But my Bond Funds really are doing well...

[Shabber2]

Nothing I find ever seems to tell the real story about mutual fund gains. Example, this is some bond funds I moved into at the beginning of the year. It seems that charts, Google Finance, Yahoo Quotes, my online brokerage site all don't reflect the fact that in a mutual fund where a normal investor is reinvesting dividends, the actual yeilds are much higher than shown. These funds are up 6521/180000 or 3.62%. This is reality. For some reason, the online comunity never computes this stuff right. They just look at the differences in share price and run with it. Shouldn't there be a site that shows real data so we can compare apples to apples. What good is it not factoring in dividends? Help me understand. Am I crazy?

My stupid brokerage account shows the account only going up $5709. Ridiculous and WRONG!

CurrentBONDS Bought Bought Cost03/12/08DaysGainAnnualizedInterm BondVFITX $ 90,000 01/04/08 $ 11.44 $93,386.00 68 $ 3,386.00 20.19%Short BondVFISX $ 54,000 01/07/08 $ 10.69 $55,224.00 65 $ 1,224.00 12.73%TIPSVIPSX $ 36,000 01/07/08 $ 12.62 $37,911.00 65 $ 1,911.00 29.81% $ 180,000 $ 186,521 $ 6,521

[Shabber2]

Easier to read

BONDS Bought Cost BOUGHT on Value 03/12/08 Days Gain
Interm Bond VFITX $90,000 01/04/08 $11.44 $93,386.00 68 $3,386.00
Short Bond VFISX $54,000 01/07/08 $10.69 $55,224.00 65 $1,224.00
TIPS VIPSX $36,000 01/07/08 $12.62 $37,911.00 65 $1,911.00
$180,000 $186,521 $6,521

[W2R]

To me, the question is: What will the current economic mess really do to bond dividends? Predictions have been a little unsettling.

My Wellesley (~60% bonds) that I bought in January and February is maintaining its value nicely, and quarterly dividends are due later this month. Should be interesting.

[Alan]

Quote:

Originally Posted by Want2retire To me, the question is: What will the current economic mess really do to bond dividends? Predictions have been a little unsettling. My Wellesley (~60% bonds) that I bought in January and February is maintaining its value nicely, and quarterly dividends are due later this month. Should be interesting.

BTW, if you happen to look at your balance just before the dividends post you'll see that they have dropped by an amount equal to the dividend about to be paid.

For those that don't really know why this is, it is 2 reasons and dividend paying stocks behave the same way:

If a company or fund is worth $10B and they are about to give away $100M in cash then the value of the company is about to drop by $100M so the share price is adjusted to reflect this.

It also stops speculators from buying a load of shares just before the dividends are paid and then selling the shares immediately afterwards.

[W2R]

Quote:

Originally Posted by Alan BTW, if you happen to look at your balance just before the dividends post you'll see that they have dropped by an amount equal to the dividend about to be paid. For those that don't really know why this is, it is 2 reasons and dividend paying stocks behave the same way: If a company or fund is worth $10B and they are about to give away $100M in cash then the value of the company is about to drop by $100M so the share price is adjusted to reflect this. It also stops speculators from buying a load of shares just before the dividends are paid and then selling the shares immediately afterwards.

Thanks - - this is interesting to me, since this is the first quarter for me to see dividends from Wellesley and I did not know what to expect. Too bad! I had hoped that they were decreasing share price evenly (subtracting the dividends evenly) throughout the quarter. Thanks for the explanation, too.

Quote:

Originally Posted by freebird5825 this is one I own that I'm watching very closely... VWAHX yield TTM increased slightly since Dec 2007. approx 0.3% if memory serves correctly. YTD total return is -1.3%. no surprises.

Interesting.. thanks.

Maybe what we can expect from Wellesley, then, would be a drop in share price and not much change in dividend amounts. Sounds like a great time to buy would be coming up (though I really can't buy any more right now since I should stick with my plan).

[freebird5825]

re Interesting.. thanks.

Maybe what we can expect from Wellesley, then, would be a drop in share price and not much change in dividend amounts. Sounds like a great time to buy would be coming up (though I really can't buy any more right now since I should stick with my plan).

as painful as this market is, i'm looking at it as a real test of the portfolio AA. I'm no expert at this investing stuff. i just read a lot and go with what makes sense for me.

i am just chomping at the bit to buy more of existing MFs...but my disposable income now won't support that. not with school and income taxes looming over me poor little head. argh.

possibly one of the lesser known effect of FIRE? i.e less extra income for investing.

[Alan]

Quote:

Originally Posted by Want2retire Maybe what we can expect from Wellesley, then, would be a drop in share price and not much change in dividend amounts. Sounds like a great time to buy would be coming up (though I really can't buy any more right now since I should stick with my plan).

