Dividends: Distribution Yield vs. SEC Yield

I recently looked up the yield on the Vanguard Intermediate-Term Tax-Exempt municipal bond fund and was surprised by what I saw. According to Google, Yahoo, and Morningstar, it’s yield was a little over 3%. Wait a minute… Over 3% for a tax-exempt bond fund? In the current interest rate environment? Really? Yes, really. Well, sort … Read more

Dividend Investing: Payment Dates Don’t Matter

Here we go again. Every once in awhile I’ll run into an article* about a great set of dividend-paying stocks whose payout dates are lined up to ensure a monthly flow of dividends. And when I do, I can’t help but roll my eyes. If you’re interested in picking stocks, there are plenty of things … Read more

Deciding When to Rebalance Your Investment Portfolio

I’ve talked in the past about why you should rebalance your portfolio. In short, you do so to maintain your desired risk profile. But how do you decide when to rebalance? While it’s good to keep things in check, there’s no sense in going overboard. While some re-balance at set time points (e.g., annually), we’ve … Read more

Thoughts on Dollar-Cost Averaging

On the way to work the other day, I heard a discussion of dollar-cost averaging on the radio. Yes, I listen to boring radio stations… Overall, I was struck by how complex they made an otherwise simple concept sound. I thus thought I’d share some thoughts on the matter. For background, dollar-cost averaging (DCA) refers … Read more

Why Did My Mutual Fund Share Price Drop?

Every year around this time, investors scratch their heads and wonder why the share price (or net asset value; NAV) of their mutual fund dropped even though the market went up. The short answer is that many mutual funds distribute their dividends as well as capital gains around this time. When this happens, the share … Read more

We Don’t (Automatically) Reinvest Dividends

Dividends make up a substantial fraction of the returns on many investments, and most of us reinvest them — at least in our early years. The easiest way to reinvest your dividends is to automate the process. Simply direct that money straight back into whatever produced it. And yet… My wife and I don’t do … Read more

Proper Asset Allocation in Retirement

A reader recently wrote in with a question about asset allocation in retirement, having been advised that anyone in retirement should have at least 80% in equities. He’ll be retiring at age 66 later this year and, based on everything that he’s read, this recommendation seemed quite high to him. While I’m not in the … Read more

The Value of a (Good) Financial Planner

While we’re on the topic of financial planners, and at the risk of getting stuck in a rut… Have you ever wondered what the advice of a good financial planner or advisor is worth? In other words, what sort of benefit are you actually deriving from their planning services (and the associated fees)? Well, now … Read more

Inside Our Investment Portfolio

Today, I thought I’d pull back the curtain and give you an idea of what our investment portfolio looks like. If you’ve been following my articles, it will likely come as no surprise that I’m a huge fan of index funds, and our holdings reflect that. We have the lion’s share of our investments at … Read more

Tax Consequences of Vanguard Mutual Fund Share Conversions

A reader recently wrote in to ask the following about Vanguard Admiral Share conversions: “We’re getting close to being able to convert our Vanguard mutual funds to Admiral Shares. We’re pretty excited about this, but I’m also a little worried. Are there any tax consequences that I should be aware of? I’d hate to get … Read more