Archive for May, 2011

Good news for Small Investors from Vanguard

Vanguard is always considered to be best among the bunch on mutual fund arena. They maintain their high standard in many ways by giving expense ratio less on their fund, high minimim fund required to open an account, knowledgeable managers doing good job analyzing the market well enough to manage the fund and so much more. 

If you are wondering what I mean Target funds? Target funds have been famous for some years now for retirement and education portfolios. The fund is diversified to have different asset classes depending on the target year. It uses sliding asset allocator model. They usually start with aggressive on stocks and become more conservative with bonds over time.

For example, if you are 35 and you selected the target year for retirement to be 2041 and chose 2040 target fund. The asset allocation in the fund will be more aggressive with stocks 90% and bonds 10% as an example. Once the years progress,the asset allocation changes to 50-50% and later to 20%-80% and so forth

Until last week, they had minimum $3000 required to open any funds including Target Retirement fund. Since last week, they relaxed the requirement and made a big move to cut down their minimum open fund needed. Now an young investor who like to take advantage of the vanguard Target Retirement portfolio, they only need $1000. It is a smart move by them to attract young, small time investors.

Check out more details at

Interesting Financial Outlook Report from TRoweprice

As many of you already know, TRowePrice(TRP) is one among the top mutual funds companies in US. Many recognized asset managers do fine job in analysing the market to provide excellent reports which talks about the past, present and future of the market trends.  Being a TRP fund owner myself, I get those periodic reports about the current market and financial conditions. I even mentioned few articles from the reports and their magazines in my blog post in the past. 

This post is also about 2 good articles which I found interesting and knowledgable for any type of investor to get a glimpse of the past and helps to get ahead on the future. These 2 articles were part of the Spring 2011 TRoweprice issue.  

A New Era of Internet Investing

This article took the Internet Bubble in 1990 to compare against the current internet companies boom to predict whether there is any chance of Internet Bubble 2.0.  It was interesting to see how the current players play their hard ball in this tough economic condition and still able to make good profit and progress with great strides.  It starts out saying,

“Sparked by the introduction of  Apple’s iPhone four years ago, the convergence of computing and communications—enabling wireless Internet access virtually anytime,anywhere—is not only changing lifestyles and spawning dynamic new companies, but also providing new growth opportunities for established industry leaders. This Internet boom is different than that of the latter 1990s, when many companies with no earnings or prospect of earnings went public at stratospheric valuations and their businesses proved unsustainable”.

It continued to analyze new players/companies like Groupon, Facebook which are just few years old and still able to show good revenue using the social media sphere as the base business model. It compared how companies like google whose market captilization has increased many fold since they started and how they continue to make profit and grow, how they can still grow to benefit the investors. So don’t miss out to get the glimpse of the internet companies past and future from this article.

Taking Stock of the Market: Are We There Yet?

This article is a recap on giving assurance to the investors in a way by analyzing the stock market from the March 2009 burst till date. It shows what type of investors are currently in the safe zone after their portfolio value dwindled during the 2009 market crash and who are making money now. It also shows why diversification and asset allocation plays a major role in portfolio management. By sticking to basics on dollar cost averaging, many investors have reaped additional benefit when the market was down by continuously/periodically investing on the assets.

It starts out as, “The U.S. stock market recovery is more than two years old, dating from the last low of  the S&P 500 Index on March 9, 2009. And Judith Ward, a T. Rowe Price financial planner, says the protracted rebound reminds her of those “long road trips with the kids in the backseat” because some investors may have been repeatedly asking, “Are we there yet?”—while waiting to recoup their losses in the 2007–2009 market crash.

But T. Rowe Price advises investors to diversify their portfolios consistent with the time horizons of their goals. An 85% stock/15% bond portfolio, which the firm typically recommends for those about 20 years from retirement, fared better than a portfolio with 100% stocks, but also had not fully recovered. Those with a 55% stock/45% bond retirement portfolio, generally appropriate for investors at retirement age, first recouped their losses by last October and have generally stayed above the $100,000 level since then.”

These 2 articles very different but very well presented to be understandble by any type of investors. To read the full articles, click here. 

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