Fund of the Week: VNQ Vanguard REIT Index ETF

VNQ Vanguard REIT Index ETF took a break from summer vacation last week to rack up a gain of 16.80%. That's a nice week's work. Of course it had been slacking and is still sitting on a big loss since I hypothetically invested in it.

Real Estate rocked across the board. Mid Cap funds and Financial companies also did well last week.


Bonds suffered with BTTRX American Century Target 2020 losing 5.07%.

Health care companies also struggled. Protesters across the country rallied hard to keep the government from being invloved in health care, arguing that it is far better to have private companies with profit as the primary motivator managing health care and deciding what will and will not be covered by insurance companies.

Nice job fellas.

I wonder if the loss in health care company stocks indicates that investors think the protests will be ignored...

Sorry

I failed to update last week which is too bad given how different this week has been. I've been sick- very busy at work, but mostly I'm just lame and did not get it done in time to get the weekly numbers from Morningstar.

To try and win back your love I offer this- Jon Stewart, unedited, talking to Jim Cramer about what it is like to be a tool.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 1

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 2

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Portfolio Update 11/07/08: Bob the Drummer

At the end of this week, there is hope.

Hope for Bob the Drummer.

You see Bob the Drummer does not want his taxes to go up so he can buy a business. His story was so powerful that it launched a tour.

The tour was confusing, because it tried to make the point that Bob, who was worried about paying higher taxes, should support a candidate that would have him paying three times more taxes than if he supported the other candidate.

The average drummer in Bob's home state earns $47,930 a year.

Well those earning $47,930 would see their tax bill decline by $319 under the plan of the candidate who launched a tour touting Bob's struggles. But the other candidate's plan would see the average drummer's taxes decline $1042.

Bob did not quite understand this or did not care. Bob actually has no plans to buy a business, so the foundation of his story is a bit of a lie. Also turns out Bob is not a licensed drummer and does not bother to pay the taxes he owes under the current tax plan.

The reason there is hope today for Bob is that the candidate that plans to lower the taxes that Bob can continue to not pay by three times as much as the candidate that used Bob to try and scare a lot of people, is now the president elect.

So there is hope for Bob and anyone else who wants to be a drummer.



For those of us seeking to make pretend money with hypothetical investments, this week was a bit rough.

The WylieMoney portfolio of Mostly Managed mutual funds continues to be the best performing portfolio invested on May 1 2007, but by less than 1%.

WylieMoney 20 Mostly Managed
ETF 20
Three Fund Index
WylieMoney Slowly
Lazy 20 Mostly Index
S&P 500

Why lowering everyone's mortgage to 5.25% a terrible proposal

The proposal to lower all mortgages to 30 year fixed mortgage at 5.25% ticks me off to no end. And if you make responsible decisions, waited for an affordable rate when buying your home, researched and refinanced at a rate close to this, are saving money for a down payment on your first home, or you paid points to get a rate at 5.25% it should tick you off too.

If you waited and bought or refinanced when rates actually hit 5.25%, then this proposal says your patience or the higher cost you paid for the home (home costs often go up as rates go down since the amount a buyer can pay is what it is), or points you paid or the effort you put into managing your mortgage was a complete waste.

And if you were responsible and could not afford a home, you are screwed because everyone will have a rate lower than you're ever likely to ever see meaning the value of homes won't be set by what the market (you) can afford but will be higher than that.

Alternatively, this article suggests that only those delinquent in their payments might get the new rate so perhaps now is the time to buy a new home at the highest rate, but cheapest closing costs you can find, and then don't make a single payment.

Why not make a fair proposal? If the goal is to lower mortgage rates so that fewer people default, why not lower everyone's rates the same amount, regardless of whether they have not fulfilled their contract or whether they were responsible, ripped off or just greedy.

If the average interest rate is say 7.25% then why not lower all rates by 2%. That way, people who got conned or were totally irresponsible with their money get assistance, but people who are on top of their business or paid points for their loan are not punished by essentially wiping out the advantage they earned through their patience, willingness to pay more up front, hard work, or responsible decision making. And responsible savers, who want to but a home, have a chance as the market will still turn over as those who really just can't afford what they took on, move on, and the market continues to adjust to what is reasonable.

