Time To Give Hello, this is Dan Wiener with the FFSA Vanguard Hotline for Thursday, December 31st, the final day of a remarkable year. There are no changes recommended for any of our Model Portfolios. What an incredible year. A global pandemic, an incredibly ferocious bear market followed by an equally ferocious bull rebound, some 100 record closes for the Dow, the S&P 500 and the NASDAQ combined, ultra-low borrowing rates, a surging housing market, the almost instantaneous shift to a work-from-home economy and surge in online commerce, a crypto currency on a moonshot… The list goes on and on. Of course, hundreds of thousands of needless deaths here at home, rising food insecurity, homelessness and failing businesses put the year’s more positive events into perspective. I’m feeling humbled by the great divergence seen between the many who have plenty, and the plenty who have little. With one day left in 2020, our Model Portfolios are showing strong returns for the year through Wednesday. The Growth Model has gained 19.1%, the Growth Index Model is up 15.4%, the Conservative Growth Model is up 17.2% and finally the Income Model is up 13.9%. This compares to a 20.4% gain for Total Stock Market Index (VTSAX), an 11.5% rise for Total International Stock Index (VTIAX) and a 7.6% return for Total Bond Market Index (VBTLX). Vanguard’s most aggressive multi-index fund, Target Retirement 2065 (VLXVX), is up 16.0% for the year, and its most conservative, Target Retirement Income (VTINX), is up 9.9% for the year. With Jeff and me providing lots of investment commentary in the upcoming January newsletter, which we plan to have up on the web by Monday afternoon, I’m going to diverge a bit from the investment news, of which we’ll all have had our fill by the middle of next week. We have been incredibly fortunate to have not only lived in these United States all these years, but to also have been able to invest in our futures with Vanguard as a home. I don’t always agree with what Vanguard does nor how they run their company. That’s true. But I think that with a discerning eye and a healthy skepticism, you and I have made it through the morass to generate strong, risk-adjusted long-term gains in our portfolios. Over the 30 years that I, and now Jeff and I, have been providing commentary and recommendations on how to invest at Vanguard, our Growth Model Portfolio has generated a better-than-12% annualized return, outperforming Vanguard’s benchmark 500 Index (VFINX) by 1.5% per annum. Starting with $50,000 in 1991, both our Growth Model Portfolio and our Conservative Growth Model Portfolio have grown to more than $1 million. And we did it without leverage, without taking on margin, without using risky options or penny stocks. We did it without the snake-oil that seems to permeate much of the investment advisory business. And for that I’m grateful. With that, we should never forget that there are so many people in the world, sometimes in our own towns and on our own streets, who are much less fortunate. It’s part of our culture that we don’t talk about money nearly enough. The neighbor with the Tesla may look prosperous, but the car may be leased, the debt on his or her home could be crushing, and that work-from-home look may actually be hiding the reality of a job or business, and income lost for good. Fortunate as we are, this is a great time to share. If you can share financially, that’s a blessing. If it’s a meal you can deliver to someone who needs it, that’s fantastic. And if it’s a shoulder to lean on or an ear to listen to someone’s woes, well, you may be the only one listening so that’s important, too. My wife often says that you’d be surprised how thin most people’s support networks really are. If you’re in the position to provide some support, this would be a good time to do it. The pandemic is not over, the winter months can be cold and even more isolating than usual given the stay-at-home regime we’ve become accustomed to. Together, my wife and I have been doing our part this holiday season to bring a little more joy and provide a little more support to those who truly need it. I know we can do more, and I know that we will in the months ahead. I hope you’ll do the same. Until next week, next month and next year, this is Dan Wiener wishing you a safe, sound and prosperous investment future and a very happy and healthy new year.  Like Dan and Jeff on Facebook
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