Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
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.
Apparently the returns have not been enough to put it in the black as I have a loss, after 4 years.
Investment + reinvested dividends = $12,401.15
Market value = $11,130.60
Not solid in my book, but obviously the timing of my purchase is what did it in for me.
Apparently the returns have not been enough to put it in the black as I have a loss, after 4 years.
Investment + reinvested dividends = $12,401.15
Market value = $11,130.60
Not solid in my book, but obviously the timing of my purchase is what did it in for me.
It could be worse. I have over $100,000 in Wellesley and am down about $7200. Fortunately, I have other investments because I don't have a pension, and clearly I suck at this.
It could be worse. I have over $100,000 in Wellesley and am down about $7200. Fortunately, I have other investments because I don't have a pension, and clearly I suck at this.
Thankfully you didn't put that 100k in when I put my 10k in or else you'd be much worse off.
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 statement shows you paid 10k . but look at the value today …that’s your whole deal
forget about how they are tracking cost , they are tracking cost by adding over 3 dollars a year to your cost basis and taking 3 dollars off the share price at the same time , the same as cost basis in a taxable account would be added to cost basis knocking it from the 27 range to the 24 range
so forget what they show as cost basis .
your cost is what you paid with your actual outlay to buy it was vs what it’s worth today
share price reduced over the years from the payouts by about 3 dollars and the number of shares increased by the same amount over the years , leaving a gain between what you took out of pocket to buy it and its total value today.
on a year to year basis it’s over a 3% gain on average a year. of course the day you buy makes it slightly different but pretty close
so the return isn’t great but it certainly was positive.
this is an example of why dividends are not free money .they are withdrawals and without gains to offset them it takes the share price lower with each payout .
so if it pays out 3 dollars a year and you reinvested it , then you have 3 dollars more in shares and a 3 dollar increase in shares , and a 3 dollar drop in share price for it .its zero return ..
well wellesly paid out more then it took in so as an example let’s say it increased 3 dollars a share and paid out 4 dollars so you bout 4 dollars worth of shares .
the share price falls by 4 dollars and you buy 4 dollars in more shares , but if the stock only increased 3 dollars they are showing your cost basis but 4 dollars in driving your cost valid up 4 dollars , yet you actually are up 3 dollars that year
Last edited by mathjak107; 02-27-2024 at 01:27 AM..
if wellesley was in a taxable account and you had 100 dollars in it ,they would pay out 3 dollars …let’s make it easy and say it was 10 .00 a share
you are taxed on those 3 dollars , yet your share price fell by an equal amount but you bought 3 dollars more in shares reinvesting and all you have is your 100 dollar investment back and a tax bill .
let that sink in as it’s key to what is going on .
so that 3 dollars is added to your cost basis as new money added . it really isn’t new money added , they just changed the make up of your same hundred dollars to a lower share price , but more shares .
so now when you look you see they added 3 dollars to your cost making it 103 .00
yet with no gains all your investment is worth is the same 100 so it shows a loss of 3 dollars .
you didn’t lose a thing it’s the same 100 dollars but to offset the fact you paid taxes on a 3 dollar gain you didn’t get you now have a 3 dollar loss showing .
that is what is going on here .
there is no loss … but they are using the same math in your retirement account to track cost even though you didn’t pay taxes .
it is irrelevant in an ira what cost is so they can track it the same way .
the loss isn’t a loss in this case ..
your whole situation is your initial purchase with new money vs what the account is worth down the road . you may not be able to. tell from the way it’s tracked as it counts all the reinvested money like itcwouldcnewcmoney you are laying out yet it’s not the case .
you need to use an outside source to see how you actually did , like portfolio visualizer or morningstar .
with wellesley this tracking will standout like a sore thumb because they actually paid out more then the fund gained over the years so strange things happened to the share price and it fell instead of over coming the payouts , other wise you wouldn’t have noticed any losses in cost basis but they are still there in other funds as well.
so forget all the reinvesting as that did nothing but move what you had around arraign it differently. nothing gained or losses there .
only go by let’s call it your own dollars you spent out of pocket vs current value of the investment
Last edited by mathjak107; 02-27-2024 at 03:09 AM..
Apparently the returns have not been enough to put it in the black as I have a loss, after 4 years.
Investment + reinvested dividends = $12,401.15
Market value = $11,130.60
Not solid in my book, but obviously the timing of my purchase is what did it in for me.
in this case in the retirement account its is only the investment you have as a cost not the reinvested dollars which is why you show the loss .
its only your invested capital that is your cost basis for the reasons i described above.
no additional money other then the investment you made came out of your pocket .
the dividends were a withdrawal that you simply put back in effect so they were not adding more money, they were rearranging your existing money
think of it as if you had 100 bucks in the bank and the bank gave you 3 dollars back and subtracted it off your balance .you decide to put it back in so you have your hundred bucks back only you got taxed on the 3 dollars like it was a gain, but it wasnt. all you have is your same 100 bucks .
so that is what happens with a dividend and capital gain distribution in a fund .
so they raise your cost basis to 103.
if you sell for the same price you would show a 3 dollar loss because they raised your cost basis . but you didn’t really lose a thing
Last edited by mathjak107; 02-27-2024 at 04:25 AM..
