There’s a good reason why regulators require financial firms to include, when mentioning the past returns or ratings of a mutual fund, the warning: “Past performance is not a guarantee of future results.”
The warning is true. History is an imperfect guide to the future, or historians would be fabulously wealthy investment sages.
But history does seem, if not to repeat, to rhyme from time to time. Read more »
In response to my most recent post, “Give ‘thoughtomation’ a try,” I received this helpful idea from a reader:
“Why don’t you post a spreadsheet with comparisons of saving early vs saving late in life? That is the most important thing young investors need to see.”
I recently attended the Pennsylvania Conference for Women with a group of Vanguard colleagues. The conference featured an impressive array of speakers who focused on a broad range of personal and professional development topics for women. Sessions were offered on building a small business, leveraging social media, cultivating mentor relationships, and seemingly everything in between. But given that I work in the financial services industry, and that my area of focus at Vanguard is investment advice, I was most interested in the breakout session led by money coach Farnoosh Torabi, author of Psych Yourself Rich.
My recent comments about the performance of retirement accounts elicited a wave of comments from Vanguard investors about poor stock market returns. Here are a few thoughts in response.
A popular question from my friends is “Where do I go for income in this low-yield environment?” There isn’t an easy answer.
Here’s why: Yields on money market funds are near 0%, and long-term Treasury bond funds are yielding below 3%. Vanguard’s Total Bond Market Index Fund is currently yielding 2.4%*, as of November 3, 2011. And for muni bond investors, our Vanguard Intermediate-Term Tax-Exempt Fund has an SEC yield of 2.55%* as of November 3, 2011, based on its current holdings.
