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Re: CD's & Anti-Inflation strategies
Old 04-21-2005, 07:41 PM   #21
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Re: CD's & Anti-Inflation strategies

I suppose vanguard could tank and take part of it. I remember seeing something about investments being insured against bankruptcy types of things but honestly I'd have to look again. The stock and bond holdings are pretty dang blue chippy, so I'm not too worried about the piece parts. Not super worried about vanguard going out of business in the next 10+ years either.
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Re: CD's & Anti-Inflation strategies
Old 04-22-2005, 12:12 PM   #22
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Re: CD's & Anti-Inflation strategies

Quote:
Not super worried about vanguard going out of business in the next 10+ years either.
Are you taking a leap of faith th? It Prompts the question how would we know?
After all the rating agencies (Moody's S&P etc) 'helpfully' only responded to junking Enron and WorldCom - AFTER the scandals broke! We know the pressure and incentives on senior Execs to perform and hit the numbers is high, it focuses on the short term and may hurt long term investors.

Can't hit the numbers? Then get creative. Case in point recent weeks revelations from AIG where 'reinsurance' was used to make the health of AIG and many of their customers look better than it was. Or Coca-Cola where they robbed from future earnings.

How can we be sure we've seen the last of these?, senior Execs could be working on new masking tricks as we speak. And what's with 'deferred prosecutions', doesn't this really just hurt investors in general, while acting as get out of jail free cards for bad management?

Funds firms should be subject to the most stringent regulation with verifiable excess reserves, and guarantees not just for the creditors! Can we say this about Vanguard or any other fund?
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Re: CD's & Anti-Inflation strategies
Old 04-22-2005, 05:00 PM   #23
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Re: CD's & Anti-Inflation strategies

JohnR, "nothing ventured nothing gained". Wellesley
has been a steady performer for nearly 40 years.
You sound like my 89 year old depression era mom
who only bought CD's or EE bonds until I introduced
her to Wellesley. I use Wellesley and Penfed in my
taxable account for steady income with some growth.

Cheers,

Charlie
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Re: CD's & Anti-Inflation strategies
Old 04-22-2005, 06:37 PM   #24
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Re: CD's & Anti-Inflation strategies

Quote:
Are you taking a leap of faith th? It Prompts the question how would we know?
After all the rating agencies (Moody's S&P etc) 'helpfully' only responded to junking Enron and WorldCom - AFTER the scandals broke! We know the pressure and incentives on senior Execs to perform and hit the numbers is high, it focuses on the short term and may hurt long term investors.

Can't hit the numbers? Then get creative. Case in point recent weeks revelations from AIG where 'reinsurance' was used to make the health of AIG and many of their customers look better than it was. Or Coca-Cola where they robbed from future earnings.

How can we be sure we've seen the last of these?, senior Execs could be working on new masking tricks as we speak. And what's with 'deferred prosecutions', doesn't this really just hurt investors in general, while acting as get out of jail free cards for bad management?

Funds firms should be subject to the most stringent regulation with verifiable excess reserves, and guarantees not just for the creditors! Can we say this about Vanguard or any other fund?
Its a little bit different situation here. The owners of the mutual fund shares (i.e. the retail investors) legally own the underlying assets. Technically, each fund has a theoretically independent board of directors which can hire or fire a fund manager. So, in theory, the board of VWELX could fire Wellington Management and Vanguard and hire somebody else. If Vanguard went BK, it might be inconvenient, but the board would either hire a new manager, or distribute the aseets.

I personally think that you are far better off with Vanguard because it is a Mutual. That means that the fund shareholders technically own the company. IMO, mutuals are the best organizations to do business with, provided they take the fiduciary duty to act in the owners' best interests seriously. The big, well-run mutuals (like Vanguard, TIAA-CREF, MassMutual, USAA, State Farm, etc.) are all good examples of this.
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Re: CD's & Anti-Inflation strategies
Old 04-22-2005, 08:02 PM   #25
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Re: CD's & Anti-Inflation strategies

HI Charlie! If I was advising my 85 year old Mom,
I would put her into CDs and EE bonds

JG
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