Why does vanguard high yield bond NAV decline

[Gone4Good]

But all of this illustrates what I have been saying: there are times to buy junk and sell junk, but just blindly holding it is not a great idea.

To put this in context, the OP wants to retire with a 100% junk portfolio. Last year he wanted to draw 100% of the income. Now it seems he wants to draw 60% of the income. The first plan was a disaster, the second plan might work. But whatever the outcome, that is the context of this thread.

 

[veremchuka]

The thing is that it is still a bond fund... and is not as 'risky' as a stock fund.... the income component is there year in and year out...

I think you are compensated well for the risk... look at the charts comparing it to the S&P (or your favorite stock index) and you will see that even though it might appear to be in lockstep with stocks... its movements are muted because of the income...

Soooo, I think the income componet of it still puts it in the bond category for me...

yes it is a bond fund but if you hold it for return not stability (which what a bond fund is supposed to do in your portfolio) then the risk/return imo is not as good as equity funds. so with that in mind that is why i said what i said. and i still think that for the return it is not a good buy and hold fund. i would rather b&h (and rebalance) tsmi and tismi for growth and stick with bond funds that offer stability to your portfolio like itt or tips and not take the risk and get about 1/2 the reward of an equity fund. ymmv.

 

[brewer12345]

To put this in context, the OP wants to retire with a 100% junk portfolio. Last year he wanted to draw 100% of the income. Now it seems he wants to draw 60% of the income. The first plan was a disaster, the second plan might work. But whatever the outcome, that is the context of this thread.

OP appears to be smoking crack.

100% Venezuelan Beaver Cheese futures (leveraged) would be a far superior portfolio.

 

[floatingdoc]

hey brewer, when you ask a question on an internet forum you expect reasonable answers to a question.
Last time I looked, crack smokers Dont:

1. Have a 500k house paid for
2. Have a 650k yacht paid for
3. Have a 1.1 M after tax portfolio
4. Have a paid for office building

at age 45....have a nice life.
I will go back to lurking here and glean what I can from some of the people (the few) with some grey matter on this forum

 

[vince]

Doc,
Thanks for the question. I have 150k in VWEHX and appreciate the thread. I've been lurking here for under a year and always seem to have more to learn than contribute. I didn't realize though, that if someone thought you knew the answer to a question they were required to answer it. But anyway, thanks.

 

[brewer12345]

hey brewer, when you ask a question on an internet forum you expect reasonable answers to a question.
Last time I looked, crack smokers Dont:

1. Have a 500k house paid for
2. Have a 650k yacht paid for
3. Have a 1.1 M after tax portfolio
4. Have a paid for office building

at age 45....have a nice life.
I will go back to lurking here and glean what I can from some of the people (the few) with some grey matter on this forum

Most crack smokers don't, but plenty of crack dealers do. Perhaps you just like to sample the product?

You seem to have a large chip on your shoulder, but a bit of friendly advice: don't put all your chips on junk. I've done a deep dive on literally hundreds of junk bond issuers. These are not the cream of the crop and the market periodically actually looks at what is under the hood and runs away from them. If these periods last long enough, junk issuers start blowing up even if their businesses do not deteriorate because they are dependent on the market to roll their bonds at maturity. It can get ugly. If their businesses deteriorate at the same time, it can get REALLY ugly (see 2008 through 2010).

I like junk at a price, but we are nowhere near the price level I personally find attractive. Be careful.