye on a certain Vanguard bond fund for years. This fund pays a great monthly dividend and was conservatively managed—lower risk than similar funds at other companies, such as Fidelity and T. Rowe Price.
But I didn’t say “buy.”I was patient—for years—and waited. Finally, all the numbers looked right. The yield spread was in our favor, by a wide margin, and economic indicators pointed to a period of relatively low risk for default with this kind of bond…
Valuable Vanguard SECRETS you’ll learn as a subscriber:
How to get into “closed” funds, plus better alternatives for these funds!
Which funds are better buys than Vanguard’s bond market indexes.
A safe place at Vanguard to make your spare cash really grow (definitely not a money market!)
The international funds that can boost your returns (don’t touch any others!)
So, when the time was right, I alerted subscribers we were going to SELL our whole position in GNMA, which had done well for us, and BUY the new bond fund. Within just one month our new acquisition was up over 5% (GNMA was flat). And in just one year, our new fund had returned 17.7%. Not too shabby, considering GNMA returned only 3.9% and Total Bond Market returned only 4.9%.
My buy and sell recommendations are few. But when an excellent opportunity emerges, I make sure subscribers are alerted while there’s still time to act…great opportunities at Vanguard don’t last long!
Smart diversification. Most people think “diversification” is a boring way to spread out risk. It is a great way to limit risk, if you do it correctly. And diversification is also a way to ensure higher returns—because with a well-diversified portfolio you will almost ALWAYS have something that is doing very, very well.
All four of our Model Portfolios are very well diversified.A good balance of large, medium and small cap companies. Growth and value. Domestic and some foreign. Stock funds, bond funds, broad indexes, and currently one “sector” fund that has done better than almost any other Vanguard fund over the last five years.
Excellent research pays off for Independent Adviser subscribers
The biggest difference between investing in funds on your own, and having TheIndependent Adviser on your side can be summed up in three words: research, knowledge, and foresight.
When I say “I buy the manager,” that means knowing the management of each fund inside-out. Their backgrounds, their track record, how they think, what they’re likely to do with the money they oversee. I have many lengthy, in-depth conversations with these fund managers.
I look over their shoulders. I scrutinize their work and ask them the right questions. So when I recommend that you “BUY” or “SELL,” you can be confident I’ve done the homework, that you’ll make money over time, not lose it. Some examples:
I said BUY International Explorer.
In October 2003, I gave this fund a place in my model portfolios. Why? Small foreign stocks were cheap on a relative basis compared to U.S. stocks, and had better growth potential, operating and selling their wares in faster-growing economies. And I knew the veteran manager, Matthew Dobbs and his brilliant team in London were among the world’s most savvy investors in small foreign companies: Super-smart hunters of grossly undervalued, small-cap firms with high growth potential. In May 2009, during the global recession, I even added to that stake.
Result: Our holdings in this small-cap international fund grew 57% overall. In 2011, I advised subscribers to take their sizable profits and reinvest them in another international fund with an even brighter future. UP 41%
I said SELL Growth Equity.
A popular large-cap and mid-cap growth fund. Sounds OK, right? Wrong! For years I warned subscribers to stay away from this fund, and I told new subscribers to sell it.
Reason: I knew the managers had a terrible track record. In 2008 alone, Growth Equity lost almost 48%. Yikes! The original management team was then fired by Vanguard. Everyone lost, EXCEPT subscribers to The Independent Adviser. DOWN 48%
I said BUY Health Care.
With the health insurance industry in upheaval, I wouldn’t invest in most health care funds. But I believe in Vanguard’s…because Ed Owens, America’s most astute analyst of the health care sector, spent 20 years mentoring this fund’s highly capable manager, Jean Hynes. Her team is terrific at digging up undervalued companies that have promising new technologies in the pipeline.
At the end of 2016, despite a tough 12 month stretch, Vanguard’s Health Care was up 238% since the bottom of the market. UP 238%
The Independent Adviser for Vanguard Investors will save you from risk, land mines, and costly mistakes…
One of the best ways to make money is to avoid losing it. As a subscriber to TheIndependent Adviser, we’ll coach you on exactly how to avoid the costly mistakes and land mines that can hurt anyone’s fund portfolio…anyone who doesn’t know better.
In our monthly Independent Adviser newsletter, weekly hotline, and special reports, you’ll learn…
Which of Vanguard’s most popular funds risk sinking a double- digit amount.
How to avoid a huge, unexpected tax bill on your investments.
When to buy the mutual fund and when to buy the ETF: Don’t get caught on the wrong side of the fence!
Why you should NOT have dividends and capital gains automatically reinvested.
Which big Vanguard funds are under-going management shake ups— and whether it’s safe to buy now.
How to not fall into the “false diversification trap” at Vanguard.
I’ll show you how to make money, even during volatile years…
There is almost always a safe place to make money, even when the markets are behaving like a roller coaster. That is, if you know where to look…
As a subscriber, I’ll keep you informed about those safe harbors—funds you probably wouldn’t have thought of investing in by yourself.
