Hedge against a 20% to 30% crash (market, buy, pension, sell)
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VWINX had a high of $28.97 and a low of $24.02 in 2022. That's a difference of $4.95. When we divide $4.95 by the low of $24.02, that gives us 20.60% spread. While that's not quite what I posted in my prior post, it's a heck of a lot greater than the 14.22% which you claim.
Yes - it is a retirement account - this particular account is the brokerage portion of my 457b (used to be Ameritrade and is now CS).
The original purchase was in Feb of 2020. The current value is with reinvested dividends, I assume, but the holding has continually showed a loss. The original purchase is at the bottom. I'm hoping I am just misreading this holding somehow - I have nothing else that looks like this (continuously showing a loss). You can see the Feb 2020 transaction at the bottom of this screen shot.
I guess I am going to have to call Schwab - it makes zero sense to me.
The screen shot that you posted shows your initial investment into VWINX plus the quarterly dividends for the period shown on that screen shot. The TOTALS for that time period are shown at the bottom. Looks like you lost about 10.53% for that time period.
BTW, that 10.53% is NOT an annual rate. It is simply the total that you lost ON PAPER for that holding for the 2+ years included on that statement.
As far as taxes are concerned, you don't get to claim a loss unless or until the holding is SOLD. However, you DO have to report the dividends as ordinary income in the year you received them if this were a taxable account.
It's very confusing to see how it is presented. He started to say "tax basis" and then said "well not tax basis, since this in not a taxable account, but an accounting basis"....which I still don't understand why it is presented like that. His final statement was in fact, that it IS worth less than what was put into it - and that is what I am banging my head against. Does he mean, possibly, after taxes, if this was taxable?? SO CONFUSING!
Your holding is worth less than what you paid for it. I don't understand why you don't understand this.
Basically, the value of your holding today is considerably less than what you paid for it. The interest/dividends that the holding produced over the years helps slightly, but you still have a substantial loss on your initial investment.
That's just the way investing goes. Sometimes you win and sometimes you lose.
Yes, he means "after taxes" if this were a taxable account.
As far as taxes are concerned, you don't get to claim a loss unless or until the holding is SOLD. However, you DO have to report the dividends as ordinary income in the year you received them.
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I don't report anything for taxes. This is not a taxable account.
Quote:
Originally Posted by Chas863
The screen shot that you posted shows your initial investment into VWINX plus the quarterly dividends for the period shown on that screen shot. The TOTALS for that time period are shown at the bottom. Looks like you lost about 10.53% for that time period.
BTW, that 10.53% is NOT an annual rate. It is simply the total that you lost ON PAPER for that holding for the 2+ years included on that statement.
This was the purchase, in the screen shot below. I have not added anything to it (the dividends reinvest as I stated earlier.)
So if I only look at the money that I put in, I have not lost. It's when I add in the dividends that have been reinvested, where it shows a loss. I *think* that is the explanation that makes some sort of sense to me. I still think I need to boot this holding and buy something else. And I still don't like they way they present it but oh well.
That's just the way investing goes. Sometimes you win and sometimes you lose. .
Oh stop. There is no need to be condescending . Of course I know that.
I don't have any other holding like this and it is such a highly rated fund (5 star) so I have a hard time understanding what the heck it is doing for me (obviously not much!). I keep reading online where it is such a great investment, and obviously my experience has not been that.
Last edited by ChessieMom; 02-26-2024 at 07:55 PM..
Oh stop. There is no need to be condescending . Of course I know that.
I don't have any other holding like this so I have a hard time understanding what the heck it is doing for me (obviously not much!) I keep reading online where it is such a great fund, and obviously my experience has not been that.
I didn't mean to be condescending. Sorry if it came across like that.
Vanguard Wellesley is USUALLY a good conservative investment for the long run. However, sometimes even the best investments can hit a bad spell. (Don't mean that statement to be condescending. Just fact.)
The "bad spell" that VWINX hit was due to its large (about 62%) bond holdings which got hammered in 2022 when interest rates rose rapidly, AND the fact that the stocks in VWINX had a bad year also. The year 2022 just wasn't a very good year for most investments.
I have not added anything to it (the dividends reinvest as I stated earlier.)
So if I only look at the money that I put in, I have not lost. It's when I add in the dividends that have been reinvested, where it shows a loss. I *think* that is the explanation that makes some sort of sense to me. I still think I need to boot this holding and buy something else. And I still don't like they way they present it but oh well.
Re the bolded: I don't see it that way. You initially paid $28.03 per share for VWINX a few years ago. Today, those shares are selling for $24.74 per share, so you are still down about 11% on what you paid for them.
However, the dividends have helped to ease the loss somewhat if we don't consider the "time value of money". "Time value of money" basically means that a dollar today is NOT the same value that it had at some time in the past or will have at some time in the future. In other words, the value of a dollar varies with time. Economics 101.
I didn't mean to be condescending. Sorry if it came across like that.
Vanguard Wellesley is USUALLY a good conservative investment for the long run. However, sometimes even the best investments can hit a bad spell. (Don't mean that statement to be condescending. Just fact.)
The "bad spell" that VWINX hit was due to its large (about 62%) bond holdings which got hammered in 2022 when interest rates rose rapidly, AND the fact that the stocks in VWINX had a bad year also. The year 2022 just wasn't a very good year for most investments.
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It's par for the course for me. I have the absolutely worst luck trying something new.
Re the bolded: I don't see it that way. You initially paid $28.03 per share for VWINX a few years ago. Today, those shares are selling for $24.74 per share, so you are still down about 11% on what you paid for them.
However, the dividends have helped to ease the loss somewhat if we don't consider the "time value of money". "Time value of money" basically means that a dollar today is NOT the same value that it had at some time in the past or will have at some time in the future. In other words, the value of a dollar varies with time. Economics 101.
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I paid 27.96, and yes, I understand all that. Next time I hear someone recommend VWINX I'm gonna smack them.
It's par for the course for me. I have the absolutely worst luck trying something new.
What Chas said is accurate.
I went on portfolio visualizer and the annualized returns since the beginning of February 2020 were 2.98%. From the beginning of March, 2020, the annualized returns were 3.70%
Your returns were probably in between 2.98% and 3.7% (annualized).
That's not great, but as Chas explained 2022 was a bad year for both stocks and bonds, which is not all that common. Bond interest rates are significantly better now, so if we get another bear market like we had in 2022, it should hold up better than it did in 2022.
It's actually a solid fund for what it does. It was in the 8th percentile in returns compared to similar funds in 2022. And although it did return 7% in 2023, it hasn't fully made up for its losses in 2022.
I'd say it's still a solid fund, but it's never going to have amazing returns. On the flip side, even though it lost 9% in 2022, that was pretty mild considered to more aggressive funds and even other funds that invest similarly.
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. Of course I know that. 
