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Investing Blog Roundup: Individual Stock Perks

This week I came across an interesting Bogleheads discussion about perks offered by certain companies to their shareholders.

For example, I learned that if you own shares of Berkshire Hathaway — even just a single Class B share, which currently runs just $125 — you can get an 8% discount on GEICO car insurance (unless you already have some other “affiliate” discount). For me, that’s a savings of about $65 per year — a pretty good effective dividend for a $125 investment!

I don’t usually think it’s a good idea to buy individual stocks, but I’ll be making an exception in this case.

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Investing Blog Roundup: Retiring Baby Boomers

This week, author/advisor Larry Swedroe provided an excellent answer to a question I see from time to time: Should we fear a stock crash as a result of baby boomers retiring and selling off their shares?

Swedroe writes:

“We’ll begin by pointing out that only unexpected events have an impact on stock prices. And if anything can be forecasted, it’s demographic data. You can be certain that investors in general are well aware of this trend, and thus have incorporated that knowledge and the expected effect of retirees’ equity sales into current prices.”

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Investing Blog Roundup: Index Fund Securities Lending

One question readers ask from time to time is how many Vanguard index funds manage to trail their index by an amount less than the fund’s expense ratio. To some extent, the answer is pure randomness. An index fund doesn’t typically hold every security in the index, in exactly the designated proportion, at every moment in time.

Another part of the answer, however, is that the funds earn some money from securities lending. Barry Barnitz has more on that topic on the Bogleheads Blog this week:

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Investing Blog Roundup: Investment-Induced Panic

This week, I especially enjoyed a MarketWatch article from Mitchell Tuchman pointing out a number of errors investors often make. This little gem stood out to me in particular:

“Your long-term investments shouldn’t be allocated in a way that pressures you to review them constantly. That’s not investing. It’s a slow-motion form of panic.”

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Investing Blog Roundup: The Downside of Short-Term Bonds

There’s no denying that interest rates are low right now. But that fact is not, in itself, a reason to think that rates are going up any time soon.

Using short-term bonds in your portfolio (rather than intermediate-term bonds) does indeed reduce the size of the loss you’ll incur whenever interest rates do rise. But, as Rick Ferri reminds us this week, using short-term bonds is not a clear “win,” given that you’ll be collecting less interest while you wait for rates to rise. And you could be waiting a very long time.

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Investing Blog Roundup: Bernstein on International Bonds and More

This week, Olly Ludwig of ETF.com has an excellent interview with Bill Bernstein about his recent book If You Can. The interview covers a range of topics from why Bernstein doesn’t recommend owning international bonds, to how he’s trying to get the message of sensible investing out to millennials.

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