Wellington or Stock Index plus CD’s

[RetireAge50]

I currently have quite a bit of Vanguard Wellington. Was considering swapping it for a combination of Stock Index funds plus CD’s. With Navy Federal can get 3% on IRA CD’s.

I hardly ever make any of these type of moves so thought I would throw it out for the group. Not really a question but just a thought I had.

 

[OldShooter]

Not directly to your question but the reason I don't like blended funds is that it is impossible to isolate the performance of the equities and the fixed income tranches. So in the almost impossible event that I had some Wellington, I would ditch it for that reason. Same-o for target date funds.

Blended funds are a good choice for a lot of people but I don't like not being able to see in the box. Here's a ghost story on what happened at Fidelity: https://www.reuters.com/article/us-...ers-on-risky-path-to-retirement-idUSKBN1GH1SI

 

[Stormy Kromer]

I have a significant portion of my investment portfolio in Vanguard Balanced Funds. This is my "intermediate" time frame pile.


If I had it over I would take this portion and invest it in a VG stock index fund and a VG bond index fund, 50-50. I agree with OldShooter's comment on being able to isolate performance of equities and fixed income.


That being said, in my will I have instructed my children to put a year's living expense in cash and invest the rest in VG 2065. Then forget about it and get back to work.


Both strategies have their place for different situations, neither is wrong.

 

[REWahoo]

RA50, both strategies are reasonable and you won't know which is best for several years. Have you considered keeping half your Wellington and investing the other half in the index fund & CDs?

(FWIW, I have both Wellington and NFCU IRA CDs in my portfolio.)

 

[Free To Canoe]

The problem could be divided into subthoughts:

Bond funds vs CDs

Active vs mutual fund management.

Blended vs individual funds.

Which will make you more money, Wellington or Stock Index / CDs?

I have a high percentage in Wellesley and I am wondering if the Stock Index/CDs are a better option.
Right now I am considering staying the course unless I can be convinced that the extra work is worth the effort.

 

[MBAustin]

The problem could be divided into subthoughts:

Bond funds vs CDs

Active vs mutual fund management.

Blended vs individual funds.

Which will make you more money, Wellington or Stock Index / CDs?

One more: managed or DIY rebalancing.

 

[neihn]

RA50, both strategies are reasonable and you won't know which is best for several years. Have you considered keeping half your Wellington and investing the other half in the index fund & CDs?

(FWIW, I have both Wellington and NFCU IRA CDs in my portfolio.)

+1

This is what I did, however, I have set them up as buckets

1. Bucket #1 - Stable funds, MM, Total Bond index
2. Bucket #2 - Blend funds (Vanguard Wellington and Wellesley)
3. Bucket #3 - Total market index, International index, REIT

bucket 1 + bucket 3 AA is 50/50
bucket 2 AA is 50/50

Bucket 1 + bucket 3 = bucket 2.

 

[REWahoo]

+1

This is what I did, however, I have set them up as buckets

1. Bucket #1 - Stable funds, MM, Total Bond index
2. Bucket #2 - Blend funds (Vanguard Wellington and Wellesley)
3. Bucket #3 - Total market index, International index, REIT

bucket 1 + bucket 3 AA is 50/50
bucket 2 AA is 50/50

Bucket 1 + bucket 3 = bucket 2.

Looks good, should hold you till you kick the bucket.

 

[jazz4cash]

By all means, establish the 3% CD special with $50 and keep your options open. I don't expect it will last. You can add-on later if you so choose and the 3 % will look much better as time goes on.

NFCU has really mucked up their website and the mobile app is crashing on me. I could not navigate to the 3% CD deal except by searching for 37 mo. and then it opens in what looks like an archived page.

 

[RetireAge50]

By all means, establish the 3% CD special with $50 and keep your options open. I don't expect it will last. You can add-on later if you so choose and the 3 % will look much better as time goes on.



NFCU has really mucked up their website and the mobile app is crashing on me. I could not navigate to the 3% CD deal except by searching for 37 mo. and then it opens in what looks like an archived page.

My wife and I each opened one last month with $50. They gave us a $50 dollar bonus shortly thereafter so now we have $100 each. The max is $150k which got me wondering if I should move the bond portion of my Wellington into it.

 

[ejman]

I think one of the advantages of balanced funds (I own Wellesley/Wellington and Vanguard Retirement Income) is that the rebalancing is done automatically. I thought about the option of doing a stock index fund + a bond index fund and rebalancing periodically but I'm on a short life cycle ( severe immune disorder) I want to leave a simple system for my wife that she doesn't have to futz with since she has no interest in the financial tinkering that most of us at this site love so much.

Incidentally, both Wellesley and Wellington seem to do quite well when compared with equivalent index fund blends so I guess active management is not hurting things too much.

 

[Ed B]

...... I want to leave a simple system for my wife that she doesn't have to futz with since she has no interest in the financial tinkering that most of us at this site love so much.

Incidentally, both Wellesley and Wellington seem to do quite well when compared with equivalent index fund blends so I guess active management is not hurting things too much.

This is the situation with my wife as well. My instructions will be to put half in Wellington and half in Wellesley. They are tried and true and I hope she wont fall victim to some friendly neighborhood annuity salesman.

 

[neihn]

Same here, my instruction to DD is to put everything in Wellesley and setup automatic monthly withdrawal for DW.

 

[RetireAge50]

RA50, both strategies are reasonable and you won't know which is best for several years. Have you considered keeping half your Wellington and investing the other half in the index fund & CDs?



(FWIW, I have both Wellington and NFCU IRA CDs in my portfolio.)

Thanks for the input, makes some sense to have a little of all the stuff I like.
I’m leaning towards the following:
25% Wellington
25% T.Rowe 2030
50% Mix of S&P 500 and CD’s (split 65/35)

Kind of a 3-way horse race. Exciting!

Simple enough and doesn’t change my equity exposure and moves some of my bonds over to CD’s.

 

[Badger]

This is the situation with my wife as well. My instructions will be to put half in Wellington and half in Wellesley. They are tried and true and I hope she wont fall victim to some friendly neighborhood annuity salesman.

+1

I have all my IRA in Wellington except for a MM fund for the dividends. My wife has all her IRA in Wellesley except for a MM fund for the dividends. We are quite satisfied and have no plans to change. I also have a set of instructions on everything she needs to follow in case I am no longer around. In addition to our IRAs we have about $800k+ in individual stocks and more in cash (MM and CDs). To date we are only down by 5.5% for the total savings/investment. I think it is all working well enough.



Cheers!

 

[grasshopper]

Ms G and I have all our tax advantage dollars in Wellington, than we have a bunch of CD's and Total World VT in our taxable. That's all folks.

 

[Ed_The_Gypsy]

We are happy with Wellington. DW's, DS's Roth's and most of mine are in Wellington.

I have experimented with trying to improve on VWELX with 60/40 of different equity and FI funds without success going as far back as I could.

Now on autopilot with VWELX. And I don't have to mess with rebalancing.

 

[lordjust]

By all means, establish the 3% CD special with $50 and keep your options open. I don't expect it will last. You can add-on later if you so choose and the 3 % will look much better as time goes on.

NFCU has really mucked up their website and the mobile app is crashing on me. I could not navigate to the 3% CD deal except by searching for 37 mo. and then it opens in what looks like an archived page.

This one ?

https://www.navyfederal.org/products-services/checking-savings/certificates-rates.php