More Plain Talk from Vanguard
The Vanguard Group recently added two new brochures to their Plain Talk Guide library. One addresses the market and aims to help quell the fears of jittery investors. The other looks at estate planning. Both are free for the asking and worth the time it takes to read.
Even though the market is up 20 percent from its October lows, over the past few years, investors have been a part of one of the biggest market downturns in history. And when the market turns bearish, so do many investors.
But if you've forgotten that bear markets---even ugly ones--- are to be expected and are part-and-parcel of what makes the market's tick, Vanguard's eight-page Plain Talk guide, titled Perspective and Planning: A Prescription for Market Jitters, might help to remind you it's all a part of the process.
One of the important things the piece points out are that there are differences between investing, saving and gambling. "Investing," it reads, "Is a deliberate process that takes time and patience.
"Saving is for money that you can't afford to see decline in value.... Gambling is speculating, or taking even greater risks, to win back the money you've lost. That may be a tempting idea for stock market investors who've lost big. But using the market to play catch-up is gambling, not investing. "
Vanguard's other brochure, looks at estate planning. While the term can be off-putting, the bottom line is most of us have estates of one size or another. For instance, if you own your home, have some investments and a retirement account or two, you've got an estate. If you live in a rented apartment, collect antiques and keep your money under the mattress, you've got an estate as well.
The reason we need to think about estate planning is to insure that everything --like all of the property and investments you own while you're alive--- gets dispersed to whom and where ever you'd like after your death.
While preparing a will, creating trusts, naming beneficiaries and tax planning are all parts of an estate plan, there are other things to consider in your estate plan. Some of them include:Advanced directives for health care. In layman's terms that's a living will. It's intent is to let doctors know the kinds of life-sustaining care you'd like if unable to make that decision on your own.Health care power of attorney. This allows a close friend or family member to make decisions about your medical care if you're not able to.Financial power of attorney. A document that arranges for the handling of your affairs and management of your assets.Letter of Instruction. Things such as the kind of funeral arrangements you'd like along with other particulars that may not have been covered in other documents can be included in a letter of instruction.
So no matter the size of your estate, Plan Your Estate, can be a helpful guide for those who currently don't have an estate plan or who are in the process of creating one.
To obtain a free copy of either one these two Vanguard Plain Talk guide books, A Prescription for Market Jitters, or, Plan Your Estate, call 1-800-962-5261, listen for option 4, and ask the operator to send you the brochures. Or for additional information, visit Vanguard's web site at: www.vanguard.com/?plaintalk.
Dian Vujovich is a nationally syndicated mutual fund columnist, author of a number of books including Straight Talk About Mutual Funds (McGraw-Hill), and publisher of this web site.
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