Current Issue - September 2016

When I entered the securities industry in 1964, there were many old-line Boston investment houses that were referred to as investment counsel firms. These conservative firms welcomed families, forming decades-long associations. In these firms, the words speculation or performance rarely—if ever—came up. What I did hear often was regular reference to Ben Graham’s theories on the importance of dividends. In the Intelligent Investor, Ben wrote, 'One of the most persuasive tests of high quality is an uninterrupted record of dividend payments for the last 20 years or more. Indeed, the defensive investor might be justified in limiting his purchases to those meeting this test.'

With the business cycle looking especially long of tooth, it is more important than ever that you craft a portfolio entirely committed to positive cash flow in the form of dividends. On this front, I share some sad news. One of the few dividend-based funds in the world I advise for purchase, Vanguard Dividend Growth, became closed to new investors in July, constituting a 'Vanguard crisis' for me as well as for many individual investors. However, I have been anticipating this 'crisis at Vanguard' for a long time, and in this issue I write about what comes next for investors like you and me. Lastly, I reveal which sector I have recently made a six-figure addition to in my own personal holdings—this is the one area of the market where I still see significant income opportunities. More >>

Economic Analysis - September 2016

Each month, I provide you with an Economic Analysis supplement to the issue. This supplement provides you with a bird's eye view of the indicators that I monitor on a regular basis. The incisive, story-telling charts included in this supplement are updated every month and range from "The Leaders" to "World Currency Reserves/World Gold Reserves." There will always be great new material as well as timely reference dates, and my comments spell out the meaning of each chart for you. Download in pdf format.

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Pension Survival Increases Risks

August 26, 2016 “The public dispute over accounting standards is a signal to taxpayers, retirees and political reformers that fundamental flaws remain in how pensions measure their finances,” writes Steve Malanga in the WSJ. At issue, as he correctly points out, is the delusion that government pensions “on average estimate they will earn 7.6% a year on their portfolios.” Using […] More »