WEEKLY BRIEF | Uncomfortable, Then Undeniable

Hello, and welcome to the IVA Weekly Brief for Wednesday, September 9.

There are no changes recommended for any of our Portfolios.

Friday marks 25 years since the September 11 terrorist attacks. It’s not in my remit to recount that horrible day, as plenty of others will handle that task in the days to come. What I want to talk about is what the anniversary teaches long-term investors.

Say you invested $10,000 in 500 Index (VFIAX) on September 10, 2001—the day before that horrible Tuesday. For those who may recall, the attack on the World Trade Center prevented the financial markets from opening that day and for a week afterward. When the markets reopened on the 17th 500 Index fell almost 5% and continued falling another 7% over the course of the week.

A year after your September 10 purchase, your $10,000 was worth $8,446—down 15.5%.

Your timing couldn’t have been much worse—and that wasn’t the only time your staying power was tested. You had to contend with the 2008-2009 Global Financial Crisis (when 500 Index fell 55.3% peak to trough), a European debt crisis, several wars, a global pandemic, surging inflation, multiple changes in political leadership and no shortage of pundits calling the next crash.

So, if you managed to put aside all that noise and stand by your initial investment in the 500 Index (reinvesting dividends along the way), how did you fare?

Pretty darn well. Through Tuesday's close, 500 Index compounded at a 10.0 annual pace over the past quarter century, turning that $10,000 into $109,560.

The lesson from the past 25 years: successful investing can be simple—stay invested, stay diversified, keep costs low. Simple, but not easy.

A New Label

As planned, Short-Term Federal (VSGBX) has been renamed Short-Term Government Securities Active. The new name is more intuitive, as the fund holds bonds issued by government agencies that don’t always carry the full faith and credit of the U.S. government. Nothing else changes—same strategy, managers and expenses. This is a label update, not a fund overhaul.

Don't confuse this with Federal Money Market (VMFXX)—the default settlement fund’s name isn't changing. 

A Web Fix for Some, Not All

When is a website upgrade news? When you’re Vanguard—and your existing site has frustrated customers enough that some have moved their accounts elsewhere.

Last week, Vanguard announced it's expanding access to "significant website upgrades." The rollout is happening in phases, though, so you may not have access yet. I don't.

Several IVA readers have written in over the past few weeks about blank balances on their screens. One subscriber logged in to find their account showing $1.5 million less than it should—the site was displaying data that was four years old.

Let’s hope the new website isn’t plagued by these errors.

If you've got access to the updated version, please tell me what you think. Reply to this email or write us at support@independentvanguardadviser.com.

Our Portfolios

Our Portfolios are showing solid returns for the year through Tuesday. The Aggressive Portfolio is up 15.5%, the Aggressive ETF Portfolio is up 13.3%, the Growth Portfolio is up 13.7%, the Moderate Portfolio is up 12.8% and the Conservative Portfolio is up 7.6%.

This compares to a 13.3% return for Total Stock Market Index (VTSAX), a 17.3% gain for Total International Stock Index (VTIAX), and a 0.3% decline for Total Bond Market Index (VBTLX). Vanguard’s most aggressive multi-index fund, Target Retirement 2070 (VSNVX), is up 13.5% for the year, and its most conservative, LifeStrategy 20/80 (VASIX), is up 2.7%.

IVA Research

Yesterday, I kicked off a two-part series sorting through Vanguard's crowded core taxable bond lineup, starting with cash alternatives and short-maturity funds. Read it here.

On Thursday, I'll finish the job with intermediate- and long-term funds—including two picks that unseat my longtime favorites.

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