VBINX still relevant [Vanguard Balanced Index Fund]

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Spectroscopy
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VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 10:11 am

I know next to nothing about investing. I opened this fund in June 2014. It was a rollover from an employer sponsored 401k plan that I couldn't contribute to. I rolled it over so I could contribute to it, but after watching it for 2 years, it's only ever lost money. Do I need to switch to another fund or something?

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prudent
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by prudent » Thu Jun 30, 2016 11:00 am

The Morningstar "Growth of $10,000" chart for VBINX, from the end of June 2014 to today, shows a 8.1% gain (assumes reinvestment of all distributions). Do you actually have less money in the fund today than in June 2014?

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 11:51 am

Yes. (This reply needs 5 characters)

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prudent
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by prudent » Thu Jun 30, 2016 11:57 am

OK, even without reinvested distributions, the fund NAV is up 3.6% since the end of June 2014. Does your account history show any withdrawals for fees, etc.? If you are showing a loss, it is not due to the fund performance.

jjface
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jjface » Thu Jun 30, 2016 12:01 pm

Did you do some selling and buying during those 2 years? market timing

orca91
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by orca91 » Thu Jun 30, 2016 12:10 pm

I hope it's still relevant. It's the only fund I hold in my Roth IRA. :happy

If you know next to nothing about investing, OP, it's probably one of the better funds for you to hold.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 12:30 pm

It does dividend reinvestment. I haven't touched it. It says the "rate of return" is 0.7% and "expense ratio" is 0.22%. I don't really know what those mean since there's no description or explanation for them. It had two major losses, each of about $200. One in September 2015 and one in January 2015. For a net balance today of -$50.00.

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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jackholloway » Thu Jun 30, 2016 12:33 pm

How much do you have in it, if you do not mind the question?

It is still a reasonable fund, if it does what you want. You can save a bit by getting a total stock and total bond fund, especially if you have enough to get admiral shares of each, but it does the job of being a 50/50 fund pretty well.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 12:35 pm

About $3600. Well, $3550 now.

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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jjface » Thu Jun 30, 2016 12:45 pm

Image

Highest price for VBINX in June 2014 (so worse you could have done) was on 30 June 2014. Here is the chart. As you can see $10k would be worth $10,811. So a 4% average annual return. Not a loss. This assumes automatic dividend reinvestment.

1. Do you have your start value correct - I think you should have rollovered $3280 ish to get to $3550.
2. Did you withdraw dividends
3. You only have losses if you sold. Did you sell and buy back later at a higher price?
4. The fund has only ever been higher than today during 2015. So if you bought any time before eg if you bought before 2014 and transferred it in kind from your 401k then still you would have a gain.
Last edited by jjface on Thu Jun 30, 2016 12:54 pm, edited 7 times in total.

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prudent
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by prudent » Thu Jun 30, 2016 12:46 pm

It's important to understand how you could be in a loss position since we know it's not because of fund performance. What other transactions happened in your account besides your initial purchase and the reinvestment of a dividend each quarter? I believe that's the root of the issue.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 12:48 pm

So that still doesn't explain my loss.

And, yes, the account was opened on June 30. Today is my 2-yr anniversary.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 12:51 pm

I don't see any other transactions except the reinvestment purchase and dividend changes. So what do I do now? Dump this fund? Is there a more consistent one?

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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jhfenton » Thu Jun 30, 2016 12:52 pm

Objection: Question assumes facts not in evidence.

Evidence: $10,000 invested in VBIIX on June 30, 2014 would be worth $11,002.12 as of today. Even without reinvestment of dividends, the NAV has increased from $11.46 to $11.86 (3.49%).

So, unless you've sold some or had outside fees taken out, your position in VBIIX has not lost money.

livesoft
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by livesoft » Thu Jun 30, 2016 12:54 pm

Maybe you don't own this fund at Vanguard and had to pay a commission to buy it at the broker you hold it at?
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Northern Flicker
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Northern Flicker » Thu Jun 30, 2016 12:55 pm

I would make no changes until you understand why you think you lost money during a period when the fund made money.

jjface
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jjface » Thu Jun 30, 2016 12:56 pm

jjface wrote:Image
The facts speak for themselves - you have made a mistake somewhere either in the starting value or you forgot a transaction you made.
livesoft wrote:Maybe you don't own this fund at Vanguard and had to pay a commission to buy it at the broker you hold it at?


That could explain part of it but still not enough.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 12:58 pm

So then maybe Vanguard charged fees in excess of returns and didn't list them? I don't see that listed in the transactions.

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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jtdavid » Thu Jun 30, 2016 1:11 pm

OP, check your statement and let us know the following:

1. How many shares did you purchase in June 2014 and and what price?
2. How many shares do you currently own?

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 1:19 pm

Ok, this is weird. My transaction history says I didn't actually purchase the shares until April 2015. I am confused.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 1:21 pm

Oh, maybe I transferred it from another Vanguard account. Actually, I think that's what I did. I changed the account from some silly thing they opened it with to one I could buy the VBINX fund with.

jjface
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by jjface » Thu Jun 30, 2016 1:26 pm

Just know it is a good fund to buy and hold pretty much forever. Just as long as you are happy with 60% equities and 40% bonds with no international exposure.

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Spectroscopy
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by Spectroscopy » Thu Jun 30, 2016 1:29 pm

I'd like to buy other funds, but I can't afford to and probably never will. Ok, so let me ask you guys another question since you are all here. 529 or IRA for the kids? There won't be any other family members to transfer the funds to, so if my kids decide not to go to college, that's it.

GordonG
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Re: VBINX still relevant [Vanguard Balanced Index Fund]

Post by GordonG » Thu Jun 30, 2016 2:38 pm

I used to have some shares in this fund, and thought it was pretty good. I only recently sold it because it was making it complicated to keep track of my asset allocation (the balanced fund is a mix of stocks and bonds). Now I just invest a certain percentage in a low-cost S&P 500 index fund, and the rest in a bond fund.

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