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Vanguard High-Yield Corporate Message Board

  • jayfram1 jayfram1 Jun 2, 2009 12:07 PM Flag

    Adding to position?

    Any thoughts on whether dollar cost averaging over the next few months to add to my position in this fund in my IRA is a good idea? I switched from a Vanguard treasury equities fund into this one in January and now I have a few thousand more in the IRA to invest.

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    • jayfram1,
      Yes, and here's my reasoning. First off in late Dec. my very honest financial adviser said get into junk bonds, either FAGIX or VWEHX. Since I had some money in a Vanguard roll over account I bought 25K at 4.06 and shortly realized what a good time to enter it was and bought another 25K at 4.17. Yesterday I realized that even though we've seen a big ride up since then long term avg. NAV is in the 5-6 range and I believe that is where we are headed. In addition looking at the last 5 years of divvies I noticed they never missed at least $.03 or more per month for over 60 months. Pretty good reliability. So even if it doesn't give much capital appreciation from here on out the divvie yield is so much higher than the money market I was in that its hard to see how I could lose. I transferred the remaining 45K or so into VWEHX. Anything can happen, but I believe this is an excellent place to park some moderately cautious money and it is likely to get more expensive the longer you wait. Good luck longs.


    • I would add (my opinion). Today could be a down day since the open ended junk funds are down. But considering that this fund was 20% higher a year ago than now I think there is a lot of upside potential. Plus if you buy in now at these ridiculously low prices you're going to lock in a nice dividend yield.

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