If you have your dividends re-invested then at least you have bought a few more shares

[freebird5825]

Quote:

Originally Posted by Want2retire To me, the question is: What will the current economic mess really do to bond dividends? Predictions have been a little unsettling. My Wellesley (~60% bonds) that I bought in January and February is maintaining its value nicely, and quarterly dividends are due later this month. Should be interesting.

this is one I own that I'm watching very closely...

VWAHX yield TTM increased slightly since Dec 2007. approx 0.3% if memory serves correctly.
YTD total return is -1.3%.

no surprises.

[TromboneAl]

What you want is a "Growth of $10,000" type chart. Here's an example from Vanguard:

growthChart.jpg

[jIMOh]

This is why an investor needs to track their own IRR. I have a few equity income funds and the same issue exists- quarterly dividend payments mean I did not lose as much as yahoo suggested I lost.

[Shabber2]

Quote:

Originally Posted by jIMOh quarterly dividend payments mean I did not lose as much as yahoo suggested I lost.

Exactly! So Joe investor looks at mutual fund performance, but is not seeing the whole story. This seems crazy to me.

[lsbcal]

If you are looking for solutions here are two:
1) see Morningstar yearly total returns and compare in a spreadsheet
2) Fidelity has a comparison tool that I just ran into today, hopefully this link works for you: Fidelity Investments: Just put in the fund you want to compare. I believe this shows results with distributions included.

[RockOn]

One of the only places I know that accurately keeps up with dividends and distributions in it's pricing is called Investors Fast Track. It is a great service but you pay for it.

Mutual Funds, Stocks, ETFs - Exchange Traded Funds


When you want it for free, you get exactly what you pay for, unfortunate as that is.

If anyone knows of a free source that keeps things up to date, I'd sure like to know about it. Look at the high yield bond funds, they pay a significant amount monthly, Yahoo mildly tries to keep up with that.

[Ronnieboy]

Are these bond funds in taxable accounts or through a IRA/401(k)?

[lsbcal]

Here is the M* site performance page: Vanguard Total Bond Market Index Report (VBMFX) | Total Returns

Of course, it does not give you a direct chart compare like the Fidelity page above.

[FIREdreamer]

I have been pretty happy with Wellesley myself, though I expected it to perform a bit better with bonds prices having gone up like they have in the past few months. However, not making much money is still better than losing a lot of it. The only thing is that Wellesley has performed so well since October (relative to the rest of my portolio) that I haven't been able to add money to it as per my asset allocation model. It's just too rich right now compared to everything else...

[Alan]

Quote:

Originally Posted by FIREdreamer I have been pretty happy with Wellesley myself, though I expected it to perform a bit better with bonds prices having gone up like they have in the past few months. However, not making much money is still better than losing a lot of it. The only thing is that Wellesley has performed so well since October (relative to the rest of my portolio) that I haven't been able to add money to it as per my asset allocation model. It's just too rich right now compared to everything else...

In the 5 years I have been investing in Wellesley I've done the equivalent of 8.8% year on year, but as you can see from my returns it has fluctuated by as much as 9%, although no negative returns on any given year.

2003 10.74%2004 12.60%2005 3.65%2006 11.39%2007 6.00%

[FIREdreamer]

Quote:

Originally Posted by Alan In the 5 years I have been investing in Wellesley I've done the equivalent of 8.8% year on year, but as you can see from my returns it has fluctuated by as much as 9%, although no negative returns on any given year. 2003 10.74%2004 12.60%2005 3.65%2006 11.39%2007 6.00%

Wellesley is up "only" about 0.6% since October 9, 2007 according to Quicken... I hoped it would have done a bit better (ha, expectations!), but I guess the 35% it holds in equities has been beaten down pretty good in the past few months... But I am still very happy with it. Plus I get new shares every 3 months and a nice dividend that keeps on going up..

[Alan]

Quote:

Originally Posted by FIREdreamer Wellesley is up "only" about 0.6% since October 9, 2007 according to Quicken... I hoped it would have done a bit better (ha, expectations!), but I guess the 35% it holds in equities has been beaten down pretty good in the past few months... But I am still very happy with it. Plus I get new shares every 3 months and a nice dividend that keeps on going up..

Yes, it is down at present. I'll be estimating my returns on it April 1st. Meanwhile the personal returns shown for me on the VG website show 1 year return 2/28/07 to 2/29/08 as 1.6% - but I don't intend making any moves. (Wellesley is about 1/3rd of my portfolio)

[W2R]

Quote:

Originally Posted by FIREdreamer Wellesley is up "only" about 0.6% since October 9, 2007 according to Quicken... I hoped it would have done a bit better (ha, expectations!), but I guess the 35% it holds in equities has been beaten down pretty good in the past few months... But I am still very happy with it. Plus I get new shares every 3 months and a nice dividend that keeps on going up..

My Wellesley is down a little bit from Jan 25th and Feb 14th, when I bought it (less than half a percent today, almost even yesterday). I think is holding its own very nicely in the crummy market we have had during the past month. It is definitely a "sleep at night" investment! That is what I was hoping, since I have 30% of my portfolio in it, and I am pleased so far.