Vanguard Blog

Turning thought into action

Ellen Rinaldi — Thu, 18 Mar 2010 16:11:08 +0000

I had the chance to listen to Dan Heath recently. He’s the coauthor, with his brother Chip, of Switch, a new book about making changes. I’d read their last book, Made to Stick, and thought their conclusions were valuable, so I was looking forward to Dan’s talk. As I considered the factors he said kept people [...]

Rating your 401(k)

Steve Utkus — Mon, 15 Mar 2010 13:03:00 +0000

401(k) accounts are typically among the largest assets held by middle- and upper-middle-income households in the United States. So naturally they draw a lot of attention—in the marketplace, in the media, and in Washington. The government, for example, is proposing new rules on reporting fees and promoting impartiality in investment advice. Meanwhile, in the marketplace, a [...]

A modest proposal

John Ameriks — Wed, 10 Mar 2010 15:07:15 +0000

Given all the back and forth in Washington these days, with policy meetings and dramatic proposals to revolutionize retirement, I’ve got retirement-income solutions on the brain. So here’s a modest proposal for providing “Retirement Income Security for All.” The U.S. Treasury could create, and sell at auction, a new set of transferrable debt securities that obligate [...]

Is saving really saving?

Ellen Rinaldi — Tue, 02 Mar 2010 13:09:15 +0000

I’ve been watching the U.S. consumer savings rate climb. It’s been heartening to witness the ascent past 5% on its way to perhaps 7%. Any way you look at it, this is a welcome—if not critical—change in our financial/economic behavior. I started digging into how this rate is computed and asked a few of our resident [...]

The graying budget

Steve Utkus — Wed, 24 Feb 2010 15:06:46 +0000

Several years ago at a speech in New York, I warned that “a future President Clinton or McCain would face a daunting budget challenge from population aging.” My political forecast was off, but my economic and demographic forecast is unchanged. It is a well-known demographic fact that societies around the world are aging. It is not [...]

Putting your mortgage in reverse

Ellen Rinaldi — Tue, 16 Feb 2010 13:58:48 +0000

I occasionally participate in webcasts, taking questions from Vanguard investors on various financial topics. Almost invariably, someone asks about reverse mortgages. Should they or shouldn’t they? How do they work? And are they legitimate? Last question first: Yes, reverse mortgages are legitimate, and they seem to be gaining in popularity. But it’s clear that as with [...]

Nervous markets

Steve Utkus — Fri, 12 Feb 2010 13:09:13 +0000

In recent weeks, stocks have sold off from their recent highs. It appears that the enthusiasm that drove equity markets higher since last March may have run its course. I’ll stick out my neck, and pronounce an end to the ‘07–’10 market cycle. This was a market cycle that began with a peak in global stock [...]

Musings of a pack rat

Craig Stock — Tue, 09 Feb 2010 13:22:34 +0000

I am a pack rat. A long habit of cutting articles from newspapers and magazines has left me with several boxes of clippings, only some of which have been sorted into files. On a clean-up crusade, I’ve spent more than a few hours going through the pile, looking to pluck only a few particularly interesting needles [...]

The art of the perfect password

Ellen Rinaldi — Thu, 04 Feb 2010 15:53:36 +0000

Anytime I forget something, I rationalize that what I’m really doing is clearing out space to allow new information to be stored in my brain. It’s a bit like cleaning off my desk or deleting cookies from my computer. The most irritating forgetfulness is when I can’t remember that “perfect” password I set up for a [...]

Another take on “A tale of two investors”

John Ameriks — Tue, 02 Feb 2010 15:37:12 +0000

A few readers had some strong reactions* to my recent post on the benefits of making investment purchases at the beginning of the year, as opposed to waiting until year-end. Some folks doubted my premise. Others questioned my math. And some thought the whole post was laughably basic. Well, I agree that the post is about [...]

Interest rates: a worry for 2010

Steve Utkus — Fri, 29 Jan 2010 13:06:12 +0000

It’s still early in the new year, and there’s lots to worry about in the investment domain and in the broader world. But one item tops my “worry list” for 2010: interest rates. And it’s hard to decide which is the greater worry—the status quo, or a change in it. The status quo for rates is [...]

A tale of two investors

John Ameriks — Mon, 25 Jan 2010 12:12:30 +0000

Here’s a pretty simple chart showing hypothetical investment results for two hypothetical investors. Each of them saved $2,500 a year for 25 years, using investment strategies that delivered identical 7% rates of return each year. After 25 years, one investor ended up ahead of the other by more than $11,000. Can you guess why? Data source: [...]

The estate tax is dead … or is it?

Ellen Rinaldi — Wed, 20 Jan 2010 12:55:21 +0000

The federal tax on transfers of wealth from estates has been with us since the passage of the Revenue Act of 1916, although there were similar temporary levies around the time of the Spanish-American War. This tax came to an end, albeit temporarily, on December 31, 2009. How did this happen? In 2001, Congress passed legislation [...]