Vanguard Wellsley Fund (2015, retiree, costs, withdrawal)

[mathjak107]

depending what your duration was you might have lost as much as 15% or more the last 3 months

[TuborgP]

Originally Posted by mathjak107

depending what your duration was you might have lost as much as 15% or more the last 3 months

From January 2016 or just the last three months. And those are long term bonds. I did reference Total Bond and Wellesley as my reference points

[mathjak107]

Just the last 3 months . Check out TLT . The longer you went out the more you got hammered .

[DaveinMtAiry]

Originally Posted by TuborgP

I don't mean to seem rude, but what bond crash? Vanguards Total Bond and Wellesley are still up for the year and their is intact. Neither has gone negative for the year and they are income funds. So whether it be interest, dividends if they are being reinvested you are buying them at a cheaper price. What is riskier is Fidelity Growth company which can produce violatile capital gains with minimal dividends. The fluctuations in NAV have different consequences depending on the type fund.

For those contributing monthly to a bond fund and having distribution redistributed the longer term trading range can be more important than fund price at any given time.

I'm talking about the last 3 months, right after I made the moves LOL. My Vanguard intermediate corporate bond fund is down 3.7% the last 3 months, Wellsley is showing 0.00% for the last 3 months, no doubt the bond portion pulled it down. MJ's pick FTBFX is down 2.2% VG Total Bond Fund is down 3.45%

So what can we expect going forward?

[mathjak107]

ftbfx is up almost 5% still ,compared to near 1% for the other total bond funds .

[DaveinMtAiry]

OK OK we get it, you picked a good fund.

Now how about helping me understand where bond returns are likely to go moving forward.

[mathjak107]

i think lower as my guess . i think trump mania blew inflation expectations way out in left field .

i think the surprise will be gold and long term bonds will do very well . the dollars value is way over the top and when that comes down gold will go higher .

lets see if i am right for 2017 .

[Harpaint]

Originally Posted by mathjak107

not much different . look at a 30 year bond as an example .

if rates rise a bond fund loses nav but the interest rate increases over time . you will still be behind the curve but the rate will increase .

your bond at maturity won't lose nav but the interest rate never goes up and interest rates and inflation usually move together so getting back your 1k and having it buy 500 bucks worth of stuff 30 years later is still a loss .


the same apply's to the intermediate term bonds . if rates rise ,interest on the funds rise even though the nav falls . your bond never increases and getting that 1k back 10 years later still loses purchasing power.

at the end of the day a bond fund is just a collection of individual bonds that are always maturing and always being bought

I don't buy 30 yr bonds. Too long. I just pick up fairly short term bonds once in a while when they are paying well and when there aren't stocks that look particularly promising at the moment. Corporate bonds.

[mathjak107]

two different reasons for owning bonds . long term treasury bonds are for gains in a down market not income . the bonds you speak of have no lifting power to overcome stock losses when the business cycle says it is bear market time . .

you buy short and intermediate term bonds for either income or as a temporary hedge against market drops , not over coming losses and producing gains .

two different stratagey's with 2 different purposes

[Harpaint]

I prefer stocks that pay good dividends over bonds. They give a tax advantage on the dividend, as well as price gains. But I know a lot of investors don't buy individual stocks.