My Comments: Readers of my blog posts know at least two things: (1) I’ve been expecting a significant downturn for longer than I can remember and (2) I like Vanguard Funds. I have much of my money there, to some extent because of their insanely low fees compared with what I lived with for most of my 42 years in the money business.
The economic consensus is that a downturn is really coming, though at this point whether it’s tomorrow or 3 years from now is anyone’s guess. That being said, this article explains the logic behind the idea and offers reasons why two of Vanguards funds should be considered.
The article below is very long, has many charts, and is not an easy read. If you are so inclined, there is a link to it at the bottom. Have fun…
Also, please understand that I no longer charge anyone for investment advice and am offering this because I can and because many people out there are going to get hammered when the inevitable happens. (BTW, I cannot find the name of the author below so please forgive me for not providing proper attribution.)
Sep. 24, 2018
The stock market has sailed to record gains of more than 400% since the 2007-2009 financial crisis, and investors who didn’t abandon ship have weathered the storm and are now likely in terrific financial shape. However, as the market waters have risen to new heights, investors flush with unrealized gains may be looking to navigate toward calmer seas during the next crisis. In this article, I take a thorough look at two actively managed, balanced mutual funds from Vanguard that provide capital appreciation as well as income from stock dividends and bond distributions, and that also provide a level of capital preservation during periods of market turbulence. The data below reveal how adding these funds can help buoy your hard-fought portfolio from sinking to the next market bottom.
Riding the Current Bull Market Tailwinds
For investors who have witnessed their portfolio value rise dramatically as we have officially entered the second-longest bull market in history, it may be difficult to remember the dread and angst that was felt by many as the S&P 500 index lost 56.8% of its value from Oct 9, 2007 to the market bottom on March 9, 2009. Since then the S&P 500 share price has more than quadrupled, rising 329.3% as of Sept. 18, 2018 and is currently trading near its all-time high. When factoring in reinvested dividends, the S&P 500 has done even better, generating total returns of 424.4%.
Helping You Prepare Your Financial Future 