(PUB) Investing 2016

Lowell, editor of Fidelity Investor , www.FidelityInvestor.com, supplied me with this information.) And remember what I said at the start: The MSCI Information Technology index, upon which Vanguard has based its Information Technology Index fund and ETF, has only a bit better than a 40% record of beating the stock mar- ket over the four-month Tech Winter period. True to form, over the past 10 Tech Winters , the technology index has outperformed just four times. So it’s not a sure thing, but giving active manag- ers a hand in making technology stock choices increases the odds in your favor. Weighing the Options Whenever I speak about this phe- nomenon, I always say that I don’t rec- ommend investors make major portfo- lio or investment decisions based upon short-term trends, such as those we see during Tech Winter . Should you want to both own great funds run by great managers, and try to make a bet on a good tech sea- son, my favorite choices remain the PRIMECAP Management-run funds: Capital Opportunity, PRIMECAP and PRIMECAP Core . The funds’ tech- nology weights stood at 34.0%, 36.8% >

and 30.1%, respectively, at quarter-end. Obviously, with all of these funds closed to new investors, I recommend you get yourself some shares in PRIMECAP Odyssey Growth (POGRX) before it closes as well. Would I bet on other tech-heavy active funds in the Vanguard firma- ment? Nope. Despite heavy tech hold- ings ranging from 26.2% to 38.5% of assets at Explorer, Morgan Growth and U.S. Growth , their multimanager amalgams don’t make them particularly attractive over the long haul. (Though as I said last year, the newest manage- ment iteration at U.S. Growth seems to be working.) They may outperform during Tech Winter , but who’d want to own them for longer than that? My goal this Tech Winter remains consistent with my philosophy as a long- term investor: To stick with the disci- plined strategy for long-term growth that I employ in my Model Portfolios and take any short-term gains or losses in stride. We can’t count on a predictable gain every winter, but we can count on solid management and proven results, which is why I like the PRIMECAP-run options. And if we get a bit of a tailwind over the next four months, then all the better for us. For you traders, have a ball! n

Analyze This

When I started this newsletter in 1991, I had to thumb through paper SEC filings and copy fund data by hand. But now, thanks to advances in technology and the efforts of our team at InvestorPlace, Jeff and I are able to bring you an unprecedented research tool for Vanguard investors: The Independent Vanguard Fund Analyze r. The Fund Analyzer takes everything you know from our monthly newsletter and annual guide- book to a whole new level. Like our guidebook, it contains comprehensive data on every Vanguard fund we track. And like our newsletter, it’s updated every month. (Some data is even updated daily.) But unlike either, it gives you direct access to a suite of online, interactive charts, tables, and other analytical tools created directly from our in-house database—and it’s designed to work with any computer or mobile device you own. It’s like being right there in our office with us, as your own inde- pendent fund analyst on our research team, with our proprietary risk and return statistics like rolling returns, relative returns, Maximum Cumulative Loss (MCL), and many more at your fingertips. And the best part is, you can get the Fund Analyzer for only $199 a year. For details on how you can try it risk-free for 60 days, visit www.thefundanalyzer.com/JoinNow or call 800/211-7641 and mention code MT9207 .

DO-IT-NOW ACTION RECOMMENDATIONS 4 Mid-sized stocks outperform their smaller and larger brethren. If you don’t own them, Capital Opportunity or the S&P-based ETFs are your best bets. (See page 1) 4 Distribution season is upon us and funds like Health Care and Long-Term Treasury are among those with the largest realized gains at the moment. You may not want to add to them in taxable accounts. (See page 3) 4 Make sure you have a decent weighting of tech stocks in your portfolio to take advantage of Tech Winter , the seasonal bull market that begins now. (See page 13)

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

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