Thoughts?

Presidential Debate Round One and Your Investments

Which President will be better for your investments?

After much research (1, 2, 3, 4, 5, 6), I have determined it depends on your goal.

Since the WylieMoney Portfolio of hypothetical investments has performed much better than its competition as markets have been collapsing, I'm gonna say, go with McCain. I'm not sure if the portfolio of funds I selected will outperform index fund portfolios if the economy turns around so to ensure that my portfolio continues to beat its peers, making me the smartest blogger blogging about mutual fund portfolios, I'm gonna root for continued failure.

"The Sheriff" might disagree with my strategy (or is this a tactic?).

Sorry, I Got Distracted

It has been almost a month since my last post. I went on vacation, I came back to a busy time at work, had company, got sick, etc.

None of these are good reasons to go so long without posting. Especially when the topic of my blog has had one of the more interesting months in a long time.

So no excuses, just an apology... sorry.

Weekly updates, next WylieMoney Slowly fund, thoughts and ideas coming soon.

Go Paperless with Etrade

This year I resolved to focus a little more on being less wasteful. Call it going green. Call it being more efficient. Call it whatever you want.

The bottom line is that everything you do impacts the world in which you live. You will never be aware of most of the impacts. Often the impacts are quite small, individually, and some are good. But many impacts are bad, even in small ways and waste is one thing that is pretty easy to be mindful of and often easy to do something about.

I am one of those kinds of people who actually thumbs through mutual fund prospectuses. Even money market account updates. I don't read them all the way through, but I glance through. So I have never considered it 'wasteful' to get them in the mail.

Truth is, since I have a laptop, it may be more convenient for me to have prospectuses sent to me via email so that I don't have to drag a bunch of paper with me until a good time to read them comes up. And even though I recycle them, it is still a lot of paper that has to be processed for no good reason.

So, I changed my preferences in my Etrade brokerage and IRA accounts. If you use Etrade, you can too and it is easy. I imagine for most brokerages with good online interfaces, it is pretty easy to do. For Etrade, here is exactly how you do it:

Log in.

In the "Accounts" tab, click the "My Info" subtab:

In the "My Info" area, choose the "Account Preferences: tab:


Scroll all the way down to "Account Features" and click the "Edit" link (not shown) next to the option "Electronic Documents:"

This will bring you to the "Go Paperless..." page. Click on the items you want to receive via email instead of in the mail and then click "Submit" (not shown). you can also change your email address here.


That's all there is to it.

I opted to still receive paper copies of account statements, trade confirmations, and tax documents as I file and save all of these. Read here to find out why.

A visit to the Oracle!

I apologize for not posting recently. I had an errand to run. I went to visit the Oracle at Delphi to figure out what the economy will look like in the future...


Surprisingly, I got the answer! I made my way back to Athens to celebrate and then catch a flight back to the US and invest accordingly. I decided to celebrate with some Greek Liquor.


I had a little ouzo, but did not stop there...


When I woke up the next day under the Acropolis, I had no memory of what the Oracle told me. All I can say is that what they say about the dollar is true.


Once I made it back to the states, I headed to Cape Cod for some R&R.


Now to catch up...

Where's last week's update?

I did not realize that the markets were open today. So all the values of ETFs in my portfolios have changed since last Friday.

Rather than compare last Friday's closing prices to today's ETF trading prices, I will post an update using tonights closing prices for all the portfolios.

Here is a visual representation of what can happen when you overlook the details!

Victory Parade

I missed the boat! I have been adding a new mutual fund each month to one of the hypothetical portfolios I track as part of an experiment to compare Lazy portfolios (Index investing), ETFs, and low cost managed funds.

I try to research whether the fund I originally picked for the WylieMoney 20 Mostly Managed portfolio is still the best option available through Etrade. Then I add it on the first significantly down day of the month.

Well Nov. 1st was the day to buy, but I had not reconfirmed my pick, and did not 'buy.' You see, I have been busy. What with Halloween, New England sports and an upcoming trip to Greece, and fall yard work, I've been... distracted.

