(PUB) Investing 2015

ings and putting the money away in a Roth IRA, the now married 30-year-old has already built up a tidy sum that will continue to grow for many years to come. It won’t pay for a nursing home just yet, but then again, he’s got a few years before that becomes an issue. And he’s learned the value of early and long- term investing and compounding. With a good job, he’s already saving outside >

spend what they make, and then some. That’s one reason I believe parents (and grandparents) were invented. When I first opened an IRA for my then-teenaged son, both he and my wife looked at me like I’d just announced my intention to run for President. My daugh- ter just smiled and kept reading her book. The joke is on them, of course. Thanks to me matching my son’s summer earn-

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they’re probably more interested in watching paint dry or grass grow. But that shouldn’t stop you from try- ing to pique their interest in the basics of personal finance, and yes, even per- sonal financial responsibility. A couple of years ago, I helped a number of 25-year-old friends of my daughter with some fundamental financial and investment planning. They needed it; they knew they needed it; and they were very appreciative of the help. In fact, one of them wrote a blog post about it, then went on to put her money to work for her future. I’ve been asked by more of these 20-somethings to do it again, and to broaden the audience. It’s too bad more people don’t help the young get started early on their investment careers, because the perfect time to learn about saving and investing is when your portfolio is small enough that your mistakes won’t kill you. Also, it’s a time when a new investor can begin to develop lifelong habits that will stand them in good stead as they pass through their 30s, 40s and beyond. Time is on a kid’s side, and by help- ing them start to build a Roth IRA with earnings from summer and part-time jobs, you may be able to make a mean- ingful impression on him or her. Then, next March and April, you can tote up what Mr. or Ms. Millennial earned in 2015 and fund that IRA account before the April 15 deadline. I know that it would be nice if junior spenders could take on this chore them- selves, but how many teens do you know who read investment newsletters? And if they did, where would they get the money to stash in an IRA? Most

MODEL PORTFOLIOS Moving More Overseas

AS RECOMMENDED in the Mar. 19 Hotline , we added to our holdings in foreign equities by selling a small portion of our U.S. equity assets. We’ve been discussing this trade for some time, and my feeling was that with the dollar as strong as it is now, this was as opportune a moment as any to take a few of those dollars off the table here and use them to buy better- valued stocks denominated in weaker, non-dollar currencies. To that end, on Friday, Mar. 20 in the Growth Model Portfolio , we sold one-fifth of our shares in S&P MidCap 400 Growth ETF at $106.57 and one-fifth of our shares in Selected Value at $29.17. Now, because it often takes three days to settle ETF trades, I waited until all the proceeds were in and added to International Growth at $23.09, its closing price on Tuesday, Mar. 24. This brought our allocation to International Growth to 12% from 3%. To try to match those trades in the Growth Index Model Portfolio , we sold one-sixth of our shares in S&P MidCap 400 Growth ETF at $106.57 as well as one-sixth of our shares in S&P MidCap 400 Value ETF at $100.06 and, again, because of settlement times, I used the proceeds to add to Total International Stock ETF at its $51.59 closing price on Tuesday, Mar. 24, likewise bringing that fund’s allocation up to about 12% from 3%. In the Conservative Growth Model Portfolio we sold one-fifth of our shares in S&P MidCap 400 ETF at $103.55 and added the proceeds to International Growth on Tuesday at $23.09, bringing our allocation from about 6% to around 9%. Finally, in the Income Model Portfolio , we sold half of our shares in MidCap Index at $35.55 and used the proceeds to purchase more shares of International Growth at its Friday price of $23.06, bringing that allocation up to about 6% from 4%. Again, in pricing trades in the Model Portfolios I am acting like the investor I am, rather than ignoring the settlement times that some investment advisers might. In the cases I’ve cited, we paid slightly higher prices waiting three days, but the impact was fractional and should make absolutely no difference in our long-term returns. As noted in the Hotline , this is the first trade recommended in any of our Model Portfolios since August 2013. Our strategy is to buy and hold a diversified selection of funds for the long term, and quite frankly, it seems to be working just fine.

Daniel P. Wiener - Senior Editor Jeffrey D. DeMaso - Editor/Research Director Seth H. Kennedy - Assistant Editor Amy Long - Vice President and Publisher Billy Currano - Senior Managing Editor David Clarfield - Assistant Managing Editor Rachel Johnsen - Editorial Assistant Louisa Dorado - Marketing Director Mary Southard - Marketing Director John Hall Design Group - Design and Production Fund Family Shareholder Association Member, Newsletter Publishers Association Daniel P. Wiener - Chairman James H. Lowell - President (www.FidelityInvestor.com)

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The Independent Adviser for Vanguard Investors • April 2015 • 3

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