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.
Thanks. I agree with your assessment of VWINX. Another year like 2022 for VWINX is quite unlikely, especially anytime soon, IMO. When bonds are returning essentially nothing in dividends, as they were in 2022, there's only one way for them to go in value and that is DOWN. Now, commercial bonds are returning roughly 4% to 4.5% which is much closer to the "normal" for the past 70+ years.
if wellesley was in a taxable account and you had 100 dollars in it ,they would pay out 3 dollars …let’s make it easy and say it was 10 .00 a share
you are taxed on those 3 dollars , yet your share price fell by an equal amount but you bought 3 dollars more in shares reinvesting and all you have is your 100 dollar investment back and a tax bill .
let that sink in as it’s key to what is going on .
so that 3 dollars is added to your cost basis as new money added . it really isn’t new money added , they just changed the make up of your same hundred dollars to a lower share price , but more shares .
so now when you look you see they added 3 dollars to your cost making it 103 .00
yet with no gains all your investment is worth is the same 100 so it shows a loss of 3 dollars .
you didn’t lose a thing it’s the same 100 dollars but to offset the fact you paid taxes on a 3 dollar gain you didn’t get you now have a 3 dollar loss showing .
that is what is going on here .
there is no loss … but they are using the same math in your retirement account to track cost even though you didn’t pay taxes .
it is irrelevant in an ira what cost is so they can track it the same way .
the loss isn’t a loss in this case ..
your whole situation is your initial purchase with new money vs what the account is worth down the road . you may not be able to. tell from the way it’s tracked as it counts all the reinvested money like itcwouldcnewcmoney you are laying out yet it’s not the case .
you need to use an outside source to see how you actually did , like portfolio visualizer or morningstar .
with wellesley this tracking will standout like a sore thumb because they actually paid out more then the fund gained over the years so strange things happened to the share price and it fell instead of over coming the payouts , other wise you wouldn’t have noticed any losses in cost basis but they are still there in other funds as well.
so forget all the reinvesting as that did nothing but move what you had around arraign it differently. nothing gained or losses there .
only go by let’s call it your own dollars you spent out of pocket vs current value of the investment
Quote:
Originally Posted by mathjak107
in this case in the retirement account its is only the investment you have as a cost not the reinvested dollars which is why you show the loss .
its only your invested capital that is your cost basis for the reasons i described above.
no additional money other then the investment you made came out of your pocket .
the dividends were a withdrawal that you simply put back in effect so they were not adding more money, they were rearranging your existing money
think of it as if you had 100 bucks in the bank and the bank gave you 3 dollars back and subtracted it off your balance .you decide to put it back in so you have your hundred bucks back only you got taxed on the 3 dollars like it was a gain, but it wasnt. all you have is your same 100 bucks .
so that is what happens with a dividend and capital gain distribution in a fund .
so they raise your cost basis to 103.
if you sell for the same price you would show a 3 dollar loss because they raised your cost basis . but you didn’t really lose a thing
Yes I already got all that. And I am referring to it as a loss as the Schwab guy I talked to last night, explained why it was, so I suppose I am thinking about it from his POV. I totally understand dividends so don't think that I don't.
Yes I have more in it than *I* put in. I certainly know that and I get the whole tax thing as well.
Maybe this is a better way for me to explain it to myself LOL - the fund did not make enough to pay for the dividends that were issued. This fund is considered an income fund so maybe I should not have had it in my portfolio to begin with. I think I will hold it though, I would hope that the interest rates will start reversing direction here soon.
Bond funds (I think VWINX is about 2/3 bonds) have always been an enigma to me and I have tried to stay away from them because of that. I totally did not understand this one when I bought it, but I sure do now.
I'm not happy, but not devastated either. I also invested in VTSAX and VBIAX. Why both? I have ADHD. lol. In addition to VG, I have investment accounts with Fidelity, TRP, TIAA CREF and TSP. The latter two are employer retirement accounts. I have bonds with Treasury. I have cash in my local credit union and CFG bank, although I recently closed out an account with another credit union.
"Oh, look! A squirrel!"
I'm not happy, but not devastated either. I also invested in VTSAX and VBIAX. Why both? I have ADHD. lol. In addition to VG, I have investment accounts with Fidelity, TRP, TIAA CREF and TSP. The latter two are employer retirement accounts. I have bonds with Treasury. I have cash in my local credit union and CFG bank, although I recently closed out an account with another credit union.
"Oh, look! A squirrel!"
LOL!
I have Schwab and Fidelity, and I did have TD Ameritrade (which is my brokerage option portion of my 457b) - which got rolled into CS - thankfully! One less place to be checking
I also still have my 457b account - I've not done anything with it since retiring. It's doing fine, it's pretty conservative and doesn't "bounce" much so I am leaving it for now.
I have CDs, treasuries, iBonds. 3 credit unions , 3 banks (to be fair, one is just for my Paypal/eBay account and one is for my HELOC - now paid off -they are both very small accounts).
And let's not talk about how many positions I have. I would get a headache. Too many years of not knowing what I was doing LOL. My son will be cursing me when I am gone.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
, 3 banks (to be fair, one is just for my Paypal/eBay account and one is for my HELOC - now paid off -they are both very small accounts). 
