Vanguard Report

12/1/2015

1

The Vanguard Account in Review

Andrew Koenig

December 1, 2015

Ancient history

• Account established in April 21, 2008 to

(re)invest money donated by Mike Agranoff

• Initial deposit: $74,000

• 1.5% of principal to be used to subsidize the

festival (i.e. 1.5% withdrawn twice a year)

12/1/2015

2

Choice of investment

• One‐stop shopping

– Splitting the investment requires rebalancing…

– …which requires a rebalancing policy…

– …and remembering to do it, getting it right, etc.

• Low expenses

• Moderate risk profile

Not trying to find “the best”

• It is impossible to predict the future

• Increasing return usually increases risk

• Aiming for the middle and avoiding major

mistakes typically beats ¾ of all investors

12/1/2015

3

Vanguard Wellington Fund

• In existence since 1929

• $88.8 billion invested

• 0.18% expense ratio

• 66% stocks, 34% bonds

Investment returns

12/1/2015

4

Account partition

• The Folk Project has more cash than it needs at the

moment

• Therefore, we do not physically transfer the festival subsidy

to our checking account

• Instead, we “reinvest” it in the same Vanguard fund

• Vanguard does not allow identical investments in the same

account, so I keep track

– Two parts: “festival subsidy” and “general funds”

– Twice a year (beginning of April and October) I “transfer” 1.5%

from “festival subsidy” to “general funds”

• In January, 2015, the Board asked me to transfer $10,000

from “general funds” to the checking account, which I did

on January 8

Dollars and cents

12/1/2015

5

As of end of November, 2015

• Total balance: $113,885.21

– $98,855.43 earmarked for future festivals

– $15,029.78 part of general funds

• If the festival were held today, the subsidy

would be $1,482.83.