(PUB) Investing 2016

across the markets. Energy fell 21.5% in 2015, and Energy ETF tumbled 23.2%. Over the past three years, cumulative returns are -20.5% and -13.0%, respectively, which is at least one reason there’s so much talk >

year ago. As the old saying goes, even a stopped clock is right twice a day. Eventually, the energy believers will be able to say, “I told you so.” But that doesn’t mean you and I need to make a bet on the sector. I’d rather leave the

of a big rebound. And it could come, given that oversupply has been ratch- eted down substantially. But be very careful—many of those who are beating the (oil) drum for energy are the same people who were also energy bulls a

LOOKING BACK

2015 Year in Review THE MARKETS WERE VOLATILE, and yet they ended 2015 with little to show for it. Meantime there were plenty of goings-on around the globe and in Vanguard’s offices, and there was plenty to show for that. Here’s a bit of a rundown on how the year proceeded. JANUARY: Vanguard registers to offer Tax-Exempt Bond Index , its first muni-bond index fund and ETF, almost five years to the day after originally filing to offer three muni index funds…A terrorist attack on satirical magazine Charlie Hebdo ’s Paris editorial offices sets off global condemnation…Oil’s price drops below $50 per barrel…The Swiss National Bank removes its cap on the euro/Swiss-franc currency relationship, and the franc soars while the Swiss market tumbles…The European Central Bank (ECB) announces a bond purchasing program to jumpstart stagnant euro-zone economies and fend off deflation. The plan is to buy 60 billion euros ($69 billion) worth of bonds a month starting in March through at least September 2016…Vanguard opens Explorer Value and Emerging Markets Select Stock to all investors…Greek anti-austerity party Syriza takes power, leading investors to question whether Greece will continue to pay its debts…TOP FUND: Extended Duration Treasury ETF , 14.2%. WORST: Financials ETF , -5.5%. FEBRUARY: Ultra-Short-Term Bond opens its doors and begins investing shareholder money after a 10-day subscription period…Jobs numbers continue to point to a U.S. economy in expansion…Greece reaches a temporary four-month plan with other euro-zone countries that buys everyone time to work out a long-term Greek financing deal…The FTSE 100 (essentially the U.K.’s S&P 500 index) reaches a new high for the first time since 12/30/1999…Vanguard files for an Institutional Target Retirement series of funds and an Alternative Strategies fund that is primarily intended for use by Managed Payout …For the Target Retirement and STAR Lifestrategy funds, Vanguard boosts the foreign stock exposure to 40% of equity assets and increases the foreign bond allocation to 30% of bond assets…Without notice from Vanguard, Ed Antoian of Chartwell drops off of both Explorer and MidCap Growth . He leaves his co-manager, John Heffern, to handle Chartwell’s portion of each fund solo…NOAA data shows February 2015 to be the coldest February since 1979…TOP FUND: Information Technology ETF , 8.3%. WORST: Extended Duration Treasury ETF , -9.1%. MARCH: The NASDAQ crosses 5000 for the first time since March 2000—though it doesn’t yet reach a new high mark…Vanguard announces that a number of index funds will move from annual to quarterly dividend distributions starting in the third quarter…Apple

replaces AT&T in the Dow Jones Industrial Average…The ECB starts its 19-month-long, 1-trillion-euro bond buying (quantitative easing) program…Vanguard revamps its “personal investor” website…Heinz, owned by Berkshire Hathaway and 3G Capital (a Brazilian private equity group), announces a merger with Kraft Foods to create one of the largest food and beverage companies in the world…TOP FUND: Health Care , 2.5%. WORST: Precious Metals & Mining , -9.1%. APRIL: Former Federal Reserve Chairman Ben Bernanke announces he will become a senior adviser to both Chicago hedge fund Citadel and bond shop PIMCO rather than return to academia or take a position at a bank…After 15 long years, the NASDAQ surpasses the high set during the tech market’s March 2000 bubble peak. In the same week, Japan’s Nikkei index also hits a 15-year high as it crosses 20000…Vanguard delays the launch of its Tax-Exempt Bond Index fund and ETF until May…TOP FUND: Energy , 10.4%. WORST: REIT Index , -5.9%. MAY: Vanguard enters the robo-adviser space by broadening the availability of Personal Advisor Services with a lowered investment minimum of $50,000…Federal Reserve Chair Janet Yellen describes stock valuations as “quite high”…“Sell in May” takes a backseat to new records for the Dow, the S&P 500 and the NASDAQ…Vanguard postpones the launch of Tax-Exempt Bond Index yet again…Six of the largest banks pay $5.8 billion in fines as five of them plead guilty to currency-rigging…Vanguard also enters the “liquid alternatives” fund space, an area it has often critiqued as inappropriate for most individu- als, with the launch of Alternative Strategies …The U.S. removes Cuba from its “state sponsors of terror” list…TOP FUND: Health Care ETF , 5.3%. WORST: Energy , -6.3%. JUNE: The Greek debt drama dominates headlines throughout June as Greece defers a payment to the IMF; summits are held, and ultimately no deal is reached. At the end of June, Greece closes its banks and stock mar- ket, and the country becomes the first to default on an IMF loan… Prime Money Market ’s yield moves above 0.01% for the first time in nearly two years…Vanguard announces changes to benchmark indexes for four international stock index funds: Developed Markets Index , European Index , Pacific Index and Emerging Markets Stock Index . The moves add small-caps to all portfolios, Canadian stocks to Developed Markets Index and Chinese A-Share stocks to Emerging Markets Stock Index…In response to new money market regulations, Vanguard reopens Federal Money Market and announces that Admiral Treasury Money Market will lose its Admiral status, while the Institutional shares of Prime Money Market will become Admiral shares…Tragedy strikes at Emanuel African Methodist Episcopal Church in Charleston in a mass shooting…Once

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