Hello, this is Jeff DeMaso with the IVA Weekly Brief for Wednesday, January 17.

There are no changes recommended for any of our Portfolios.

On Air

If you missed my note yesterday, I recently joined Rusty Vanneman and Robyn Murray on Orion's The Weighing Machine podcast. We talked about my background and all things Vanguard. If you’re reading this email, I think you’ll enjoy the episode.

You can find the episode wherever you listen to podcasts, but I've provided a few links below:


[Note: If the Spotify link does not appear in the email, you can find it by viewing this article on our website.]

Apple Podcast

‎Orion’s The Weighing Machine: Vanguard’s Biggest Moves in 2023 with The Independent Vanguard Adviser’s Jeff DeMaso on Apple Podcasts
‎Show Orion’s The Weighing Machine, Ep Vanguard’s Biggest Moves in 2023 with The Independent Vanguard Adviser’s Jeff DeMaso - Jan 15, 2024

Google Podcast

Orion’s The Weighing Machine - Vanguard’s Biggest Moves in 2023 with The Independent Vanguard Adviser’s Jeff DeMaso
As we move into the New Year, we take a closer look at the market’s historic year, offer a preview on the year to come, look at bond predictions, global investing and much more. Today on the podcast, Rusty and Robyn are joined by Jeff DeMaso - editor and founder of _The Independent Vanguard Adviser_. Jeff was previously the co-editor and research director of _The Independent Adviser for Vanguard Investors_. He also served as Portfolio Manager, Director of Research and the interim CIO at _Adviser Investments, LLC_—a leading investment advisory firm. He has been quoted in _Forbes_, _The Wall Street Journal_, _Barron’s_, _InvestmentNews_ and _Kiplinger_, to name a few. _Citywire_ named him a _Rising Star _of manager research in 2019. Jeff graduated magna cum laude from Tufts University with a B.A. in economics in 2006 and holds the Chartered Financial Analyst designation. Key Takeaways * [03:04] - Jeff’s research, professional background and what drives him. * [05:57] - What really motivates Jeff’s newsletter, _The Independent Vanguard Adviser_? * [07:40] - What were some of the biggest events for Vanguard in 2023 and which are the ones that investors should care about the most? * [09:30] - What does Jeff like best about Vanguard and where does he think they could improve? * [11:02] - Vanguard’s latest thoughts on ESG strategies. * [13:55] - The top highlights and lowlights for the 2023 market. * [15:58] - Jeff’s economic and market outlook for 2024. * [19:00] - Jeff’s view on the healthcare sector moving forward. * [21:00] - How should investors be treating their bond allocations these days? * [22:35] - Are many of Jeff’s readers asking if they should move their investment funds to money market accounts? If so, how is he addressing this with them? * [24:23] - Jeff’s take on non-US stocks, both strategically and tactically, in balanced portfolios. * [26:17] - What is his favorite investment idea, currently, for 2024? Quotes [04:18] - “That’s going to be my career hack…find the person you can learn the most from and go work with them as closely as possible. Ask questions, don’t be afraid to make mistakes and just keep learning.” ~ Jeff DeMaso [10:15] - ”...Vanguard’s service in tech…continues to fall short of its competitors, and I cannot wait for the day when I get to write the article that says ‘Hey, Vanguard has really stepped up their game and their service is firing on all cylinders’ - today is not that day.” ~ Jeff DeMaso Links * Jeff DeMaso on LinkedIn * The Independent Vanguard Adviser * Aloe Blacc - The Man (Explicit) * Just One Thing Podcast * Morgan Housel Podcast Connect with Us * Meet Rusty Vanneman, Orion’s Chief Investment Officer * Check Out All of Orion’s Podcasts * Power Your Growth with Orion Compliance Code: 0031-OPS-1/5/2024 Disclosure(s) _Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor._

One Last Bitcoin Loophole

As I said last week, this isn’t a cryptocurrency newsletter. But Vanguard and the cryptocurrency world have collided for the past week. Here’s a timeline of recent bitcoin-related events:

On Thursday, January 11, the SEC approved 11 spot bitcoin ETFs—a first. That same day, I told Premium Members how they could still buy bitcoin trackers at Vanguard, even though the firm was blocking purchases of the new ETFs.

After the market closed on Friday, January 12, Vanguard closed the bitcoin loophole I had identified.

Which brings us to today. Vanguard has clearly and loudly said N-O to bitcoin and cryptocurrency products. Vanguard has put a full stop to buying them, and they are adamant that they have no plan to offer their own bitcoin ETF.

This puts Vanguard at odds with its biggest competitors and millions of customers. I’m working on a missive for Premium Members that lays out my thinking on what this means for Vanguard, the company, in the long run. Stay tuned.

In the meantime, if you’re hellbent on buying bitcoin in your Vanguard account, I have one last loophole: MicroStrategy (MSTR) stock.

MicroStrategy is a (former?) technology company that started buying bitcoin in a big way in August 2020 and is now almost wholly focused on it. Since then, investors have used the company’s stock as a close but not perfect way to play bitcoin. As you can see in the chart below, the stock has roughly tracked bitcoin’s ups and downs over the past three years.

Source: YCharts and The IVA

You can still buy MicroStrategy stock in your Vanguard brokerage account. It’s not the same as purchasing a spot or futures-based bitcoin ETF, but it could do the job for you.

However, let me repeat one more time: You absolutely do not need bitcoin in your portfolio.

Our Portfolios

Our Portfolios are slightly in the red for the year through Tuesday. The Aggressive Portfolio is down 1.1%, the Aggressive ETF Portfolio is off 0.9%, the Growth Portfolio is down 0.7% and the Moderate and Conservative Portfolios are down 0.4%.

This compares to a 0.5% decline for Total Stock Market Index (VTSAX), a 2.6% drop for Total International Stock Index (VTIAX), and a 0.9% decline for Total Bond Market Index (VBTLX). Vanguard’s most aggressive multi-index fund, Target Retirement 2070 (VSNVX), is down 1.3% for the year, and its most conservative, LifeStrategy Income (VASIX), is off 1.0%.

Source: Vanguard and The IVA

IVA Research

Yesterday, I shared an update on 2024’s contribution limits for retirement accounts with Premium Members. I also published an article in support of saving and investing early, which is open to the public. Please feel free to share that article with anyone who might benefit from the message.

Several of you have asked about the other side of retirement accounts—required distributions. I hear you, and an article exploring that topic is in the works. Stay tuned.

Finally, as I noted already, Premium Members also received a couple of Quick Take articles from me about Vanguard blocking purchases of bitcoin ETFs.

Until my next IVA Weekly Brief, this is Jeff DeMaso wishing you a safe, sound and prosperous investment future.

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