"Pssst!! Wellesley"

[W2R]

Quote:

Originally Posted by Da Nag Can somebody explain the difference between VWIAX and VWINX? I though I'd read somewhere they are identical, with the only difference being a lower expense ratio on VWIAX - which is available through my employer's plans. Is this correct?

Quote:

Originally Posted by Want2retire It's a nice, conservative fund, around 38% equities (the exact percentage changes now and then). Over the years the share prices have kept up with inflation pretty nicely. It sheds some nice dividends, too. https://personal.vanguard.com/us/funds/snapshot?FundId=0527&FundIntExt=INT (VWIAX) if you have over $100K to invest in it, or https://personal.vanguard.com/us/funds/snapshot?FundId=0027&FundIntExt=INT (VWINX) for those with less than $100K in Wellesley. So, for some of us it is a nice ER investment core. I have 30% Wellesley, as per my plan, and I am very happy with it. This is not a fund for brave, aggressive, young investors in the accumulation phase. This is a fund for cautious, conservative ERs.

I labeled each, which I believe will answer your question. Vanguard gives lowered expense ratios for Admiral shares ($100K minimum) on some of its funds.

[Da Nag]

Quote:

Originally Posted by Want2retire I labeled each, which I believe will answer your question. Vanguard gives lowered expense ratios for Admiral shares ($100K minimum) on some of its funds.

I've nowhere near $100K invested in VWIAX currently...so I'm assuming they make exceptions for employer plans, perhaps treating the entire plan in considering the $100K minimum?

Thanks for the links - I've seen those pages before but didn't drill down into the links they contain where things are explained more clearly. In particular, this page gives a clearer picture of Vanguard's Admiral Share funds in general.

[ChrisC]

Quote:

Originally Posted by REWahoo You can thank Unclemick for this one. It is a reference to investing in dividend paying stocks - picture a Norwegian widow waiting by the mailbox for her quarterly check...

But why a Norwegian widow? The picture I'm supposed to get is of a widow that's attractive looking, orphan/waif-like looking, homely-looking, plump-looking or what, with blond hair and blue eyes? I'm just trying to figure out what image I'm supposed to conjure up? I have serious cultural and educational gaps in my early childhood education, so occasionally there are some phrases that many of you understand but I just don't get.

[CitricAcid]

I do not know how your specific company/fund does it, but often in cases similar to this, you can buy into the admiral shares because your company as a whole has over $100,000 giving them access to them.

[Marquette]

Letters to the Editor

Looks like it was because she was Norwegian and a widow.

[REWahoo]

Quote:

Originally Posted by ChrisC But why a Norwegian widow? The picture I'm supposed to get is of a widow that's attractive looking, orphan/waif-like looking, homely-looking, plump-looking or what, with blond hair and blue eyes? I'm just trying to figure out what image I'm supposed to conjure up?

That's the beauty of it - the image is only limited by your imagination. (Psssst. I think she's 28 and blond...)

Quote:

Originally Posted by ChrisC ...occasionally there are some phrases that many of you understand but I just don't get.

Maybe this thread will help:http://www.early-retirement.org/foru...rum-34884.html

[REWahoo]

Quote:

Originally Posted by Marquette Letters to the Editor

Posting a link to this guy without a warning message is a dastardly deed...

[Marquette]

Quote:

Originally Posted by REWahoo Posting a link to this guy without a warning message is a dastardly deed...

I don't know who it is. I was just posting the first relevant Unclemick story regarding the widow.

To save anyone else, though, here's the c&p

Quote:

I received this letter from Unclemick. He refers to himself as Unclemick - the Norwegian widow dividend guy. The Norwegian widow lived on dividend checks. She was the one person in his neighborhood who always paid the kids with cash as soon as they finished mowing her lawn.

[cute fuzzy bunny]

Quote:

Originally Posted by ats5g There is nothing all that special about Wellesley, except that you get it all in one fund.

There is ONE rather special thing about it.

"Okay Gramma, lets talk about this mutual fund we think you should invest in. It invests in nice blue chip companies, all of which you've heard of, that pay good dividends, and lots of good high quality bonds. There are a whole bunch of fund managers from several companies who decide which stocks and bonds to buy and when to sell them. The company charges only a tiny amount to do the management vs most funds. Its been around for almost 40 years and has returned more than 10% a year. In the last ten years its returned more than 6% a year while the stock market has gone nowhere. Recently its paid a dividend in the 4-5% range and we'll arrange to just have that put into your checking account automatically. You spend it. Thats it."

or

"Okay Gramma, we're thinking about putting you into a 65% mix of the intermediate bond index fund and 35% of the large capitalization value stock index fund. These indexes are managed by nobody. They're very inexpensive and very efficient. Once a year we'll move some money from one to the other to keep it at 35/65. If I die in a car wreck, here's what you'll need to do..."

[cute fuzzy bunny]

Quote:

Originally Posted by Marquette I don't know who it is.

He's JWR1945, he and Ho$uc combine to form the dynamic troll duo. JWR is the "numbers guy", while Ho$uc is...well..we know what he is.

By the "numbers guy" I mean he data mines about 7% of a data set that conforms to whatever wacky point Ho$uc is trying to make, then runs it through unrelated and invalid formulas, rounds off numbers to 3 or 4 decimal places...on either side of the decimal...and then spits out the numbers while declining to explain how he produced them.

