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Vanguard Wellington Inv Message Board

  • waiting_for_total_capitulation waiting_for_total_capitulation Oct 9, 2008 10:30 PM Flag

    Anyone holding on to this fund?

    It's not getting hammered as much as the market in general, but it's still getting hammered.

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    • i bought more last week at 22.83 ... and hope to go all in today with the rest of my mad money at @ 21.4 :)


      • 1 Reply to cmgo24
      • ps glad i dumped 8oo plus shares at 33 something 18 months ago.. which took 5 years to aquire... will have 1300 by end of day .. 31 long term easy pop from here ...and just look at the dividends ... smartest move out there i think... also buying alcoa and dynagey ...AA and DYN... nervous nilly currently... but 18 months from now I should feel great.. way i figure it if im wrong it doesnt matter wont be worth a crap anyway.. a mattress full of money for a loaf of bread doesnt sound exciting to me... long and strong gl all...

    • I like this fund, great manager, decent return compare to peers with less volatility. The problem may lies in redemption. If you look at the fund asset, only 1% - 2% is in cash, but the redemption has speed up recently which you can see from its historic asset here (asset base drop by 20% in the last 2 months):

      So if a lot of people are selling quickly, then Edward, the fund manager, may need to sell to feed the redemption. That will kill the performance.

    • My last point was about the managers change. Part of their great performance has been low costs, but part has also been the managers, who are now new to the fund and this difficult environment. Again, I am long this fund but am not sure I can recommend to clients, family and friends.

    • I think this is a great fund for long term 5 + years... Just look at a long term chart.
      hve had it for around 10 years.
      All the Mutual Funds are getting hit hard..
      They will recover...


    • Most of my core investments have blown right through the downside predictions based on previous performance, not just Wellington. I think it's just a sign of the times. I'm down about 30% on Wellington and now need to earn 50% back just to break even. This could take 5 years or longer.

      However, you need to hold this fund for income first and growth second. The growth part is now on hold for a while. I think it will come back but will take time. Of course, if you are just buying in now you're in good shape. I think reasonable long term performance for VWELX will be in the 6% to 7% range. I would be satisfied with this, if it happens, and meets my performance objective for this fund.

    • Does anyone have an opinion on whether the recent management changes on both stock and fixed income side were a factor in the poor performance ? I see this fund as being about 5% worse on the downside than I would have expected given the 65/35 allocation.

    • It still sounds like you are trading stocks rather than investing in a mutual fund. You said that your emergency account was fine and Wellington's management team has a long term record that means that they should recover your money over time. Why sell at a 30% loss if you don't need the money now? I guess that you can write it off on your taxes but I just

      You did not say this but someone in another posting said that the the "worst case" scenario for Wellington saying that it should lost around 20%. Wellington's worst year was -35.41% in 1937 so I have always used that as the benchmark for any losses. An 80 year history does have some excellent context and I would have used that in assessing the worst case scenario for a fund.

    • Yes, you are right that the day-to-day stuff is just noise. Been investing since Feb 1986, saw lots of noise, and the stock market has ups & downs regardless.

      The elections don't & won't shape what investments I'll buy. Already chose my "draft picks", no matter who wins. Just want to make sure this election won't be like 2000, when we didn't know who the president would be for over a month. The stock market hated that. Once there's a clear winner, will gradually buy the investments I've already selected. Fed won't matter, price of oil won't matter, no event will change the investments I already chose. Been there, done that.

      70% of my portfolio is designed to "stay the course": 10% cash, 20% bonds, & 40% balanced/ asset allocation funds which are the "core funds". Only 30% is an occassional, not constant, trading portfolio. My selling is based on trailing stops like many professionals use, not on panic/emotions.

      It's a disciplined, planned number, and once it's reached, that investment is gone. Then I buy another one in its place that fits my needs & risk tolerance better, based on thorough research & observing its performance, not on panic or "frantic reallocation".

      Wellington got sold because it had a -30% trailing stop. It was pre-planned & numbers based, not based on panic. Why should I own a balanced fund that dropped over 33%, when I can feed my others that have better long-term performance & didn't drop near as much? I thought Wellington would meet my risk tolerance and it didn't. So I sold it according to a disciplined trailing stop.

      The balanced funds I'm adding $ to are now down only between -11% to -15%, not -25%. They also perform better than VWELX at every major benchmark year: 1, 3, 5, 10, & lifetm. So why shouldn't I invest more there?

      Yes, I agree VWINX is a good option for people who want lower volatility. Checked VWINX several years ago, and that looks like a good fund to add or transfer assets into when over 60. For now, I want my balanced/ asset alloc funds to gain more than VWINX & lose less than VWELX. The ones I already have do that, and they will not be sold until I need or donate the $.

      I'll "stay the course" in the 70% of my stable portfolio. But the 30% higher growers will be traded once they hit a trailing stop. And won't own a balanced fund that drops -30%+. I don't expect the remaining balanced/ asset alloc funds to reach that stop. Since they didn't by now, they are keepers.

      My bills & emergency fund are covered every month. The only thing I cannot do right now is feed money into my investment accounts, which the part-time job will fix.

