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Anyone concerned of Wellesley fund given the recent bond volatility
03-27-2020, 11:25 AM
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#1
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Recycles dryer sheets
Join Date: Oct 2018
Posts: 233
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Anyone concerned of Wellesley fund given the recent bond volatility
I am retired and has 33% bond allocation, most of the bond is in Wellesley fund. The fund holds AAA, AA, A, BBB and other securities, given the market volatility and economy recession, I am concerned of default with some securities with grade A and BBB and others.
Wellesley is well liked on this forum, I was wondering if I worry too much. Am I alone here? any thoughts?
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03-27-2020, 11:32 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Apr 2008
Posts: 1,992
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Not concerned that much about Wellesley. It has a very good history.
Dodge & Cox Income (DODIX), OTOH, has me concerned. Just like in 2008, DODIX is getting whacked hard right now. It has done well for us in the period between 2008 and a month ago, but the last couple of weeks has been downright ugly with that fund.
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03-27-2020, 12:06 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,975
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I have a considerable portion of 90 yo DM's portfolio in Wellesley. It's behaving as I would expect in this market. I also need to add she also has an IT Treasury fund to even out the already conservative Wellesley.
I can't tell from your post, but you do realize Wellesley is composed of about 35-40% equities? IMHO a bigger concern than the managed bond holdings.
However, all things considered, we're definitely not making any changes.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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03-27-2020, 12:16 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,944
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Here's a list of their bond holdings: https://investor.vanguard.com/mutual...folio-holdings
In looking at the first two pages (biggest $ holdings), there appear to be a lot of treasuries and perhaps quite a few financial institutions.
If the market collapses (like a great depression kind of collapse), some of these will be hit -- but I would expect a lot worse in my other equity holdings.
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03-27-2020, 12:34 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by Eucerin
...I was wondering if I worry too much.
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I don't know the answer to your question but as a retired guy with a large chunk of Wellesley in my portfolio I continue to be pleased at how it has performed so far during the covidaster. I have no plans to make any changes.
__________________
Numbers is hard
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03-27-2020, 08:57 PM
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#6
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Recycles dryer sheets
Join Date: Oct 2004
Posts: 295
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I'm using monthly withdrawals from our taxed Wellesley fund to pay our mortgage. Im thinking of cashing enough of it to pay off the house (3.25%), then start dollar cost averaging into it again. Im not currently needing it to live on.
With a different house in 08 I paid it off early in the crisis, licked my wounds and started averaging into Wellesley. Smaller numbers then, but in a few years my numbers were sweet.
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03-27-2020, 10:24 PM
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#7
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Full time employment: Posting here.
Join Date: Mar 2010
Posts: 889
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My understanding is that the Fed is literally buying corporate bonds now. So I wouldn't worry too much I guess. The Fed is going to backstop the bonds from falling in value.
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03-28-2020, 07:32 AM
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#8
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Recycles dryer sheets
Join Date: Nov 2015
Posts: 440
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Quote:
Originally Posted by ESRwannabe
My understanding is that the Fed is literally buying corporate bonds now. So I wouldn't worry too much I guess. The Fed is going to backstop the bonds from falling in value.
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The Fed's magic money machine. I wonder if they sell a home version of that.
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03-28-2020, 07:54 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Nov 2008
Posts: 3,388
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Other than the dividends and RMD placed in a MM tIRA account that came from Wellesley and Wellington we have all our tIRAs in those and feel comfortable with both of them.
Cheers!
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03-28-2020, 07:55 AM
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#10
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Recycles dryer sheets
Join Date: Oct 2018
Posts: 233
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I wouldn't say that the wellesley has behaved expected in the past 4 weeks. While sp500 at lowest-3/20 was at 2016 level, and wellesley was at 2012 level.
Yes, Fed is step in to buy certain bonds for a temporary relief but, covid-19 is still escalating and unemployment is going up in a record speed, how long can fed buying and sustained?
that being said, the economy was already wobbly before the covid-19, this economy down turn only bring the worst of it.
