All in with Balanced Index fund

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dexter74
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All in with Balanced Index fund

Post by dexter74 » Mon Apr 17, 2017 3:22 pm

So I took the plunge and now have VBINX as my sole fund in my Roth. [I'm in the 15% tax-bracket and probably will be until retirement] I'm a newbie investor and if you read some of my prior threads, you'll see I've had a few "hiccups" to start my investing yrs. After much research and deciding my risk tolerance and yrs before retirement [20-25yrs] I'm confident w/ my decision.

I literally just heeded the advice of Jack Bogle to come to my decision. One question though: I know there's a few past threads on this, but wanted to get some current thoughts as to why VBINX isn't more popular? Ask Jack said, VBINX is really all most investors need [or something along those lines]

Again, big thanks to all on here that have chimed in w/ great advice.

aristotelian
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Re: All in with Balanced Index fund

Post by aristotelian » Mon Apr 17, 2017 3:31 pm

No real reason. Some people like a target date fund that autmatically changes its allocation as you get closer to retirement rather than having a static allocation. Others want to own each component rather than an all-in-one. Still others want a more aggressive mix, while others want a more conservative mix. None of those are reasons against VBINX if it hits the mark for your risk tolerance.

zuma
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Re: All in with Balanced Index fund

Post by zuma » Mon Apr 17, 2017 4:32 pm

One reason might be that VBINX has no international holdings.

If you don't want international, it's a good fund.

But it seems to me that most folks here want at least some international exposure.

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Christine_NM
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Re: All in with Balanced Index fund

Post by Christine_NM » Mon Apr 17, 2017 4:55 pm

Congrats on pulling the trigger. Of course you can also own an international fund in any type of account in addition to VBINX.

Why is it not more popular? No one is pushing it. Each investor has to discover it. I'd say it is certainly becoming more popular on this forum along with index funds in general.
10% cash 45% stock 45% bond. Retired, w/d rate 1.5%

zuma
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Re: All in with Balanced Index fund

Post by zuma » Mon Apr 17, 2017 5:04 pm

Christine_NM wrote:Of course you can also own an international fund in any type of account in addition to VBINX.
Absolutely. I was merely speculating as to why it might not be more popular than it is.

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stemikger
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Re: All in with Balanced Index fund

Post by stemikger » Mon Apr 17, 2017 5:14 pm

You are making a great decision. I will do the same.

Here's a thread I started in 2015.

viewtopic.php?t=164521

And yet another. LOL.

viewtopic.php?t=161326

Oh boy, I'm like a broken record:

viewtopic.php?t=178236

There was a time I almost lost faith in indexing and no longer thought it could be this easy. I was wrong.

I hold 60/40 in my 40K heading toward $1 million and the Balanced Index in my TIRA. Upon retirement, it will go into the balanced index fund and stay there (possibly) forever.

P.S. I don't hold international, so my one fund portfolio will meet my needs.
Last edited by stemikger on Mon Apr 17, 2017 5:21 pm, edited 1 time in total.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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matjen
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Re: All in with Balanced Index fund

Post by matjen » Mon Apr 17, 2017 5:21 pm

A fine fund but I would want exposure to International as well for any long term investment (unless you have the exposure in other parts of your portfolio). Are you sure there is no recency bias involved? Here is David Booth's perspective. I think it is the correct one myself.

https://www.dimensional.com/video/?v=1_ ... imensional Stories: Global Diversification&c=David Booth speaks on global diversification, highlighting its role in avoiding extreme investment outcomes and emphasizing the importance o&z=https://cdnapisec.kaltura.com/p/1581781 ... height/428
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dollar_elbow
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Re: All in with Balanced Index fund

Post by dollar_elbow » Mon Apr 17, 2017 5:38 pm

My thoughts are that Balanced Index is less discussed because Vanguard seems more interested in advertising its Target Date funds, so people are less familiar with it, and the Wellington fund somewhat overshadows it in thread conversations about US centric balanced funds.

