Wellesley and Wellington show huge losses

Hmmm - first - psst Wellesley and then and then 'those trusty Vanguard computers'.

Yikes! :facepalm:

heh heh heh - so how does erase evidence of past forum posts? :blush::angel:
 
michelek said:
*emotional term* this exact situation is why I *dislike* the stock market. Prefer tangible investments like real estate.
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Yeah, I had about 15 minutes of 'WTF' --- Meanwhile my 40 acres of land is still for sale, with no end in sight.:cool:
 
We don’t own either but I’d have had a heart attack too while the mistake was live. Not easy to dismiss even if you believe it’s a mistake.

Another reason I don’t look at our holdings more than quarterly...and another reason asset allocation (not all equity or one fund) is a very good thing, especially for retirees. It’s good to be prepared for a 50% equity haircut should it happen for real (again). I realize Wellesley and Wellington are not 100% equity.
 
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michelek said:
*emotional term* this exact situation is why I *dislike* the stock market. Prefer tangible investments like real estate.
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Cut-Throat said:
Yeah, I had about 15 minutes of 'WTF' --- Meanwhile my 40 acres of land is still for sale, with no end in sight.:cool:
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+1 Plus if you need to redeem just a little... say 1% of what you have... you can't do that with real estate. Hard to rebalance real estate too.

A quick check of how VTI did for the day instantly confirmed that it was likely a mistake... so no worries.
 
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Midpack said:
I realize Wellesley and Wellington are not 100% equity.
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Not to mention Target Retirement income -- Only 30% equity. --- Imagine what would have to happen, if this fund lost half of it's value in one day. I am unable to come up with a scenario.
 
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It just makes no sense at all for a few VG balanced funds would get hammered, and no other funds. I own some Wellington in my Roth and was never concerned. Had it been a few individual stocks, I would've been a lot more concerned and spending more time searching for a reason and trying to confirm it was a glitch. But I get that some others may not stay so calm and seeing their bottom line number chopped like that. Logically though, mutual funds are not independently priced and are made up of underlying securities and bonds, and if those have not crashed, the funds themselves will not crash.

As far this being a reason to go with real estate instead, my neighbor had listed her house at over $900K. A couple of years later, she is finally in escrow, I believe in the low 600s. So she took a similar hit, only this one was real, not a glitch.
 
Yikes - add this to my absolutely horrible experience with VG over the past several days on the joint beneficiary issue and it's enough to make me bail on these guys once and for all.

Unfortunately, you can't buy VG Admiral funds at any other brokerage (Fido, TD, etc) so if you want to own VWIAX or other similar funds you pretty much have to put up with VG's total incompetence when it comes to systems, processes and customer service.
 
michelek said:
*emotional term* this exact situation is why I *dislike* the stock market. Prefer tangible investments like real estate.
Click to expand...

So you are saying that no Real Estate listing has ever, ever been wrong for 30 minutes? I bet mistakes like this are far more common with real estate, and just like this glitch, have no real effect on anyone. The mistake would be recognized and fixed before any transaction takes place. So do you now *dislike* real estate?


Midpack said:
We don’t own either but I’d have had a heart attack too while the mistake was live. Not easy to dismiss even if you believe it’s a mistake....
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Heart attack? Really (well, not really, I know it's an expression, but still!)?

Funds are made up of so many individual holdings. And on a boring day in the market with little movement, how could anyone think this is anything but a reporting error?

I've seen reporting errors on places like yahoo before. It's a bit more stressing when it is an individual stock, but a quick search for news makes it clear it's a glitch.

Thousands of funds, 200 some trading days a year, the funds need to recalculate the value of their hundreds or thousands of holdings every day, and years go by before we see something like this, which is fixed in 30 minutes or so? I'd say they are doing pretty good.

-ERD50
 
As I mentioned before, I recall a similar event occurring several years ago. At the time, I was initially concerned, but then almost immediately figured out that it couldn't be true given the action of the market that day and that it must be some sort of reporting glitch. I concluded that they would eventually fix it, and that if it were really true, the money was already gone and nothing I could do about it, especially that evening. I was right, it was fixed. People may have valid reasons to drop Vanguard, but in my opinion this isn't one of them.


And, more generally, I think that this is a good reminder to us all that fact is fact, regardless of what the computer says.
 
I used Vanguard's automatic RMD calculator twice and both times their was a glitch so now I just figure it out and call them.
 
From the Barron's article link above:

“The prices reflected currently are not the fund final prices, but rather incorrect preliminary prices. We are publishing the corrected prices now and they should be reflected on the Vanguard.com shortly.”
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That doesn't really explain anything about the cause. Why were the preliminary prices so incorrect? I'm assuming these numbers aren't manually entered. As a software developer in a past life, the only thing I can come up with is data corruption, where a software bug caused random numbers to overflow into the price field, or a logic error where a price for one fund was assigned to a different fund. Or maybe they had some test program accidentally go live.

I got a paper statement once with all of my correct account information except that a couple of the pages had a totally incorrect address for me, somewhere in Arizona that looked like a business address. They never gave me an explanation. Someone on here suggested it might be a test program gone rogue. It just doesn't give me a good feeling about the institution where I've got 90+% of my money. Yesterday was very obvious and easy to correct. What if they have a glitch and mess up the # of shares I own of a fund, and I don't notice or there's no proof it's wrong? Maybe it's because of a phantom transaction that I can't prove didn't happen? I don't think they take seriously enough the management of trillions of dollars they manage. This event isn't enough to make me leave, but it's another mark on the wall.
 