Wellesley contains 10% government bond; 5%muni bond; 66%corp bond and 15%securitized bond.
I think Fed isn't buying corp bond.
Most of us cheered wellesley and benefited from wellesley for as long as I remember, we enjoyed its dividends and no complains.
I am not here to advocating anything negative but to put my concerns on the table and hope someone can convince me that all is ok.
I am retired and 1/3 of my portfolio is in wellesley, it is a legitimate concern.
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03-28-2020, 08:06 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by Eucerin
I am not here to advocating anything negative but to put my concerns on the table and hope someone can convince me that all is ok.
I am retired and 1/3 of my portfolio is in wellesley, it is a legitimate concern.
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I'm not sure anyone can provide enough information to convince you all is ok. None of us know the future, all we know is the past.
If I was uncomfortable with Wellesley I would move my funds elsewhere. Maybe that's what you should do if your concern is keeping you up at night.
Problem is, I don't know what investment would be any better.
__________________
Numbers is hard
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03-28-2020, 09:49 AM
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#12
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Recycles dryer sheets
Join Date: Nov 2015
Posts: 440
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It's a challenging time for most of us and I hear your concern. As Rewahoo suggested, you may consider a different place for your funds.
I'm sticking with my AA and current plan (it includes some Wellesley) Good luck with whatever you choose.
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03-28-2020, 10:06 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Wellesley has been about 1/3 of my investable assets since I ER'd 18 years ago. I see no reason to change at this time particularly since the Fed's magic money machine has an unlimited supply of funds to prop up any security it wants to. And when (if) inflation takes off I suspect Wellesley managers will be at least as good if not much better than I would be at picking investments that would keep up with that inflation.
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03-28-2020, 11:57 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Moscow
Posts: 1,569
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Quote:
Originally Posted by ejman
I suspect Wellesley managers will be at least as good if not much better than I would be at picking investments that would keep up with that inflation.
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When Trump was elected I feared the economy would get goofy. I thought a light touch of active management might be beneficial. I'd been indexing, and moved into Wellington and Wellesley for just this reason.
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03-28-2020, 12:04 PM
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#15
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,468
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Quote:
Originally Posted by REWahoo
I don't know the answer to your question but as a retired guy with a large chunk of Wellesley in my portfolio I continue to be pleased at how it has performed so far during the covidaster. I have no plans to make any changes.
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+1
I am 100% retired with a portfolio that is 30% Wellesley. I am happy with it and look forward to Wellesley dividends each quarter.
It is $60.08/share right now, whereas back on 3/9/2009 it was $39.03/share. Not that I care; I am a buy-and-hold investor and simply like the dividends.
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Happily retired since 2009, at age 61. Best years of my life by far!
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03-28-2020, 05:55 PM
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#16
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Recycles dryer sheets
Join Date: Sep 2019
Posts: 102
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Quote:
Originally Posted by Keim
When Trump was elected I feared the economy would get goofy. I thought a light touch of active management might be beneficial. I'd been indexing, and moved into Wellington and Wellesley for just this reason.
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how has it turned out?
Quote:
Originally Posted by W2R
It is $60.08/share right now, whereas back on 3/9/2009 it was $39.03/share.
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have the dividends per share gone up in that time?
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03-28-2020, 05:58 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
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Quote:
Originally Posted by grayv
how has it turned out?
have the dividends per share gone up in that time?
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Info on Wellesley's performance is available at Vanguard.com.
__________________
Numbers is hard
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03-28-2020, 06:09 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Moscow
Posts: 1,569
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Quote:
Originally Posted by grayv
how has it turned out?
have the dividends per share gone up in that time?
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Honestly couldn't tell you the numbers. On my most important scale, How well does Keim sleep at night?, it has outperformed.
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03-28-2020, 06:10 PM
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#19
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Recycles dryer sheets
Join Date: Nov 2017
Location: Green Bay
Posts: 226
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I have no plans to reduce my holdings in Wellesley or Wellington. These 2 funds make up 6% of my portfolio. I hold mostly indexed funds but like to have a few managed funds.
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