One of the benefits to having a system in place, however, is that it is easy to just pick up and carry on. So this weekend I'll revisit NTF (no transaction fee/load) Mid Cap Growth funds available through Etrade. A quick glance last night revealed that Janus Enterprise JAENX may not be the best option. Then on the first down day after I confirm my pick, I'll add the fund to the WylieMoney Slowly Portfolio.

I will also analyze the first 6 months of this experiment.

To give you an indication of how the portfolios compared over the first 6 months, the WylieMoney 20 Portfolio was like the Red Sox- Strong in the beginning, a little worrisome towards the end and then dominate when it mattered.

The Lazy Portfolios were like the Rockies- A worthy opponent especially down the stretch, but easily beaten, despite all the hype.

The ETF portfolio was like the Indians- You thought they had a chance, but they just didn't.

The S&P 500 was like the Yankees- You might pick them because they've has done well before, but they just could not get it together this year.

The WylieMoney... I mean Red Sox parade!

Beckett knows what's up...

Jacoby

MVP!

Treasuries or Treasurys?

I grabbed this screen shot off CNNMoney yesterday. Hopefully you invest in Treasurys since they were on the rise due to low home sales. You would have been disappointed if you invest in Treasuries, which slipped due to the gain in home sales.


Apparently Wall Street wasn't alone in its muddle.

I told you I loved this market!

At the end of my post yesterday, I said "I am loving this market these days." Today, on my lunch break, I invested a little more (real money, not hypothetical). By 4 pm everybody else jumped on the bandwagon and the market recovered from another huge loss to close basically flat. I had hoped it would stay down, but oh well.

Now, I'm no expert, but what I see is continued strong profits, largely due to increased productivity, which I attribute to companies finally making good use of faster computers and decent software. The economy is chugging along, overseas markets are doing great, emerging markets still have tons of room to grow as more jobs land there, building new generations of workers with money to spend, etc, etc.

A certain number of our neighbors lied to themselves and their mortgage brokers about how much house they could afford. Many of them signed up for adjustable rate mortgages that they were told would go up in a few years. A few years passed, and their loans went up- probably on the low end of what they were told, given that interest rates are still very low,- and now they can't pay. To them I say, deal with it.

I'm sure there was some fraud, and I understand much of the concern around how mortgages are sold to Wall Street so fast that brokers have no incentive to confirm that buyers aren't lying. This is not cool and something should be done.

I'm also sure there are some who stretched just a little and bad things happened- layoffs, sickness, life, etc. and now they can't afford their homes. To them I say, I'm sorry. I hope they can turn their finances around and get back on their feet.

The question investors have to ask is- how much of an impact will all this have on global markets?

My guess is, not as much as the recent sell-off would suggest, and that is why I invested. Also, my sense is that valuations on stocks are reasonable, overall. Morningstar calculates that the markets are undervalued:

but you only have to look back to the early 2000's to see that things can get a whole lot worse...


But I think that the steep decline after 2000 was a reaction to ridiculous valuations and I do not believe that valuations are ridiculous or where earlier this year, so I see the recent quick sell-off as a good opportunity to invest. If only I had some extra cash!

Off course, I could be wrong.

New Orleans Satellite Photo!

I wrote a note on Zillow's blog and got some feedback about the New Orleans pictures on their site. Here is my earlier post about what I was looking for.

They noted the company that provides their imagery so I went to their site and dug around a bit and found a more recent image:


Compare the image above with the older one I took from Google maps- all the houses on the big field in the middle are part of the Musicians' Village.


The houses we worked on are not visible on these images, but over time, they will show up.

So I will try and get a post up soon about why I am loving the market these days. The 2 second summary is that when the market goes down for reasons largely unrelated to the earnings of the vast majority of the individual companies that make up 'the markets' this screams -to me at least... buy!

So I did. And I bought into the fund I was unable to add to in small amounts through Etrade, because Etrade fixed my problem. Strangely enough, they have yet to let me know. I just stumbled across it, when I went to buy some funds.

