(PUB) Investing 2016

Dividend Appreciation Index , which lost 2.0%. For that matter, the team at PRIMECAP Management has done well with long-term bets on the oil sec- tor over the years. You’re also going to be hearing

investing to brilliant managers like Don Kilbride at Dividend Growth , who, despite a large overweight to the energy sector, was able to generate a total return of 2.7% in 2015, outpacing the market and his index fund competitor,

more and more about gold, since its proponents believe not only that the shiny metal protects against inflation (it doesn’t) and is a store of value (it

SEE OUTLOOK PAGE 12

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again, Vanguard files with the SEC for exemptive relief to offer ETF shares of its actively managed funds…The Supreme Court legalizes same-sex marriage across the country and again upholds provisions in Obamacare… TOP FUND: S&P SmallCap 600 Growth ETF , 1.5%. WORST: Precious Metals & Mining , -8.7%. JULY: Greece votes overwhelmingly against IMF proposals and austerity, pushing the country one step closer to leaving the euro… The NYSE halts trading for nearly four hours due to a computer glitch… China’s government, in an effort to stem panic selling, bans major stock- holders from selling shares for six months…Greece receives its third bailout in five years, though the terms are even more stringent than the ones it voted against…Jobless claims hit their lowest level since 1973…Chinese stocks decline 8.5% in a single day, the biggest daily decline since 2007…TOP FUND: Extended Duration Treasury ETF , 7.0%. WORST: Precious Metals & Mining , -16.2%. AUGUST: A Puerto Rican agency defaults on bonds for the first time, paying just $628,000 on $58 million that was due…IMF delays giving the Chinese yuan reserve currency status for at least a year, silenc- ing shrill warnings of a looming dollar collapse…After multiple delays, Vanguard finally launches Tax-Exempt Bond Index …China devalues its currency, the yuan, by 4% or so versus the dollar, sending ripples across global markets…A Vanguard insider calls out the mutual fund giant in a whistleblower tip for lax cybersecurity practices…Vanguard launches Alternative Strategies fund, but unless you are an institu- tional client of Vanguard, the only way to access the new fund will be through Managed Payout …On Aug. 24, the Dow opens a whopping 1,000 points below its prior close, but recoups half those loses by the end of the day. The S&P 500 index falls into correction territory (down 10% or more from the prior high) for the first time in about four years… Second-quarter GDP’s growth rate is revised up to 3.7% from 2.3%… Federal Money Market joins Prime Money Market in yielding more than 0.01%…TOP FUND: Ohio Long-Term Tax-Exempt , 0.5%. WORST: Emerging Markets Select Stock , -9.5%. SEPTEMBER: Oil falls below $40 a barrel for the first time since 2009…Vanguard changes its frequent trading policy to 30 days from 60 days, making it easier for shareholders to book tax losses… In a much-hyped meeting, the Fed leaves interest rates unchanged… Presidential hopeful Hillary Clinton tweets about a plan to regulate drug pricing, sparking a sell-off in biotech stocks…Vanguard files with the SEC to launch two new foreign index funds, International Dividend Appreciation Index and International High Dividend Yield Index …A prominent tax attorney says Vanguard could be liable for $34.6 billion in back taxes and penalties if a whistleblower’s accusations prove valid…Corporate raider Carl Icahn releases a video warning of an approaching crisis, but provides little in the way of solutions…At the

eleventh hour, Congress passes a stopgap spending bill to keep the gov- ernment open until December 11…TOP FUND: Market Neutral , 5.0%. WORST: Materials ETF , -7.8%. OCTOBER: Vanguard announces Jim Barrow will retire from his duties at Windsor II and Diversified Value Annuity at the end of the year… European Index and Pacific Index transition to the new index- es that were announced in June, adding small-cap stocks to their port- folios…China abandons its one-child policy in the face of demographic imperatives…In a first, the U.S. Treasury sells $21 billion of 3-month bills at a 0.0% yield to overwhelming demand…Money market yields continue rising slightly, with Prime Money Market up to 0.08%…The Fed gives its clearest signal yet that a rate hike is coming in December… Vanguard puts the Health Care team on a performance incentive plan, the first ever for the fund’s managers…TOP FUND: Materials ETF , 12.9%. WORST: Intermediate-Term Government Bond ETF , -0.6%. NOVEMBER: Emerging Markets Stock Index begins its transi- tion to the all-inclusive FTSE Emerging Markets All Cap China A Inclusion index…Jack Bogle tells the Philadelphia Inquirer that his market predic- tions in the press are simply “casual” comments and that only his aca- demic papers’ predictions should be considered serious…Chinese con- sumers spend over $14 billion through Alibaba (the e-commerce giant) on “Singles Day”…Tragedy hits Paris on Friday, Nov. 13, as terrorists strike multiple targets in a coordinated attack, killing more than 120 people and wounding hundreds more. ISIS claims responsibility for the massacres… The IMF approves letting the Chinese yuan join the dollar, yen, euro and pound as a reserve currency. The change will take effect in 2016… Marriott buys Starwood in a $12 billion deal to create the largest hotelier in the world, and Pfizer, in an inversion that will make it an Irish company, inks a $160 billion merger deal with Allergan…Turkey downs a Russian fighter jet near the Syrian border… Energy ’s Karl Bandtel and Long- Term Investment-Grade ’s Lucius Hill both announce they will retire in June 2016……TOP FUND: Russell 2000 Growth ETF , 3.7%. WORST: Precious Metals & Mining , -9.6%. DECEMBER: Vanguard delays the launch of two new foreign stock index funds, International Dividend Appreciation Index and International High Dividend Yield Index , until 2016…Less than a week after a shooting in Colorado, two shooters kill 14 people in San Bernardino, California…Two new active funds, Core Bond and Emerging Markets Bond , are proposed for 2016 release, though the EM fund may be kept from the public for a bit…The Fed ends its ZIRP (zero interest rate policy) with a 0.25% increase in the fed funds rate, seven years to the day after it last cut rates…Donald Trump and Ted Cruz lead the GOP field as we head into an embattled primary season…Investors suffer glitches as they combine brokerage and fund accounts at Vanguard’s request…TOP FUND: Consumer Staples ETF , 2.2%. WORST: Energy ETF , -11.1%.

The Independent Adviser for Vanguard Investors • January 2016 • 7

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