WEEKLY BRIEF | Perspective in a Noisy Market

Hello, and welcome to the IVA Weekly Brief for Wednesday, March 11.

There are no changes recommended for any of our Portfolios.

When missiles are flying and headlines turn dramatic, it can be hard to keep perspective. But that’s exactly what successful long-term investors need most.

Yes, since the U.S. and Israel began bombing Iran, oil prices have surged roughly 25%—from about $67 per barrel to around $83 (as of Tuesday's close). Though at one point on Monday, oil briefly approached $120. So, oil traders have been on a rollercoaster ride the past seven trading days.

But we simply haven’t seen that same level of drama in the stock market.

500 Index (VFIAX), for example, is down just 1.4% in March and sits only 2.7% below its January 27 peak. At its worst, the flagship index fund was 3.3% below its prior high. That’s not even a pullback—typically defined as a decline of 5% to 10%.

To be fair, other parts of the market have slipped a bit more. As you can see in the chart above, both SmallCap Index (VSMAX) and Total International Stock Index (VTIAX) have experienced pullbacks. Even so, none of these market measures has entered correction territory—a decline of 10% to 20%. For the record, that 20% line marks the start of a bear market.

Of course, that hasn’t stopped the talking heads from warning that a correction is just around the corner.

Could the war with Iran lead to one? Of course. It’s also possible the worst is already behind us—no one can say for sure.

But here’s what we can say.

First, as I’ve told you before (here, here and here, for example), investors should expect a 10% correction every year.

Second, while every correction starts with a pullback—and every bear market begins with a correction—that doesn’t mean every pullback turns into something worse. A 5% decline doesn’t automatically lead to a 20% drop.

And if the market does fall that far, remember this: while the next bear market is viewed as a risk, we look back on past bear markets as great buying opportunities.

That said, if your portfolio is keeping you up at night, you are taking on too much risk. It’s better to address that now—selling some stocks and raising bonds or cash—when markets are down a little (in a pullback) than when they’re down a lot (in a bear market).

And no, that doesn’t contradict what I said last week about war being a poor excuse to sell all your stocks. Remember, I’m not a day (or even week- or month-) trader. My analysis looked at market behavior over six- and 12-month periods—which, frankly, isn’t even that long-term.

So let’s see where we—and the markets—stand in September and again next March.

But all the analysis in the world doesn’t change one simple truth: you have to live with your portfolio. The “right” portfolio for you is the one that helps you reach your long-term goals and lets you sleep well at night.

Target-Maturity Bond ETFs Delayed (Again)

In November, Vanguard announced plans to join the bond-ladder race with 10 target-maturity corporate bond ETFs. But the fund giant hasn’t exactly sprinted to the starting line.

The ETFs were originally slated to launch on February 7, 2026, but Vanguard has now pushed the date back twice. I expect they will launch on March 23. Why?

First, Vanguard provided a specific new launch date rather than the usual “30-day delay.” Second, the firm’s new international growth and value ETFs are expected to debut on March 23. My bet is Vanguard flips the switch on all of them at once.

I shared an analysis of the foreign stock ETFs with Premium Members last week. Yesterday, I took a close look at the new bond ETFs.

Supplemental Distributions Update

Vanguard’s estimates for the March supplemental capital gains distributions are available … if you know where to look for them.

Oddly, Vanguard’s tax center for advisors does not have the data, but the page for individual investors does. Go figure—just another day in Vanguard’s tech.

Anyway.

The table below lists the funds scheduled to make capital gains distributions at the end of the month.

Dividend Growth (VDIGX) is returning another 6% in capital gains to shareholders. And that’s on top of the roughly 12% distribution it paid in December. Ouch.

Health Care (VGHCX) and Energy (VGENX) are also paying out around 3% of NAV in capital gains.

If you prefer, you can view Vanguard’s official document below. It also lists three funds—Baillie Gifford Global Positive Impact Stock (VBPIX), Global Capital Cycles (VGPMX), and Market Neutral (VMNFX)—that will pay small dividend distributions but no capital gains.

Institutional versions of 500 Index and Total Stock Market Index are also making distributions, though they are minimal—less than 1% in capital gains. (If you own those share classes, it’s most likely through a 401(k) plan.)

One surprise: MidCap Growth (VMGRX) isn’t on the list. At the end of 2025, the fund reported realized capital gains of over 10%. I was expecting it to pay out something in March.

I’ll be sharing an interview with the fund’s new managers in the weeks ahead, but for now, let this be another reminder that the tax consequences of switching sub-advisers at MidCap Growth may not be fully behind us.

Our Portfolios

Our Portfolios are showing positive returns for the year through Tuesday. The Aggressive and Aggressive ETF Portfolios are up 1.4%, the Growth Portfolio is up 0.9%, the Moderate Portfolio is up 2.4% and the Conservative Portfolio is up 1.5%.

This compares to a 0.5% decline for Total Stock Market Index (VTSAX), a 5.1% gain for Total International Stock Index (VTIAX), and a 0.8% return for Total Bond Market Index (VBTLX). Vanguard’s most aggressive multi-index fund, Target Retirement 2070 (VSNVX), is up 1.7% for the year, and its most conservative, LifeStrategy Income (VASIX), is up 1.0%.

IVA Research

Yesterday, I shared my take on target-maturity bond funds with Premium Members. They solve specific problems, but don’t really belong in a long-term diversified portfolio.

Until my next IVA Weekly Brief, have a safe, sound and prosperous investment future.