For example: During the terrible market crash of 2008–2009, money was pouring into U.S. Treasurys—which were paying almost nothing. I gave subscribers much better advice…
I recommended Short-Term Investment Grade, containing high-quality corporate bonds. The rest is history: While Short-Term Investment Grade bounced back almost immediately and was UP a very respectable 14% in 2009(superb for a safe, conservative bond fund!), the herd of non-subscribers who invested in Short-Term Treasury made a disappointing 1.4%. That’s correct, in 2009 we earned exactly TEN TIMES as much on this investment after the worst financial crisis in decades.
We believe that even a “growth” portfolio should generate a good amount of income for you to enjoy right now.
When to Index and When NOT to Index
This is one of your biggest recurring decisions as a Vanguard investor: Should I buy the index fund or the actively managed fund?
Every time we get to this crossroad, I will point you in the right direction. Deciding correctly can make a huge difference to your wealth over time. The main thing you need to know is that not all index funds are created equal. Some are seriously risky, others rock-solid.
Excellent Example: “Value” funds. You might be thinking about investing in say, the Value Index. That would have been a BIG mistake during the ten years that ended December 31, 2015.
Why? While the Value Index was up 108%, a smaller Vanguard fund with a similar name, Selected Value (until recently, one of my favorite actively-managed funds), was up MORE: 133%.
As a subscriber to my Independent Adviser service, you would have known to buy the less-familiar Selected Value, not Value Index. You would have made money, not lost a great opportunity.
You would have known that the Value Index was tracking an index that was weighted too heavily with risky financial stocks, especially REITs. And you would have known that Selected Value was actively managed by one of the best teams of value stock pickers in the business. Yes, Value Index did well but Selected Value did even better.
If for no other reason, you should subscribe to The Independent Adviser if you always want to be clear when to index and when there’s a much better choice.
HINT: My portfolio includes reliable, dividend-yielding stock funds as well as actively-managed bond funds paying a very healthy yield.
And I also tell you which Vanguard income funds to avoid like the plague! ESPECIALLY AS RATES RISE!
A Tale of Two Look-Alike Funds
One’s a superstar, the other’s a dog. Can you guess which is which?
Are you ever confused about which of Vanguard’s dozens of growth funds are best? Mind-boggled by Vanguard’s many income fund choices?
A lot of Vanguard’s funds have very similar names. It doesn’t help that Vanguard’s website describes them like identical twins. But watch out! They’re not!
Without The Independent Adviser service it’s very easy to choose the WRONG fund, a sure loser instead of an assured winner. But as a subscriber to my service, you’ll always know the winners from the losers.
Here are just a few examples of Vanguard’s “Puzzling Pairs”…
U.S. Growth vs. S&P 500 Growth ETF: One of these funds is Vanguard’s worst growth fund. Inept management that was fired, holdings I wouldn’t touch with a ten-foot pole. The other fund is featured in my Growth Index Portfolio. Find out which is the star and which is the dog as soon as you become a subscriber…
500 Index vs. Total Stock Market Index: These are Vanguard’s two most popular funds. But you shouldn’t buy one of them, and I tell you why in the 2017 Independent Guide, which you can get free of charge (regularly $79.95—see below).
Total International Index vs. International Growth: Surprise: Both of these funds are well-diversified…HOWEVER, one gives you rewards that are worth the risk. The other one will put you in harm’s way, with little upside potential. It’s very important that you know the difference.
SmallCap Index vs. MidCap Index: SmallCap, MidCap—how do you choose? Hint: Only one of these is in my model portfolios, and is a big driver of our success. The other fund I might buy in the future, but for now, it’s just too dangerous. The answer may surprise you! Find out…
Unlike other investment advisers, I eat my own cooking. Most of my personal fortune is invested in the same Vanguard funds I recommend in the Model Portfolios.
But that’s not all I own. Even though I believe Vanguard is the overall strongest, best-managed mutual fund company in the world, right now the single investment that’s making me the most money is NOT a Vanguard fund.
Yes, there are a few non-Vanguard funds that are far better than the closest match you’ll find at Vanguard. I own a lot of shares in them, and you’ll find out why in an upcoming issue of The Independent Adviser newsletter.
I’m looking forward to helping you become a wealthier, better-informed fund investor…
I hope I’ve proven that with mutual fund investing, it really pays to have an expert adviser on your side.
People who try The Independent Adviser service tend to stay for many, many years. That’s because they know the advice we provide has generated more wealth than they could have achieved on their own.
My subscribers tell me they like knowing they’re invested in the funds with the strongest management teams. This is very difficult to figure out on your own. It’s my specialty as an independent investigator.
