SWAGX

[bobbyr]

Newbie Coffeehouse investor here. I recently bought into SWAGX with about 8% of portfolio....without fully understanding what to expect or what to look for. The value (which I assume is just a reflection of the price) has dropped a good bit (lost 1.5%). Should I just not look at the current value? Bad timing to get into SWAGX? I just need some reassurance and guidance.
I am 66 retired and heavily into dividend stocks that I inherited. (60% stocks, 30% cash, 10% SWAGX - cash has been in money market, CDs)

 

[Texas Proud]

I will look later... I have no idea what SWAGX is...

BUT, 1.5% is NOT a good bit... 20% is a good bit...

 

[all4j]

swagx is a bond fund. If you put that in the title of the thread, I expect you'll get lots of strong opinions!

The subject of bond fund performance isn't a brief subject. Might want to look in investopedia or some other source to understand how it should perform. Then you can make a determination as to if appropriate for your investing objectives.

 

[bobbyr]

swagx is a bond fund. If you put that in the title of the thread, I expect you'll get lots of strong opinions!

The subject of bond fund performance isn't a brief subject. Might want to look in investopedia or some other source to understand how it should perform. Then you can make a determination as to if appropriate for your investing objectives.

thanks, I was sloppy on the thread title. Thanks for the investopedia suggestion

 

[Koolau]

Not familiar with SWAGX

Here is some Morningstar info on it.

https://www.morningstar.com/funds/xnas/swagx/quote

I wouldn't worry about a 1.5% loss on any given day, week or month. Just part of the "give and take" of the markets.

I think the most important thing is to be certain SWAGX or any other fund fits into your overall investment plan since YMMV.

 

[GalaxyBoy]

I hold this as the bond allocation in my portfolio. It's an index fund that tracks the AGG index, similar to other funds offered by Vanguard and Fidelity (VBTLX, FXNAX, etc.). It has an ER of 0.04%. Whether to use a bond index fund or individual bonds as your fixed income allocation is up to you, and probably a question for another thread (if it's not already, I'd be surprised).

 

[Closet_Gamer]

When I held a bond fund, it was SWAGX. Giant bond fund that should more or less track the bond market. Pretty long duration so fairly sensitive to rates.

I no longer own bond index funds.

 

[Koolau]

When I held a bond fund, it was SWAGX. Giant bond fund that should more or less track the bond market. Pretty long duration so fairly sensitive to rates.

I no longer own bond index funds.

If no index funds, may I ask how many individual equities you hold? I've never thought I could deal with enough individual equities to have a truly balanced portfolio. I guess that's why I've stayed with index funds.

 

[Texas Proud]

If no index funds, may I ask how many individual equities you hold? I've never thought I could deal with enough individual equities to have a truly balanced portfolio. I guess that's why I've stayed with index funds.

From my investment class way way back when... all you need is about 30 stocks to be diversified... after that it is very small incremental on diversification.... now, you do have to buy different industries etc...

 

[Closet_Gamer]

If no index funds, may I ask how many individual equities you hold? I've never thought I could deal with enough individual equities to have a truly balanced portfolio. I guess that's why I've stayed with index funds.

I rely on three vehicles:
CDs
Treasuries
iBond Target Maturity ETFs

The ETFs are a specific basket (eg Corp Bonds or High Yield) that mature in a specific year. At the end of that year all proceeds are distributed and the ETF closes down. This gives lots of diversification while maintaining the known payback of specific bonds.

Between the ETF ladder and the CDs/Treasuries out there, it is probably 20 positions. But it’s not much to track as it doesn’t move around much.

 

[Onda]

If no index funds, may I ask how many individual equities you hold? I've never thought I could deal with enough individual equities to have a truly balanced portfolio. I guess that's why I've stayed with index funds.

Charlie Munger famously advocates for a concentrated investment strategy, believing you only need a few great stocks to achieve strong returns. His philosophy is rooted in the idea that if you deeply understand and trust in the long-term growth of three or four exceptional companies, spreading your investments too thin can dilute potential gains. This approach requires thorough research, conviction, and patience but can lead to significant rewards.

 

[OldShooter]

Charlie Munger famously advocates for a concentrated investment strategy, ... can lead to significant rewards.

William Bernstein: “Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine.”

It depends on your objectives.

 

[Koolau]

From my investment class way way back when... all you need is about 30 stocks to be diversified... after that it is very small incremental on diversification.... now, you do have to buy different industries etc...

Thanks. I had heard that something on that order was probably necessary (and usually sufficient.)

 

[Texas Proud]

Thanks. I had heard that something on that order was probably necessary (and usually sufficient.)

Well, I decided to take a look at it since it was so long ago... this is an article that I think is biased to have you buy ETFs.... but interesting... it says you need 1,000 stocks!!! Maybe more...

The interesting thing is that you get an 86% diversification with the 30 stocks...

The Illusion of Diversification: The Myth of the 30 Stock Portfolio

Find out what it takes to really diversify your portfolio.

www.investopedia.com

 

[target2019]

Newbie Coffeehouse investor here. I recently bought into SWAGX with about 8% of portfolio....without fully understanding what to expect or what to look for. The value (which I assume is just a reflection of the price) has dropped a good bit (lost 1.5%). Should I just not look at the current value? Bad timing to get into SWAGX? I just need some reassurance and guidance.
I am 66 retired and heavily into dividend stocks that I inherited. (60% stocks, 30% cash, 10% SWAGX - cash has been in money market, CDs)

Are you reinvesting the monthly dividends back into the fund?

To evaluate, you look at the total performance over the period(s) you hold the fund.

We have 5% invested in Vanguards total bond market fund. I think you're over-reacting, but who knows?

The 30% cash is something to watch, I'd think. Hopefully you're getting a decent return on that.

 

[VanWinkle]

I rely on three vehicles:
CDs
Treasuries
iBond Target Maturity ETFs

The ETFs are a specific basket (eg Corp Bonds or High Yield) that mature in a specific year. At the end of that year all proceeds are distributed and the ETF closes down. This gives lots of diversification while maintaining the known payback of specific bonds.

Between the ETF ladder and the CDs/Treasuries out there, it is probably 20 positions. But it’s not much to track as it doesn’t move around much.

That's too many positions for me. How long did you use bond index funds before the losses of 2022? Did you quit using stock index funds after the losses of 2022?

 

[Closet_Gamer]

That's too many positions for me. How long did you use bond index funds before the losses of 2022? Did you quit using stock index funds after the losses of 2022?

I got out of it before the bulk of the losses hit. Fortunately I had always held my bond AA fairly low because I just thought the yields were nutty low. I didn’t manage to avoid all of the bond pain but a lot of it.

I did hold a TIPS ETF for a long … figuring inflation would be good. Uh, nope. When rates moved I got killed in that. I didn’t understand how the asset class would perform in light of rates. Relatively expensive lesson. But lesson learned.

No more open end bond funds for me.

 

[triangle]

I think this is part of market volatility, with some uncertainty around the economic soft/hard/no- landing scenario, pace of the Federal Reserve lowering short rates, and the election.

But to the extend that I have been paying attention, I believe long bond rates have been rising since the Fed started lowering the short end. Looks like over 75% of SWAGX has a maturity of 3 years or more, so that may explain the recent drop.

I saw this clip on CNBC last week. I don't know much about him, but he is actually shorting long term bonds.

But I think it is important to keep a steady hand and not change portfolio balance based on the the financial news press, which is always stirring the pot.