Friday, April 28, 2017

Politics: A time for change?

The election of Donald Trump as president of the United States and the Brexit vote came as a surprise to many and is triggering questions of whether this is a sign of broader changes in the global order.

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Wednesday, April 26, 2017

Exploring the Vanguard REIT Index Fund (VGSIX): A Comprehensive Overview

Real Estate Investment Trusts (REITs) have gained significant popularity among investors seeking exposure to the real estate sector without the hassle of owning and managing physical properties. The Vanguard REIT Index Fund (VGSIX) offers a convenient and diversified way to invest in a broad spectrum of REITs. In this article, we will take an in-depth look at VGSIX, its key features, benefits, and considerations for investors.



The Vanguard REIT Index Fund (VGSIX) is a mutual fund that seeks to track the performance of the MSCI US Investable Market Real Estate 25/50 Index. This index includes a wide variety of US-based REITs, providing investors with exposure to the real estate market's performance.

One of the most significant advantages of VGSIX is its diversification. The fund holds shares in numerous REITs spanning various sectors within the real estate industry, such as residential, commercial, industrial, and healthcare properties. This diversification can help spread risk and reduce the impact of a downturn in a particular segment of the real estate market.


VGSIX is managed passively, which means it aims to replicate the performance of its benchmark index rather than trying to outperform it actively. This approach typically results in lower expense ratios compared to actively managed funds. Investors can benefit from competitive returns while keeping costs in check.

REITs are known for distributing a significant portion of their income to shareholders in the form of dividends. VGSIX is no exception, making it an appealing choice for income-focused investors. The fund typically distributes dividends quarterly, providing a reliable income stream.

As a mutual fund, VGSIX offers high liquidity, allowing investors to buy or sell shares at the end-of-day net asset value. This liquidity provides flexibility to investors who need to access their investments quickly.

Like all investments, VGSIX comes with certain risks. Real estate markets can be influenced by economic factors, interest rate changes, and market sentiment. Additionally, individual REITs within the fund may have their specific risk factors. As with any investment, it's crucial for investors to assess their risk tolerance and financial objectives before adding VGSIX to their portfolio.

It's important to be aware that the income generated by REITs is subject to specific tax rules. Generally, REIT dividends do not qualify for the favorable tax rates applied to qualified dividends. Therefore, investors in VGSIX may face tax implications that differ from those associated with regular stock investments.

The Vanguard REIT Index Fund (VGSIX) provides a straightforward and cost-effective way to gain exposure to the real estate sector. Its diversified portfolio of REITs, passive management, and consistent dividend income make it a compelling choice for investors looking to add real estate assets to their investment portfolio.

Wednesday, April 19, 2017

Loyal 3?

Loyal3 will be dead on May 22, 2017, no more free service.

Thank you for being a LOYAL3 customer. We have important news: we've entered into a transaction that will provide LOYAL3 customers with a new, larger platform and more services.

Net worth March 2017

I just noticed that vanguard provides me detailed monthly document on my investment changes. I thought I will start adding it to my blog.

As of March 31, 2017:
Individual brokerage account: +11. 9% (month-on-month)
Individual brokerage account: +50.92% (quarter-on-quarter)

Established annual income: $336.57


Tuesday, April 18, 2017

Yield surge: Remember the real role of bonds

Bond rates continue to make headlines as the U.S. economy picks up steam and the Fed raises interest rates again.If you're feeling unsettled by the upward trend in yields, it might be helpful to remember why you invest in bonds: They can provide stability for your portfolio when stock market volatility increases.



More from vanguard

Monday, April 17, 2017

Update: Roth IRA

After some amount of research I have decided to open a Roth IRA account. I like the flexibility of withdrawing the principle without any tax implications. This gives me a chance to grow my dividends (without losing a big chunk to IRS). As a big fan of vanguard, it made sense that I open my Roth IRA @ Vanguard. I will be investing in Vanguard Wellington Fund Investor Shares (VWELX)

It offers exposure to stocks (about two-thirds of the portfolio) and bonds (one-third). Another key attribute is broad diversification—the fund invests in stocks and bonds across all economic sectors.

Monday, April 3, 2017

Mastering Your Investment Journey: The Four Pillars of Financial Success

Investing is a journey that requires careful planning, strategy, and discipline. Whether you're a seasoned investor or just starting, there are some fundamental principles that can guide your path to financial success. Let's delve into these principles in detail. 




Create Clear, Appropriate Investment Goals 
Every successful investment journey begins with a destination in mind. Without well-defined objectives, it's easy to drift aimlessly or make impulsive decisions. To create clear and appropriate investment goals, start by asking yourself what you want to achieve. Are you saving for retirement, a home, your children's education, or simply building wealth? By pinpointing your financial ambitions, you can tailor your investment strategy to align with these goals. It's essential that these objectives are both clear and realistic. Setting ambitious but achievable targets can motivate you to stay on course. Consider factors like your age, risk tolerance, and time horizon when defining your goals. Your goals will serve as your financial compass, guiding you through the sometimes turbulent waters of the investment world. 

Develop a Suitable Asset Allocation 
Using Broadly Diversified Funds Asset allocation is the cornerstone of a well-structured investment strategy. It involves distributing your investments across various asset classes like stocks, bonds, and cash. A suitable asset allocation is a powerful risk management tool. It helps you spread risk and seize opportunities while striving to achieve your goals. Broadly diversified funds play a pivotal role in this allocation. These funds offer exposure to a wide range of assets within a single investment, minimizing the risk associated with investing in individual stocks or bonds. Diversification is key to reducing the impact of market volatility and avoiding overexposure to any one asset class. Consider your risk tolerance and investment horizon when creating your asset allocation. Younger investors with a longer time horizon may opt for a more aggressive allocation with a higher proportion of stocks, while those nearing retirement might lean towards a more conservative allocation with increased bond exposure. The right allocation should strike a balance between risk and reward. 

Minimize Cost 
Investing comes with costs, but minimizing them is crucial for maximizing your returns. These costs can erode your gains over time. Expense ratios, commissions, and taxes are among the expenses that can eat into your investment returns. Opt for low-cost investment vehicles like index funds and exchange-traded funds (ETFs). These funds typically have lower expense ratios compared to actively managed funds. By minimizing costs, you leave more money on the table for your investments to grow over time. 

Maintain Perspective and Long-Term Discipline 
Market volatility is a natural part of investing. It's important to maintain perspective and discipline during these turbulent times. Short-term market fluctuations can lead to emotional decision-making, which can have a detrimental impact on your portfolio. A long-term perspective is key to weathering market ups and downs. Remember that investments are vehicles for wealth accumulation over the long haul. Stay committed to your strategy and avoid impulsive decisions. Timing the market is notoriously challenging, and making emotional decisions can result in missed opportunities. 

To sum it up, clear, appropriate investment goals, a well-considered asset allocation, cost-conscious investing, and long-term discipline are the cornerstones of a successful investment strategy. These principles can serve as your guide on your investment journey, helping you navigate the complexities of the financial world and work toward achieving your financial aspirations.

Saturday, April 1, 2017

Dividend Income Update – 2017 Q1

This quarter is very important and special for me. I have been dividend investing since 2015, but it's only the second time that I have been able to consistently save and add to my portfolio. Since, I have already written a post on my dividend income for March 2017, this post is mostly about my Quarter On Quarter (QOQ) performance.