Do we know the real reason of yesterday's glitch? blame IT is a lame excuse. everyone/everything blames IT, its a easy way out.

This morning news mentioned that as of yesterday that Vanguard had discovered of gun equities in gun free funds/ETFs.
 
It could be corruption of data, but I think more likely a process problem where asset prices were left initialized (ie $0).


If the data feed for pricing fails, of course it should stop, but maybe the guy that got woken up every night on false alarms decided to bypass that bit of code because that process "always works".
 
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RunningBum said:
That doesn't really explain anything about the cause. Why were the preliminary prices so incorrect? I'm assuming these numbers aren't manually entered. As a software developer in a past life, the only thing I can come up with is data corruption, where a software bug caused random numbers to overflow into the price field, or a logic error where a price for one fund was assigned to a different fund. Or maybe they had some test program accidentally go live.

I got a paper statement once with all of my correct account information except that a couple of the pages had a totally incorrect address for me, somewhere in Arizona that looked like a business address. They never gave me an explanation. Someone on here suggested it might be a test program gone rogue. It just doesn't give me a good feeling about the institution where I've got 90+% of my money. Yesterday was very obvious and easy to correct. What if they have a glitch and mess up the # of shares I own of a fund, and I don't notice or there's no proof it's wrong? Maybe it's because of a phantom transaction that I can't prove didn't happen? I don't think they take seriously enough the management of trillions of dollars they manage. This event isn't enough to make me leave, but it's another mark on the wall.
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I dunno, a lot of conjecture going on. Dan Weiner in the article saying "Vanguard has grown too big too fast ...." .

And your "I don't think they take seriously enough ...."

I was a software developer too. Lots of things could've caused this.

I worry a lot more about an EMP strike than their computer systems messing up, and not being able to fix the problem.

My only takeaway is that I should be a little more diligent in saving statements. But having paper ain't going to help in an EMP scenario anyway.

:)
 
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sengsational said:
It could be corruption of data, but I think more likely a process problem where asset prices were left initialized (ie $0).


If the data feed for pricing fails, of course it should stop, but maybe the guy that got woken up every night on false alarms decided to bypass that bit of code because that process "always works".
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This - my hunch based on the percentage drop for the various funds is that all domestic bond prices in the balanced funds were set to $0
 
RetiredAt55.5 said:
I dunno, a lot of conjecture going on. Dan Weiner in the article saying "Vanguard has grown too big too fast ...." .

And your "I don't think they take seriously enough ...."
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I base my comment on my mailing address issue. I contacted my Flagship rep, and let him know I was very uneasy with this as I didn't want my account info going to some other address. All that info in the wrong hands make it seem too easy for my account to be drained by someone. I made it clear this was a serious issue to me and it made me uneasy to keep my business at Vanguard.

The rep told me he'd find out what happened and get back to me. I followed up after googling the address to find out the business name and owner, and he said he'd forward that to his colleagues. That's the last I heard of it. They either couldn't figure it out, or didn't try, or didn't feel it was important enough, or too embarrassing, to tell me what they found.

Whatever it was, this tells me they didn't take my issue seriously.

I've had other small issues with them. None of them what I'd call a security risk but all were annoyances to me.
 
They are still having some serious IT issues. I either can't get logged in right now, or it just spins if I try to do anything.

Gee, I don't miss being on the other end of this problem, at all.
 
unclemick said:
Hmmm - first - psst Wellesley and then and then 'those trusty Vanguard computers'.

Yikes! :facepalm:

heh heh heh - so how does erase evidence of past forum posts? :blush::angel:
Click to expand...

Computers do not make mistakes (when they fail, they fail hard), but programmers do. Heh heh heh...

RunningBum said:
It just makes no sense at all for a few VG balanced funds would get hammered, and no other funds. I own some Wellington in my Roth and was never concerned. Had it been a few individual stocks, I would've been a lot more concerned and spending more time searching for a reason and trying to confirm it was a glitch. But I get that some others may not stay so calm and seeing their bottom line number chopped like that. Logically though, mutual funds are not independently priced and are made up of underlying securities and bonds, and if those have not crashed, the funds themselves will not crash...
Click to expand...

Although I was mostly in individual stocks and ETFs at this point, I own some balanced funds as well as BND and Wellesley and Wellington. No other funds exhibited this "crash". So, I knew there was nothing to worry about, but was curious to see what caused it.

Gumby said:
As I mentioned before, I recall a similar event occurring several years ago. At the time, I was initially concerned, but then almost immediately figured out that it couldn't be true given the action of the market that day and that it must be some sort of reporting glitch. I concluded that they would eventually fix it, and that if it were really true, the money was already gone and nothing I could do about it, especially that evening. I was right, it was fixed. People may have valid reasons to drop Vanguard, but in my opinion this isn't one of them...
Click to expand...

+1, although I only have a fraction of my money with Vanguard, both directly and through other brokerage houses.

sengsational said:
It could be corruption of data, but I think more likely a process problem where asset prices were left initialized (ie $0).

If the data feed for pricing fails, of course it should stop, but maybe the guy that got woken up every night on false alarms decided to bypass that bit of code because that process "always works".
Click to expand...

That sounds plausible, as Wellesley "crashed" harder than Wellington, and the former had a higher bond AA than the latter.
 
Yeah, I am actually trying to do a trade and it is so slow, I am going to give up. I'll try later.
 
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