(PUB) Investing 2015

multinationals, the dollar’s strength will have impinged on their ability to generate profit growth. In addition, many of those same top-dog multinationals are oil companies, and you know what’s happened to the price of oil. That isn’t going to help earnings, either. Add in a touch of winter weather, which from all reports seemed to hit the economy particularly hard in February, and you’ve got all the makings for an excuse-laden reporting season. Instead of focusing on results over the months just past, corpo- rate managers’ projections will provide better clues about what lies ahead. But also remember that you and I don’t buy the index, and hence, we aren’t nec- essarily buying shares of companies that are mired in mediocrity. Managers like Donald Kilbridge at Dividend Growth , the team at PRIMECAP Management, and Mark Giambrone and Jim Barrow at Selected Value are making choices about where they put our money, rather than simply buying the entire market. That’s been a winning formula for us for years. On another front, if by some chance you own U.S. Growth or its annuity counterpart, Growth Annuity (funds that I do not recommend and I hope you sold off long ago), then you own a piece of the massively valued, overhyped and controversial ride-sharing com- >

pany, Uber Technologies. Wellington Management’s Andrew Shilling bought some $20 million in Uber in U.S. Growth during the latter half of 2014. Given the fact that the company’s valua- tion jumped from $17 billion to $40 bil- lion when it raised money in December, that Uber position has now grown to $46.9 million at year-end, making Uber the fund’s 36th largest holding—on par, for instance, with positions in Electronic Arts and Kinder Morgan, and larger than Lowe’s, Yelp or Salesforce. U.S. Growth owns other non-public tech companies including WeWork and Cloudera. While these tech high-flyers could pay off if valuations keep rising, there’s also a strong chance the companies soar at their initial public offerings and then dive before early investors have the right to sell. U.S. Growth is one of the funds Vanguard used to use as a go-to for the active component of its 401(k) plan offerings. Today, it doesn’t even get the “Select” label. Speaking of launches, Vanguard’s new Tax-Exempt Bond Index and its ETF shares should launch around April 20. I wouldn’t buy it right away, but would let assets accumulate first. Plus, with a 0.50% front-end load, it will be the ETF share class that will gather the bulk of this fund’s assets. n

The Ultimate Fund Guide

25th Anniversary Edition!

WITHOUT TURNING ON A COMPUTER, without even looking up a telephone number, you can have at your fingertips all the data on your favorite Vanguard funds—with the new FFSA 2015 Independent Guide to the Vanguard Funds . This year, the 25th Anniversy Edition, we have more data than ever, plus new Vanguard funds, updated risk analysis, top holdings, etc. Even with our huge computer files and access to fund managers, Research Director Jeff DeMaso and I still find ourselves thumbing through the annual guide to find that quick statistic, a current redemption fee number, or even a total return figure for 2005. Best of all, the 2015 Guide is available both in print and online, with a user-friendly inter- face for easier reading, searching and quick- reference access to the glossary, index, and table of contents. My 2015 Guide is a great resource for me, and for you. Call Customer Service at 800/211-7641 for all the details on how to purchase the guide.

DAN’S DO-IT-NOW ACTION RECOMMENDATIONS 4 Saving early for retirement is just common sense to most adults. But parents and grandparents can also give their teens an investing lesson and a retirement head start. (See page 1) 4 Our flight to safety instinct is strong, but stick with long-term winners like Dividend Growth and Health Care . (See page 12) 4 U.S. stocks and the dollar have outpaced their foreign peers for the past several years—that’s why now is an opportune time to boost our foreign stock holdings. (See page 3)

Daniel P. Wiener is America’s leading expert on the Vanguard family of funds. He is founder of the Fund Family Shareholder Association and chairman and chief executive officer of Adviser Investments, LLC, a Newton, Massachusetts, investment advisory firm (800-492-6868). As

Jeffrey D. DeMaso, Editor/Director of Research, works directly with Dan Wiener researching and writing the multiple-award winning Independent Adviser for Vanguard Investors newsletter. He also leads the analyst team for Adviser Investments, LLC. Jeff gradu-

editor of The Independent Adviser for Vanguard Investors , he is a five-time recipient of the Newsletter Publishers Foundation’s Editorial Excellence Award. He also edits the annual Independent Guide to the Vanguard Funds. Mr. Wiener is often quoted in the nation’s leading financial publications.

ated magna cum laude from Tufts University with a B.A. in economics, holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the Boston Security Analysts Society.

16 • Fund Family Shareholder Association

www.adviseronline.com