Finally, a WylieMoney fan asked for specifics about 0% credit cards with no balance transfer fees. It just so happens, I need one myself so I will be doing some research on that as well.

More soon!

Keeping an eye on the Musicians' Village in New Orleans

Earlier this year I was fortunate enough to be part of a team from Berklee College of Music that traveled to New Orleans to volunteer with Habitat for Humanity to help build a Musicians' Village.

I wanted to track the progress of the Musicians' village and the surrounding area so I took some screen shots of the area we were working in from Google Maps and from Zillow.

These sites update their satellite images infrequently so the last shots they have do not even show the houses that were already built when we were there. When they update their images, I'll zoom in and report back.

It will be interesting to track Zillow in particular as this site tracks home value information. I am not sure how much info they will gather on the Ninth Ward but I hope they track data from this area and I hope the value there grows!

Click here for the Google Maps View of where we worked in New Orleans!

This row of houses...


...are on the block indicated below:


Click here for a view of a nearby house in zillow.com.

The houses we worked on at the end of our week...


...are here:


The large cleared area is fast filling up with homes. Note the house showing $0. Directly across the street in the image, there is only grass, but there are already dozens of homes there worth a lot more than $0!


Here is a view from the middle of the field, back in June.

Golden Gate National Recreational Area

A reader known as Sir Ack wrote in and asked about my Bunker picture and pointed out that it did not look like something you would find in Golden Gate Park. He was right and right to guess that I meant Golden Gate National Recreational Area! Thanks for pointing out my mistake!

I think this is where the bunker is, but if anybody has more info, please let me know:

map loading...

Saving money on home improvement

I have several posts mulling around in my noggin but I have been too tired at night to get them out this week as we have been getting home from work and going straight to work, scraping the old peeling paint off the side of our house.


You can tell from the second picture how high I up I have to go to clean up the second floor windows and and digging into the old paint with a hand scraper that high up is kinda not cool.


But we have been scraping and painting one side of the house each year for three years. I have not priced out how much we are saving, painting ourselves, but I imagine it would buy a Wylie fund or two...


I just realized I do not have a good picture of either of the two sides we are done with. This one shows the front which we painted last year. The new color we are using is similar, but a bit more blue. You can also see the bags of leaves and pine needles we raked up, waiting to be taken to be composted by our town. Yes, we also do our own 'landscaping' which probably saves us enough for a few months of subsequent investments in a Wylie fund or two.

Walk for Hunger photos!

Yesterday, my wife and I did the Walk for Hunger. Click on any of the images for a larger version.

We got up at the crack of dawn and took the pike into town.

We parked the car and registered at the Boston Common. When you get up this early, the crowd is pretty small. 43,000 people did the walk yesterday.

We walked down Comm Ave and saw some dogs.
We saw metal dogs. See the ball?

We saw big French dogs!

Then we walked under Mass Ave.

Some chipper volunteers guided us through Kenmore square...

...past Fenway Park.

We ran into a friend from Berklee!

Near Boston College, we saw some geese.

All along the 20 mile walk there were signs teaching us about hunger...

...about ouch...

...and about Soylent Green.

I never did figure out what "sunscree" was.

But I always knew how far we had traveled.

This sign was at about mile 10, the halfway point. If the "It" he was referring to was "walked half way", then he spoke the truth! Hard to argue with a pointer like this, regardless.

Soon after, the trail leads to the Charles river, where Harvard and MIT teams practiced rowing.

The views of downtown Boston were amazing, even in cloudy, windy weather.

Along the Charles River, there is a place where water fowl rule!

It never rained, despite the dark clouds.

We approached the Mass Ave bridge and prepared to cross it.

Once across the bridge, we were in the home stretch.

Back down Comm Ave, we passed statue after statue.
I was jealous of this guy, and ready to sit down!

Near the end, the sun started to break through.

We could see the finish line. Where did all these people come from? (cheaters!)

At each checkpoint, we got a mark or stamp.


And in the end, we made it. There were 43,000 walkers
and together we raised over $3.3 million!

Until next year...