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Old 10-11-2020, 09:51 AM   #61
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Originally Posted by RunningBum View Post
So why does one need to assess the performance of the equity part of Wellington or Wellesley? Why not just assess the overall performance? Vanguard's site shows the benchmark they compare the fund against, or you could create your own benchmark.
Sorry to be slow to answer. I thought I answered the day after you posted but apparently forgot to push the "Submit" button after editing. Try again:

There's probably little need to worry about Wellington or Wellesley and no need to worry about blended funds where the equity portion is indexed.

Probably the worst case where "assess overall performance" doesn’t work is with target date funds. The reason is that their AA varies all over the map. A target date fund that is heavy on equities might look good if the manager was lucky and might look terrible if he was not. No real way to tell that by comparing to other target date funds.

In general, I call this the "Kool-Aid problem." When the red and the green are poured into the same glass, it is pretty hard to be sure where the resulting color and flavor came from.

Re creating a benchmark, it is do-able but getting suitable components and getting good total return numbers would be a pain and you still have the Kool-Aid problem. Good equity performance and a conservative bond portfolio might look exactly the same as lousy equity results and a bond portfolio stuffed with junk.

I have never made a blanket recommendation against blended funds, though. The good ones like Wellington and Wellesley are very suitable for investors who want their AAs to be on autopilot. What I have said is that I will never buy a blended fund because I always want to be able to easily look in the box.

The same problem arises when looking at the overall performance of a brokerage account with both equities and fixed income. The performance numbers on the statements tell you nothing. I am on the investment committee of a nonprofit and recently maneuvered the FA into splitting our biggest account into two so we could see the equity performance and the bond performance separately. I'm already seeing signs that he is a little more conscious of how his performance compares to equity benchmarks like the ACWI. That's good. I really laughed (internally) at our last meeting when he justified a trade from one fund to another "because the fees are lower."
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Old 10-11-2020, 10:37 AM   #62
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I use TRowe Price. No index funds just a mix of stock and bond funds with a little international and Treasury Money Market.

In my brokerage there I have ETF’s, other company mutual funds and one Fidelity fund and Vanguard Short Term Limited
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Old 10-11-2020, 04:11 PM   #63
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Good equity performance and a conservative bond portfolio might look exactly the same as lousy equity results and a bond portfolio stuffed with junk.
That part in particular makes some sense to me. A fund might try to make up for bad equity performance with junk bonds, making for a more volatile and perhaps risky fund.
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Old 10-11-2020, 04:32 PM   #64
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That part in particular makes some sense to me. A fund might try to make up for bad equity performance with junk bonds, making for a more volatile and perhaps risky fund.
Oh, the risk is not speculative at all. Check out this real-world example: https://www.reuters.com/article/us-f...-idUSKBN1GH1SI In this case Fido made up for bad equity performance by taking unbelievable risks.

One of the more interesting things about Fido's malfeasance is that it took four years for their customers to notice. Nobody was looking in the box! IMO benchmarking is about understanding and explaining results, good or bad. This is probably more true on the bond side, but as in this case if equities are outperforming it's important to know the reasons.
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Old 10-12-2020, 04:09 AM   #65
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I use boring index funds from Vanguard. DW has Wellesley and what used to be American funds. My speculative equity holding is my old Megacorp stock that I took with me when I left (dance with the girl you came with - or was it something about the mule you rode in on - wait, no.) I've sold a bunch of it in the past 15 years - my version of rebalancing - but it just keeps becoming a larger portion of my port. Good news/bad news?

Still, I keep my equities at less than 35%. The rest is in a fairly esoteric mix of more cash-like instruments: I-bonds, SPDAs (called something else now), GIF, cash value insurance , etc. Then there are PMs in a bank box and the remainder assets of a small business.

I don't spend much time "managing" my port. Sounds like w*rk! I THINK I've got some decent diversity with relatively overall low risk. I also depend to some extent on having "more than I need" so no longer need to swing for the fences. I sense that some folks will die unhappy if they leave any money not earning its keep. For me, if there's some left over when I leave, I'm basically happy. YMMV
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Old 10-12-2020, 12:39 PM   #66
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For those who self-manage their nest egg - what funds do you use??

The majority of our nest egg is in two Vanguard funds: Wellesley and Wellington

OldShooter will be along shortly to explain the problem with my choices.

IRA - Big fan of Wellington and Wellesley also - keep 50/50 Wel/Wels in Rollover IRA for 50/50 stock/bond mix with no maintenance needed (rebalancing).


Roth - Wellington

Taxable account - Tax Managed Capital Apr. and Tax Managed Balanced. Most all dividends are qualified (muni's are not taxed federally, but are added back for taxing SS), and they throw off zero capital gains (so far). This is long term leave behind money - hopefully..


Retired early 58/57 (11 years now) and this portfolio is for DW who has zero interest in managing money. Told her when I go "Leave it alone, and don't let anyone change it".
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Old 10-17-2020, 08:21 AM   #67
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Big Gamble

Over the years I have had various mix of funds and individual stocks. About 10yrs ago I transitioned to all all stocks.....80% FANG. March 2020 I made a 100%, 1m+ bet on Amazon. I plan on keeping this single stock gamble through 2nd quarter 2021 and then likely rediversify. Big gambel=Big rewards.....Remember the rule of 72.
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