      Most good financial planners have their clients diversified, depending on their risk tolerance & time horizon. Had I stayed in just one balanced fund during this bear, NONE of my portfolio would have made money. Because I was diversified, 3 of my funds actually made money during this bear & cushioned the loss. That's what diversification does. It's more effective & less risky for me to be more diversified.

      For people who can consistently invest monthly or quarterly, a -33%+ drop is not as big a deal, and VWELX is still a good fund for them. But not everyone has the inflow to consistently invest, so they need core investments that don't drop as much.

    • It sounds like you are really doing quite a bit of shifting and managing and I wish you well. I don't really know if I would even let the elections shape my feeling on which investments I am in and I know that John Bogle would not support such views. I am not saying this to ridicule but, as he and Warren Buffet have stated, the best thing to do is to buy a suitable portfolio and hold onto it as long as possible. The best holding time, in their view, is "forever".

      I wouldn't be so sure that the ETF's that Vanguard has will serve you any better particularly if you are an investor who is constantly moving his assets around. Remember that the reinvestment options can vary on an ETF and that fees are charged EACH time you buy or sell an ETF.

      Now is a great time to buy into VWINX or VWELX and I would personally encourage you to do so as they are really cheap. You are going to be retired for potentially the next 30 years or so and Wellington falling 30% should not make it a bad investment just because another option only fell 20% and some change. Wellington has now recovered to a 25% loss in the last year although its dividends and reinvestment options might help you in the long run.

      VWINX has only lost 14.24% in the last year and pays a superior dividend. Perhaps you should shift your assets to a core fund or two like VWINX that can carry you through to retirement and stop what seems to me like a frantic reallocation of your retirement resources. You could use the part time job to cover your bills and build up an emergency fund while the funds do the work for you. You can even take the dividend payments if you like.

      John Bogle's words - "Stay the course, regardless. Buy several core funds and hold onto them for as long as you can. Never own too many funds. Constantly buying and trading mutual funds will hurt any long-term investment goals because you are basing your decisions on emotion instead of a long-term strategy."

      Yeah, I know it is tough. My grandmother invested in these funds in her early 60's and they helped her tremendously until she passed away in her early 80's. I would encourage you to do the same even though times are fearful. Please read John Bogle's book - "Common Sense on Mutual Funds" and then make a decision.

      I'm just stunned. Most of us whom invest at Vanguard, outside of the 401(k) people who may not have a choice, are here because we believe in staying the course and blocking out the noise of the markets. I know many people who own Wellington and I must say that I have never know anyone to sell it after being in it such a short period of time. Am I right in that you sold your entire stake? Remember, the day to day is just noise. Vanguard investors are not supposed to hinge their decisions on a Fed rate cut, whether Obama or McCain becomes president, or if a barrel of oil spiked to $150. We are instead guided but the theme of consistent investing over a time period leads to a sound strategy.

      Wellington has paid a dividend every quarter and that even includes the dreaded Great Depression. I think that it would be fair to say that we would not have an economy, the banks would all fail, and we would all be unemployed if Wellington ever missed a dividend payment. That would mean that GE, Walmart, AT&T, Exxon, Chevron, et al. would have all collapsed and that just seems unlikely.

      I urge you to read Bogle's book, pick Wellington if you can stand so more volatility, or Wellesley if you can't, and then go with one fund and just stick with it for the rest of your days.

    • Hello Aircnt77, I'm a 53-year old early military retiree. Have a pension that covers all the bills & daily living, but nothing left to feed my funds. Unless I cash the lower-performers out & use those dollars to feed the others. Or unless I take gains from the big gainers & redistribute.

      Not necessarily interested in income-oriented funds. I tried that, they didn't hold up as expected, and all it did was cost more taxes. Like to have 10% cash, 20% bonds, 40% balanced/asset-allocation funds, and 30% is a trading portfolio using ETFs & sector funds. So 70% is pretty stable, and 30% is to provide more firepower.

      Until recently, had 15% SH (ProShares Short S&P 500) since February and about 50% cash. About 2 weeks ago began gradually reducing the cash & SH to gradually phase back in the market. Held most of the balanced/ asset-allocation funds the whole time, because I did not know when the markets would turn around & those funds normally hold up ok.

      The Vanguard Funds I'm actually interested in are 2 ETFs, VIG & VDC. I have no diversified large cap exposure yet, and VIG held up better than most equity/growth style funds. Looking to buy that soon. VDC never dropped below -30%, and would like having consumer staples, which don't make you poor on the way down, but provide decent upside.

      Looked at VWINX, and it looks good for when I get a little older. Right now I'd like the balanced/asset allocators to gain a little more. It's a little too light for me right now, but later it would be good. Liked VWELX, but it didn't hold up as expected. I can't take more than a -30% haircut on a balanced fund. VIG lost over -35%, but that is a growth fund that actually did better than most in its category, and an ETF that can be traded at any time.

      Got the balanced/ asset allocaters covered for now. But do look forward to buying VIG & VDC soon. Waiting until after the election for various reasons. Also expect to get a part time job by end of 2009 to feed my financial accounts. Almost everything I earn will be saved & invested. Looking at investing in or switching over to VWINX when I reach early 60s.

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