My subscribers also enjoy peace of mind knowing they’ve avoided investing a single penny in loser funds…even if some of those funds are “wildly popular” now…because the trendy funds of today can be in serious trouble tomorrow. My subscribers aren’t willing to follow the herd and gamble with their hard-earned money—they want to know what’s probably going to happen—in advance.
I’m inviting you to join us…
Join us today at the low price of $99.95 – that $129 off the regular price of $229. As soon as you get your first issue of The Independent Adviser newsletter, you will discover important inside information about the funds you already own, or may be thinking about.
You’ll immediately find out which funds to definitely go ahead and buy, and which you should turn and run from, and exactly why. You will be very surprised to learn which are which.
The Independent Adviser Gives You World-Class Resources at Your Fingertips
Subscribe to The Independent Adviser and you'll receive:
The monthly Independent Adviser newsletter, including our latest model portfolio picks, buy/sell/hold advice for every Vanguard fund and ETF, exclusive fund manager interviews, in-depth articles on key investing subjects, and much, much more.
Access to the FULL archives—and the ability to easily look up anything written about any Vanguard fund or investing subject you care about.
Our exclusive weekly Hotline, filling you in about how this week’s news can affect your investments, and any immediate actions we recommend you take.
You can us your questions about Vanguard and its funds—don’t be surprised if we publish an article about the subject in the next newsletter, thanks to you!
And many more resources that will help you achieve more than DOUBLE the profits of the average Vanguard investor!
Along with your subscription to The Independent Adviser, we'll also send you 3 special reports FREE…
FREE Gift #1
Vanguard’s Best & Worst Funds for 2017
Discover Vanguard’s best-managed funds, most likely to deliver handsome profits this year and beyond…and be warned in advance about Vanguard’s ugliest ducklings—shockingly, some are Vanguard’s most popular funds and are set to fall off a cliff!
FREE Gift #2
Greater INDEX Investing Profits
The key to making money consistently with index funds is knowing which are the best and which you should absolutely avoid…including many of Vanguard’s largest index funds. This report reveals the secrets to profitable index fund investing, including what you need to know about how funds and ETFs differ.
FREE Gift #3:
Money-Making SECRETS Vanguard Will Never Tell You!
Discover the many secrets that can greatly increase your profits. From how to get into a “closed” fund, to clever ways for maximizing your retirement income—and much more!
Yours Free When You Respond Within 24 Hours:
AVOID Vanguard Investing Mistakes
This guide can save you thousands—maybe millions! How to avoid paying unnecessary taxes. How to know if “false diversification” has turned your portfolio into a ticking time-bomb. And many more alerts so you avoid stepping on investing land mines!
Try The Independent Adviser and receive the Ultimate Guide to EVERY Vanguard fund!
When you join The Independent Adviser for two years we’ll also send you The 2017 Independent Guide to the Vanguard Funds FREE (regularly $79.95).
The inside scoop about every Vanguard mutual fund, ETF, and annuity you own or are thinking about owning.
Detailed explanation of why you should or shouldn’t own a fund.
Much more helpful chartson performance than Vanguard’s website gives you!
Great tools for ensuring excellent diversification of your portfolio.
Much more accurate risk analysis than Vanguard gives you for every single fund and ETF.
Smart predictions of where each fund is heading—up, down or sideways.
The low-down about every fund’s management team.
Fund or ETF? Everything you need to know so you make the right decision.
And much, much more in this must-have, 300 page book!
In the special reports we’ll send you (that you can access immediately online), you’ll learn all the important secrets to making more money with Vanguard and other companies’ funds. Smart ways to reduce your tax burden. And how to enjoy a larger income from your investments—with lower risk.
Our 100% Satisfaction Guarantee
Let me reassure you, you will make and save more money with The Independent Adviser, or it's FREE. Take six months – 180 days – to try my Independent Adviser service with no obligation at all. See what's in our four model portfolios, compare the funds I recommend to the funds you own.
If you change your mind for ANY REASON within six months, you'll promptly get a 100%, full money-back refund (after six months you'll get a pro-rated refund). PLUS you keep all the reports and books, (worth $172) FREE!
You have nothing to lose! There is so much more I will share with you about successful fund investing. I hope to hear from you soon!
Wishing you a prosperous investing future,
Daniel P. Wiener, Editor, The Independent Adviser for Vanguard Investors
P.S. Your free copy of the 2017 Independent Guide to the Vanguard Funds is worth $79.95. You’ll find this 300 page book incredibly valuable.
P.P.S. Respond within the next 24 hours and you'll receive immediate access to another report FREE –AVOID Vanguard Investing Mistakes.
A PUBLICATION OF FUND FAMILY SHAREHOLDER ASSOCIATION. This publication, FFSA, and The Independent Adviser for Vanguard Investors are completely independent of The Vanguard Group, Inc.
MANAGE YOUR INVESTORPLACE ACCOUNT:
We hope this timely investing advice is valuable to you. As you know the markets move fast and conditions change frequently. So please check the current issue for the most recent advice.