50% Wellesley/50 % Wellington - So Simple Why didn't I do it?

CFB the fund has been in existence since 1991 and it's total return in that time is 8.66%.

[cute fuzzy bunny]

Nothing really horrifying about good quality junk. I have a hunk of vanguards junk fund. Basically when the credit quality is just below investment grade and the yields are running about 5% over treasuries, they're okay.

But junk funds can have an awful lot of correlation with stocks and arent quite like ordinary bonds as far as diversification goes.

You could own a hunk of wellesley, a hunk of vanguards junk bond fund and a small slice of the vanguard convertibles fund and sort of end up in the same place for about 1/4 the expense ratio.

[ejman]

I understand that to be truly diversified one should have some presence in most (all?)asset classes. But with some of the more aggresive asset classes I have shown in the past a tendency to buy high and sell low (such as junk bonds and gold) so -knowing my foibles- I'll watch with envy as the other folks rake in the big bucks

[cute fuzzy bunny]

Quote:

Originally Posted by ejman I have shown in the past a tendency to buy high and sell low

Try it the other way for a while, its a lot more fun

[cute fuzzy bunny]

Quote:

Originally Posted by Tiger CFB the fund has been in existence since 1991 and it's total return in that time is 8.66%.

I see the confusion. The fund was available for institutional investment since 1991, but only since 1997 for retail investors. Looks like they changed managers at that time, and again last year.

Quote:

Originally Posted by cute fuzzy bunny I see the confusion. The fund was available for institutional investment since 1991, but only since 1997 for retail investors. Looks like they changed managers at that time, and again last year.

Daniel J. Fuss has been the manager since the fund began.

Does a hunk of wellesley, a hunk of vanguards junk bond fund and a small slice of the vanguard convertibles fund give you the same total gain that LSBRX does?

[cute fuzzy bunny]

I'll have to direct you to the clip from the Loomis Sayles web site below on fund managers.

Cant answer your other question without doing a bunch of work that I'm not that interested in doing.

cfb,

Daniel Fuss has been the head manager of the fund since it's inception.

Is VWEHX Vanguard's junk bond fund? Which fund is Vanguard's convertibles fund?

[ejman]

Quote:

Originally Posted by Tiger CFB the fund has been in existence since 1991 and it's total return in that time is 8.66%.

Tiger, I just ran the numbers for Wellsi/Welltn from 1/1/91 to today and I get a return (per Quicken) of 9.8% I'm not sure exactly what that shows (if anything) but there your are :confused:

[cute fuzzy bunny]

Quote:

Originally Posted by Tiger the head manager

Is that anything like the head nurse?

The vanguard fund information is readily available on vanguards fund site at Vanguard - Mutual funds, IRAs, ETFs, 401(k) plans, and more. If you find anything interesting, let us know.

Quote:

Originally Posted by ejman Tiger, I just ran the numbers for Wellsi/Welltn from 1/1/91 to today and I get a return (per Quicken) of 9.8% I'm not sure exactly what that shows (if anything) but there your are :confused:

Loomis Sayles Institutional Class return since 11/1/91 is 10.68%
Looms Sayles Bond Fund Retail class return since 12/31/96 is 10.4%

[ejman]

Quote:

Originally Posted by Tiger Loomis Sayles Institutional Class return since 11/1/91 is 10.68% Looms Sayles Bond Fund Retail class return since 12/31/96 is 10.4%

Wellsi/Welltn since 1/1/88 was 10%

Wellsi/Welltn since 3/1/00 is 8%

Ain't this fun?

What about since 12/31/96?

[cute fuzzy bunny]

This sort of dialog seems unproductive.

To directly answer your original question, a portfolio of this fund, an international fund and a tips fund compared to a 50/50 blend of wellesley and wellington would provide:

- Far more international stock and bond exposure
- More risk of principal loss
- Some protection from US currency fluctuations
- Higher fund expenses
- Potentially very high volatility from all three components
- Moderate protection from inflation

I would not recommend such a mixture for a mildly risk averse early retiree looking for good income, low costs, low volatility and a good potential for maintaining pace with inflation. It might be fine for a retiree looking for total return that isnt concerned about fund costs, volatility and a fair degree of tolerance for capital loss.

Was there something else you were looking for?

Quote:

Originally Posted by cute fuzzy bunny Was there something else you were looking for?

Yes, an answer from ejman to my last question to him.

[cute fuzzy bunny]

Oh.

In that case, the yankees suck.

GO SOX!

[Helen]

I love the simplicity of the two funds but my concern would be in the withdrawal phase. If the markets are way down, I would want to pull money from my bond fund. If the markets are way up (hey, it could happen) I would want to pull from my stock funds.

I think balanced funds are great in the accumulation phase, but not so much in the withdrawal phase.

[cute fuzzy bunny]

I'd always recommend them (them being any of the above) as a partial holding with other funds fleshing out an asset allocation.

For dead-bang stupid the two fund wellesley/wellington should do. But I'd add some international, some cash/cd's, some smaller allocations to rocket rides like reits, precious metals, emerging markets and perhaps some core stock/bond holdings like TIPS, short term investment grade, TSM, S&P500, etc.

Some folks like their foundation to be pretty solid and something they dont think about while they fiddle around with the shutters and trim paint.

Some folks will drop a mobile home on a pile of sand and buy lots of pink flamingos.

[ejman]

Helen, I have a variety of funds (7 actually ) in my non retirement basket ( 2 of which are Wellsi/Welltn) and they provide a good retirement income. Like I said at the beginning of this thread, I wish this pot was mostly if not all in the Wellsi/Welltn combo. I'm not sure I follow your logic in this not beong desirable in the withdrawal phase.

CFB Agree, diversified portfolio increases portfolio survavility MPT and all that but I hate the complexity.

Tiger, My comments on rates of return before were intended in a humorous vein and I'm not sure if that's how they were taken so I'm not playing no more...

[Helen]

Hi EJMAN,

Well, with a blend fund, which mixes stocks and bonds together, if I wanted to sell some bonds and leave the stocks alone I wouldn't be able to do it. In a case like this year, I think I'd rather sell bonds and live off the proceeds then sell stocks.

I suppose I could have laddered CDs to use during years when the markets are in the tank.

-helen