[W2R]

Quote:

Originally Posted by REWahoo That's the beauty of it - the image is only limited by your imagination. (Psssst. I think she's 28 and blond...)

I always pictured her as have fairly short, straight, richly brunette hair with piercing, sea-green eyes and wearing jeans and a bluegreen plaid shawl (for some reason). Age? Maybe 38.

A sailor's widow with a third story window overlooking the sea, near the coast of Norway. She walks to her mailbox with two perfectly behaved, silent, blond toddlers in tow, with huge sea-green eyes as well. They wait and watch as she opens the mailbox, and pulls out the big, fat, white envelope containing her dividend check.

[unclemick]

Hmmm - like the myth of the dingy teenage Blond posting from Missoula -

the mystery is fun.

heh heh heh - my lips are sealed.

[Dawg52]

With all due respect to Unclemick and the rest, she's mine.





<-------- Norwegian widow

[clifp]

Quote:

Originally Posted by cute fuzzy bunny There is ONE rather special thing about it. "Okay Gramma, lets talk about this mutual fund we think you should invest in. It invests in nice blue chip companies, all of which you've heard of, that pay good dividends, and lots of good high quality bonds. There are a whole bunch of fund managers from several companies who decide which stocks and bonds to buy and when to sell them. The company charges only a tiny amount to do the management vs most funds. Its been around for almost 40 years and has returned more than 10% a year. In the last ten years its returned more than 6% a year while the stock market has gone nowhere. Recently its paid a dividend in the 4-5% range and we'll arrange to just have that put into your checking account automatically. You spend it. Thats it."

CFB has exactly right. In the days before all of the fancy asset allocation scheme, and complicated retirement calculation, a 50/50 mix of Wellelsy and Wellington was considered the ultimate no brainer retirement portfolio.

IIRC, I've actually seen a study that such combination allowed a 4%+ inflation withdrawal over its entire long history, with modest volatility. Even today I think such a portfolio is fine for somebody retiring at normal age, and 100% Wellelsy is fine for Grandma in her 70s or 80s.

Wellelsy won't make you rich but for 40 years (and almost 80 for its older cousin Wellington) it has kept retired from become poor. That is pretty special.

[cute fuzzy bunny]

Quote:

Originally Posted by clifp CFB has exactly right.

Hey, a broken clock is not only right twice a day, its about the only clock thats EXACTLY right twice a day.

So wait for the other time...

[Moemg]

I've had Wellington for 20 years but on days like this I love my SP 500 .

[clifp]

Quote:

Originally Posted by Moemg I've had Wellington for 20 years but on days like this I love my SP 500 .

True, enough but I bet you loved your Wellington the last few months.
I sure wish I had some!

[ats5g]

Quote:

Originally Posted by cute fuzzy bunny There is ONE rather special thing about it. "Okay Gramma, lets talk about this mutual fund we think you should invest in. It invests in nice blue chip companies, all of which you've heard of, that pay good dividends, and lots of good high quality bonds. There are a whole bunch of fund managers from several companies who decide which stocks and bonds to buy and when to sell them. The company charges only a tiny amount to do the management vs most funds. Its been around for almost 40 years and has returned more than 10% a year. In the last ten years its returned more than 6% a year while the stock market has gone nowhere. Recently its paid a dividend in the 4-5% range and we'll arrange to just have that put into your checking account automatically. You spend it. Thats it." or "Okay Gramma, we're thinking about putting you into a 65% mix of the intermediate bond index fund and 35% of the large capitalization value stock index fund. These indexes are managed by nobody. They're very inexpensive and very efficient. Once a year we'll move some money from one to the other to keep it at 35/65. If I die in a car wreck, here's what you'll need to do..."

Good point CFB. Wellesley [and for that matter Wellington or any balanced fund], is much simpler. That's why my mom uses one of Vanguard's TR funds. Whenever I talk to her and my dad about rebalancing, they call it "re-what-ing?" Though I think you should be able to handle obtion B with all your new finance knowledge.

The fact that Wellesley only has roughly 50 stocks still scares me though.

btw - Wellesley is only managed by two peeps from Wellington Management not the multi-subadvisor method like Windsor II.

[Lsbcal]

With all this talk of Wellesley I'm almost reaching for my check book. But then what would I have to be analytical about? I have a fatal attraction to running my own ship. Also I kind of like an AA of 55/45, oh well. I do think Wellesley and Wellington are very good choices.

P.S. Not sure I'd trust CFB with my grandmother .

[cute fuzzy bunny]

Eh, I think your gramma is safe. Your wifes sister is another story.

Alec, whats the current state of affairs on diversification? The traditional line was that around 20 stocks could provide perfectly adequate diversification but I think I then saw something that said you could get it with 7 or 8.

Honestly, I sort of like that they're putting their money into their 50 best ideas rather than 200 or 300, the latter just to spread the risk further. Theres gotta be a threshold at which point you're taking on less return/more risk in exchange for a modest/non-existent level of diversification.

As to my ability to handle rebalancing, you betcha. But I think I'll let someone else do it for the couple of basis points difference between the index method and the wellesley approach. "Pssst wellesley" is also a very good answer to folks who drop by the board to ask what to do with the hunk of money they just inherited or the grammas and grampas who want a cd-like return, some maintenance of purchasing power, and no sudden moves or loud noises.