The Balance Mutual Fund per Mr Bogle

[Bikerdude]

Very shortly I'll have the bulk of my investments in DODBX and Wellington. Cruise control. And I fall asleep when my head hit’s the pillow.

[mb]

Quote:

Originally Posted by Hillbilly To conclude, have any of you felt this way after trying for years to read the right books, asset allocate to perfection, time the market, etc whatever your vice may be? Secondly, would you be willing to invest all your monies in a balanced mutual fund such as a Wellington, Dodge & Cox Balanced, Oakmark E&I, etc and go play golf, fish, etc knowing that your absence may be the best thing going?

I consider it every year about the time that I'm doing taxes

MB

[Delawaredave]

Quote:

Originally Posted by REWahoo! Of course hindsight is 20-20, and the future of that fund and other historically strong balanced funds is unknown. But as I said in an earlier post in this thread, the bulk of my portfolio is in D&C Balanced and Vanguard Wellesley. Add to that a dash of international exposure (DODFX) and I'm done.

I think these "balanced funds" have done well over long periods is because a balanced portfolio does magic over the years.

The balanced funds just "force the balance". I have several balanced funds - and the rest of my portfolio has similiar "homemade balance" - the performance of both has been similar and outstanding since 1982.

No one can predict the future - but my money is on (literally) this balanced approach.

[Hillbilly]

Quote:

Originally Posted by unclemick2 Theoretically impure - should be 100% - BUT it's those pesky hormones and you know as a male - just gotta putz.

It has to be those darn hormones....they have gotten me in more trouble than with investing before but that is another post.

Quote:

Originally Posted by Bikerdude Very shortly I'll have the bulk of my investments in DODBX and Wellington. Cruise control. And I fall asleep when my head hit’s the pillow.

Cruise control is good and I, like you, do enjoy sleep. I had a call from a broker once during my day trading era in which I lost many nights worth.

Quote:

Originally Posted by Hydroman I ran 4% withdrawals (adjusted for 3% inflation. rebalanced annually) 50/50 VG STAR/Wellesley against various S&D index fund portfolios for the period 1997-2006 and STAR/Wellesley beat them all in terms of ending balance. The Coffeehouse portfolio came close though. It was not my intent to data mine either. That period is just the period I had data readily available. Just a data point to consider in the KISS vs S&D debate.

I've done some of this type analysis in the past against a few balance funds to see how a few investing books that propose a better "mouse trap" really can do. I have found to expose a fad it is best to let time lapse since the book was published before doing the analysis. Sometimes the results can shock.....take a look at your favorite book against a fund or two and enjoy. You may want your money back!

Quote:

Originally Posted by audreyh1 Yep - that's me! You can do all sorts of slicing and dicing, rebalancing, etc. and still not beat a simple approach. Simple is GOOD. Even if theoretically you can outperform a simple approach though active management of your portfolio, it seems that more often than not all the extra work gains you little, or even makes you underperform the simpler approach. I do have a large chunk of my portfolio in DODBX. The only reason why I am not 100% right now, is that I would realize significant cap gains and pay taxes when I sold other funds. I guess I'm not willing to take the tax hit. Audrey

You sound so much like my situation. Having funds outside the balance funds with gains presents a tax problem, but I'm looking for that opening to sneak a sale in there to buy say the DODBX. The simple approach, after 25 years of investing for me, seems like the smart approach! If I could get $5 per hour for each hour I've spent taking on some new way of making money in the market, I would not need to invest. Those hours can not be replaced. However, will the balance fund be perfect and at the top of the performance list every year? No! Will you sleep well at night (like Bikerdude)? Yes!

Quote:

Originally Posted by REWahoo! Someone (Audrey1 maybe?) posted that looking back they would have been better off if they had put all their investments in DODBX over the years rather than trying to slice & dice and be a "portfolio manager". Much less worry and fuss and returns as good or better than they ended up with. I know that's true in my case, and I'm just happy I kept at least a portion of my 401k in DODBX. Wish I had put it all there. Of course hindsight is 20-20, and the future of that fund and other historically strong balanced funds is unknown. But as I said in an earlier post in this thread, the bulk of my portfolio is in D&C Balanced and Vanguard Wellesley. Add to that a dash of international exposure (DODFX) and I'm done.

Sounds like you are practicing what has been talked about herein. The "portfolio manager" can become yourself very quickly if one doesn't watch it in my experience.

Question: In owning the DODFX, do you not feel that D&C or Wellesley would own international stocks (if need be)? Just trying to understand your reasoning for owning along side these two great balance funds... not try to put you on the spot...

[REWahoo]

Quote:

Originally Posted by Hillbilly Question: In owning the DODFX, do you not feel that D&C or Wellesley would own international stocks (if need be)? Just trying to understand your reasoning for owning along side these two great balance funds... not try to put you on the spot...

The short answer is I want more international exposure than the two funds combined provide.

From the D&C Balanced prospectus: The Fund may also invest up to 20% of its total assets in U.S. dollar-denominated securities of foreign issuers traded in the U.S.

From the Vanguard description of Wellesley's investment strategy: The fund may invest up to 20% of its equity assets in securities of foreign companies.

Whereas D&C's "up to 20% of total assets" is fine with me, Wellesley's "up to 20% of its equity assets" falls short, since only 35% of the fund is in equities. That's why I added some DODFX, to get my international exposure up to 15-20% of my portfolio.

[audreyh1]

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Originally Posted by mb I consider it [the simple approach] every year about the time that I'm doing taxes MB

Exactly!

And add to that - I consider it every time that I think about whether it's time to rebalance the portfolio. It only takes me 5 mins to run the calcs through my fancy spreadsheets (with data downloaded from Quicken), and I only check about once a quarter or after a significant market run up or down, but STILL. After many years, that occasional "checking" seems like quite a burden. I guess also because I realize I'll be doing this for as long as I live (or am of sound mind).

Audrey

[WilliamG]

I like the fund driven balancing feature and complement with index funds for asset classes not easily found in hybrid funds; international, reit, small cap. We have 4 hybrid funds: Lifestrategy Growth in DW Roth, Wellington in my Roth and Vanguard Asset Allocation fund as stock for balaning purposes/ Wellesley as bond in my roll-over IRA.