Tuesday, January 22, 2013

Research Mutual funds and ETF: where to find information

Due to the rich internet, information is available from various sources on what to buy. I use Morningstar, Kiplinger, MaxFunds , Google Finance, Yahoo finance, CNNmoney and Seeking Alpha.


Morningstar has excellent information on mutual funds. I check for the following data in the quote tab

  1. Number of stars: 5 or 4. Yield, 52 week price range, type of fund and expenses
  2. Asset allocation
  3. Risk measures
  4. Style Map
  5. 1 yr, 3 yr, 5 yr and 10 yr return
  6. Top Holdings

In the chart tab I check for rolling returns, mainly the maximum negative return. There is also a provision here to type in a symbol to compare performance.

For example in Vanguard Dividend Growth Inv fund VDIGX as of 1/22/2013 I got the following information:

  1. 5 stars, 2.21% yield, 1 year range $ 15.43 to $ 17.47, large blend fund, expenses 0.31%
  2. Asset allocation: US stock 86.78%, non US stock: 9.62%
  3. Risk vs category: Low, Return vs category: High
  4. Style Map: Large core
  5. 1 yr 12.11%, 3 yr 12.79%, 5 yr 7.02%, 10 yr 9.51% return.
  6. Top Holdings: occidental petroleum, Pepsico, J& J, Exxon, Target
  7. Rolling return –22.5% in 2008.


Kiplinger has excellent information for investments. The following links will give a flavor of the type of information available from Kiplinger.

  1. Kiplinger's 25 Favorite No-Load Mutual Funds
  2. Kiplinger 25 Model Portfolios
  3. How to Retire Rich: 6 Smart Steps at Ages 50-66
  4. Our Investing Outlook for 2013


MaxFunds has interesting information which gives another perspective on the funds.

For example they give a 97 rating for VDIGX and represent pictorially various aspects of the fund. They also have several portfolio holding recommendation like the following:

  2. Conservative PORTFOLIO HOLDINGS

Google Finance

Google Finance has instant quotes for stocks and mutual funds. In addition they nicely give a summary. For example they say VDIGX has a best 3 month return of 19.77% and worst 2 moth return of –22.58%.

Yahoo finance

Yahoo finance is another site for useful finance information. When you get a quote for a fund this site also has news headlines regarding the fund. This also would tell you what people who look at this fund also look at.

Another important information you can get from Yahoo finance is the ownership information. When I like a stock, I look for the funds which own it from this. For example when you look at Exxon Mobile the following link 

Exxon Mobile Major Holders

gives you Vanguard Wellington fund as one of the holders.


CNNmoney has finance information. 

Money 70: Best mutual funds and ETFs has very useful list of good mutual funds.

Seeking Alpha

 Seeking Alpha has some interesting articles on various financial stocks, ETFs and mutual funds.

For example the Dividends & Income tab has some excellent articles on various income producing ideas!

Thursday, January 17, 2013

Where to invest the money: Wells Fargo and Vanguard are really good

There are many financial institutions available to park your money. If you are a trader you may have to look at various options. Since my goal is to get good return with very little trading, 2 institutions stand out.

 Wells Fargo PMA Package  requires a total of $ 25K in deposit in bank accounts or $ 50K for brokerage accounts. For this you get 100 free trades a year which is more than enough for me. These trades also include No load transaction fee mutual funds. I have seen Wells Fargo branches in West as well as East coast and very convenient to bank with.

Vanguard  Standard  Services  allows all Vanguard ETFs and mutual funds to be traded free. Most of the Vanguard mutual funds have a minimum of $ 3K and Admiral funds (which have lower cost) have a minimum of $ 50K. Vanguard has one of the lowest costs. Only inconvenience is you have to link the Vanguard account to a bank account to transfer money in and out since they do not have any physical branches.

Schwab has No load funds and Schwab ETFs can be traded free. However if you want to buy something like a Vanguard fund you have to pay $ 76 per trade! Fidelity is similar to Schwab. They have quiet a few No Transaction Fee funds but will cost $ 75 to buy a Vanguard fund!

Tuesday, January 15, 2013

Saving, Investing, Land of Critical Mass for Golden years

In 1980s Savings accounts in Savings and Loan banks like Home savings (now part of Chase), use to pay 5% interest. Then came the savings and loan crisis, money market accounts and various innovations which all meant you had to look for good deals like Vanguard Prime Money Market account for decent return.

Then came the financial crisis in 2008.The Federal Reserve under Ben Bernanke adopted ZIRP (Zero Interest Rate Policy) from December 2008. It is very hard now to get a decent return without lot of work. I think I have come us with some strategies to do this and wanted to share with rest of the world.

A word of caution. Please read these posts and do your own research before investing your hard earned dollars. As a wise man once said everything can be explained in financial market after it happens.

My goals are very simple. Try to get around 4 % return with minimum risk as recommended by this article: The ideal retirement withdrawal rate. A withdrawal rate of 4% from your savings is supposed to be sustainable for a long term. If you can manage a 4% return you might be able to live on the interest without touching the principal or use 2 to 3 % of the principal to cover inflation!

I will try to cover in these posts my discoveries and various links to reference material which will help you to decipher the financial world. I hope all of us can achieve critical mass as defined below by Bob Brinker.

CRITICAL MASS:  “A state of freedom from worry and anxiety about money due to the accumulation of assets which make it possible to live your life as you choose without working if you prefer not to work or just working because you enjoy your work but don't need the income. Plainly stated, the Land of Critical Mass is a place in which individuals enjoy their own personal financial nirvana. Differentiation between earned income and assets is a fundamental lesson to learn when thinking in terms of critical mass. Earned income does not produce critical mass......critical mass is strictly a function of assets.”