Author Archive: indexfundfan

Disclosure of conflict of interest

When the client is ill-informed about certain products, does disclosure of conflict of interest by the advisor help? This paper, in the Journal of Legal Studies, has an interesting viewpoint, arguing that disclosure can have perverse effects instead. I think this is because the disclosure lulls the clients into thinking that they are in good hands and reduce their guard as a result.

The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest

Abstract: Conflicts of interest can lead experts to give biased advice. While disclosure has been proposed as a potential solution to this, we show that disclosure can have perverse effects, and might even increase bias. Disclosure may increase bias because advisors feel morally licensed and strategically encouraged to exaggerate their advice even further from the truth. As for those receiving the advice, proper use of the disclosure depends on understanding how the conflict of interest biased the advice and how that advice impacted them. Because people lack this understanding, disclosure can fail to solve the problems created by conflicts of interest.

Vanguard Diehards’ discussion on

The Vanguard Diehards have been known to be among the most investment-savvy group of people on the internet. Recently, a discussion on was started. The group’s opinion seems to be that it is probably OK as a borrower but most would not touch the lender’s side with a 10-foot pole. Post 18 sums it all:

Let me get this straight. I loan money to a bunch of people who have had financial problems, mostly from borrowing too much money, and hope they will pay me an outrageous interest rate and my loan back.

I would(n’t) touch that with someone else’s 10 foot pole.

Link (49322) HERE.

Goodbye EE-bonds

I submitted the sale of the last batch of EE savings bonds on Sunday from the TreasuryDirect website. TreasuryDirect is really efficient as the money was already credited into my Presidential checking account when I checked on Monday morning.

These EE savings bonds were bought at a time when TreasuryDirect still allowed the use of credit card purchases and they earned me quite some handsome credit card cashback at that time (I believed it was 1.5% on my American Express Costco card). However, recently, the California tax-exempt bond fund yields have become too attractive to ignore, and I no longer find it worthwhile to hold on to the EE savings bonds. I therefore decided to cash them out and will be consolidating the money into a mixture of the California intermediate-term and long-term tax-exempt bond funds at Vanguard. Consolidating the money with Vanguard would also hopefully help me to qualify for Flagship sooner.