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Old 12-17-2016, 07:15 AM
 
6,616 posts, read 3,746,469 times
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Quote:
Originally Posted by mysticaltyger View Post
Wellington is NOT completely closed. You can buy the fund if you open an account directly with Vanguard.
Yes, that's what I said. I don't have an acct at Vanguard, so I can't get it.
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Old 12-17-2016, 07:23 AM
 
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Quote:
Originally Posted by saralvr View Post
I know this is a dividend fund. We had some extra money around and opened this up about 5 months ago. Constantly going down. It got such high reviews. With everything going up, why is this down? Any recommendations? I know it's just a very little bit we put into this, but it's obviously not the right tool. Thanks
It is not a dividend fund but a balanced fund. 40/ 60 equity/bonds. Bond values are going down. If all you wanted was income from it you don't have to be concerned about its value. It will still yield income which might even get higher with rise in interest rate. Hold on to it.
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Old 12-17-2016, 07:44 AM
 
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until the income does not keep up with rising inflation and you have to sell shares when they are lower to fill in the gap .there is no such thing as interest rate hikes and dividend increases ,reductions or suspensions matching your personal cost of living .

there is no such thing as only looking at income when spending down and ignoring share value .

this is why retirement income is based on a percentage of the total portfolio not just cash flow from it .
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Old 12-17-2016, 08:17 AM
 
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Quote:
Originally Posted by mathjak107 View Post
until the income does not keep up with rising inflation and you have to sell shares when they are lower to fill in the gap .there is no such thing as interest rate hikes and dividend increases ,reductions or suspensions matching your personal cost of living .

there is no such thing as only looking at income when spending down and ignoring share value .

this is why retirement income is based on a percentage of the total portfolio not just cash flow from it .
There are lots of factors that go into managing investment. a lot depends on the size of the portfolio and source of income. It is a mistake to make decisions about a single investment in isolation. But in isolation Wellsley is a sound investment and its value alone today should not be a consideration to sell it.
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Old 12-17-2016, 08:21 AM
 
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i wouldn't sell it either . but i would watch it carefully over time to make sure it is still meeting your goals . as i said , over time a falling share price is bad news when spending down regardless of any dividends or interest .

portfolio total value becomes less important if all you are doing is subsidizing other income from it vs taking full 3-4% withdrawals to live on .

if we are in the early stages of a long crawl back up in rates then balanced funds may no longer be the best options unless they can go anywhere and in to any type of fixed income investments . many can't as the fund bylaws restrict what they can own . some types of income funds do better than others if rates and inflation rise .

what looks interesting now is i see a barbell of short term bonds/cash and long term bonds seem to be doing better than the intermediate term bond funds and the barbell has the same average duration . 50% of the bond budget in one end and 50% in TLT in the othe end has the same duration as 100% of the money in an intermediate term bond fund . the barbell has a higher yield .

the longer term bonds also fly fighter cover and have a lot more lifting power in a flight to safety .

so there are options if rates rise much longer but investing is not going to likely be as simple as a 35 year bond bull market allowed it to be .

Last edited by mathjak107; 12-17-2016 at 08:32 AM..
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Old 12-17-2016, 08:28 AM
 
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Quote:
Originally Posted by mathjak107 View Post
i wouldn't sell it either . but i would watch it carefully over time to make sure it is still meeting your goals . as i said , over time a falling share price is bad news when spending down regardless of any dividends or interest .

portfolio total value becomes less important if all you are doing is subsidizing other income from it vs taking full 3-4% withdrawals to live on .

if we are in the early stages of a long crawl back up in rates then balanced funds may no longer be the best options unless they can go anywhere and in to any type of fixed income investments . many can't as the fund bylaws restrict what they can own . some types of income funds do better than others if rates and inflation rise .
Investments style vary. There is something to be said to make wise investment decision, invest regularly, keep it simple, and don't time the market. This is time tested strategy.
But of course you can do otherwise.
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Old 12-17-2016, 08:34 AM
 
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every asset eventually has it's day in the sun . it is just some cycles can take very long periods of time .
perhaps longer than many of us retirees have left lol .

think about it , if you bought a 50/50 mix of gold and the s&p 500 on the worst day for gold back in the 1980's when it hit 800 bucks but rebalanced every year , you would have seen the following results.

when gold peaked a few years ago your gold would have beaten the s&p500 by a fraction of a point until gold fell again .

so if you had decades , even buying a poor choice of investment like gold at the worst point in time still had it turn out okay if you stayed the course .

the only question is if you have he time .

none of this was a problem when bonds added value to a portfolio which was all my investing life with just a few speed bumps .

but since bond rates turned the corner they have been taking away from stocks advances . while shorter term it isn't a problem , it can be a real problem if this is the real deal and is a long term trend back up .

except for 1994 since the 1980's every time the fed raised short term rates 1% or more in a year intermediate term and longer term bonds actually went up in value . that is very different than today , where short term rates barely moved but bonds got clobbered since the rates reversed 3 months ago .

Last edited by mathjak107; 12-17-2016 at 08:48 AM..
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Old 12-17-2016, 09:11 AM
 
Location: Haiku
4,060 posts, read 2,572,689 times
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Quote:
Originally Posted by TuborgP View Post
I think people have different definitions of what level a rebound is to or how high this current uptick will reach. Much of the world is still dealing with either negative or much lower rates.
Constructing a portfolio that is dependent upon bonds, or stocks for that matter, doing something in particular in order to be successful is not a good strategy. The key is to have a portfolio that will meet your goals regardless of what bonds or stocks do. Or perhaps I should say, that will have the highest chance of meeting your goals. Betting on interest rate movements is just that - a bet. Are you feeling lucky?
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Old 12-17-2016, 09:37 AM
 
Location: SoCal
13,225 posts, read 6,320,879 times
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Quote:
Originally Posted by mathjak107 View Post
it isn't judging it on 5 months performance . it is judging it on what may be an end the last 3 months to a 35 year old trend of falling interest rates .

that can have a huge weight attached to a balanced fund going forward. no matter how much rates rise on the new bonds the fund buys you will always be well behind the curve if rates trend up to historical norms and you already own it .

in times of rising rates separate equity and bond funds may be a better choice since you can control the types of bond funds you are in while the balanced fund may be restricted from certain types that do better when rates rise .

time will tell if this is the start of a new trend back up or only a bump in the road on the way lower . but i think you need to stay dynamic and play the cards as they are dealt .
This is why when people post the performance in the last 15 years, it could be misleading. Past performance is no guarantee for future performance.
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Old 12-17-2016, 09:54 AM
 
29,775 posts, read 34,863,854 times
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Quote:
Originally Posted by TwoByFour View Post
Constructing a portfolio that is dependent upon bonds, or stocks for that matter, doing something in particular in order to be successful is not a good strategy. The key is to have a portfolio that will meet your goals regardless of what bonds or stocks do. Or perhaps I should say, that will have the highest chance of meeting your goals. Betting on interest rate movements is just that - a bet. Are you feeling lucky?
Ummmm. Think about what you said. Of course you construct a portfolio to meet your goals and aren't bonds and stocks some of the prime construction tools? Luck who said luck? My post retirement decision is now what to put new money in that is not on a normal schedule of contributions but may be on a frequent but non scheduled basis. It wasn't bond or stocks last week but cash. Also how did U come up with this response from my post?

Last edited by TuborgP; 12-17-2016 at 10:11 AM..
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