Luckywon
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Re: All in with Balanced Index fund

Post by Luckywon » Mon Apr 17, 2017 7:53 pm

I think one reason is you could save on expenses by replicating the fund with two other Vanguard funds:

The expense ratio for VBINX is 0.22. The fund is 60 % Total U.S. stock market and 40 % Broad U.S. Bonds.
It seems to me you could replicate the fund by buying 60 % VTSMX (Total U.S. stock market) and 40 % VBMFX (Broad U.S. bonds). The ER of each of these is 0.16. So you would save on the ER by 0.06.

wassabi
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Re: All in with Balanced Index fund

Post by wassabi » Mon Apr 17, 2017 8:19 pm

dexter74 wrote:So I took the plunge and now have VBINX as my sole fund in my Roth. [I'm in the 15% tax-bracket and probably will be until retirement] I'm a newbie investor and if you read some of my prior threads, you'll see I've had a few "hiccups" to start my investing yrs. After much research and deciding my risk tolerance and yrs before retirement [20-25yrs] I'm confident w/ my decision.

I literally just heeded the advice of Jack Bogle to come to my decision. One question though: I know there's a few past threads on this, but wanted to get some current thoughts as to why VBINX isn't more popular? Ask Jack said, VBINX is really all most investors need [or something along those lines]

Again, big thanks to all on here that have chimed in w/ great advice.
Congrats. I think you could do a lot worse than VBINX. If it works for you, then keep it. Forever. Do you have a taxable account too? If not will you in the future? At 15% bracket, VBINX wouldn't be so bad to keep in taxable although most folks in a higher tax bracket try to avoid keeping it in taxable due to the higher rate of taxation on the bonds.

Overall, I think you made a fine choice and if you can contribute often and stay the course you should see some nice gains by the time you retire.

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ScooterBob
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Re: All in with Balanced Index fund

Post by ScooterBob » Mon Apr 17, 2017 8:23 pm

VBIAX has a net expense of .08! It truly is a great fund for someone looking for a 60/40 asset allocation. Not a big fan of international either so this fund fits the bill. It's a good set it and forget it fund.

Bob

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Mon Apr 17, 2017 9:31 pm

I do not have a taxable account and don't think I'll be getting one anytime soon. The lack of international doesn't bother me. I know that's a whole other discussion, but again I'm going with Mr bogles view on that topic. Maybe down the road I'll venture into international.

Thanks for the feedback, as always!

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Taylor Larimore
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Balanced Index Fund ?

Post by Taylor Larimore » Mon Apr 17, 2017 9:44 pm

Dexter74:

Your overall asset-allocation is your most important portfolio consideration. Much more important than any single fund.

Vanguard Balanced Index Fund with its 60% stocks/40% bonds is an excellent low-cost index fund in a tax-advantaged account, but it should fit into your overall stock/bond allocation. In the event it does not, consider one of the Vanguard 12 target funds with more stock/bond allocations to chose from.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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jimb_fromATL
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Re: All in with Balanced Index fund

Post by jimb_fromATL » Mon Apr 17, 2017 10:24 pm

Luckywon wrote:I think one reason is you could save on expenses by replicating the fund with two other Vanguard funds:

The expense ratio for VBINX is 0.22. The fund is 60 % Total U.S. stock market and 40 % Broad U.S. Bonds.
It seems to me you could replicate the fund by buying 60 % VTSMX (Total U.S. stock market) and 40 % VBMFX (Broad U.S. bonds). The ER of each of these is 0.16. So you would save on the ER by 0.06.


However, the difference may be very small. For a long period of time it's hard to even see on some graphs.

To add another thought, I think the "growth" of $10,000" and CAGR (Compound Annual Growth Rate) can be substantially misleading unless you're going to invest a single lump sum and then nothing else for the next 25-40 years. IMO comparing results for dollar-cost-averaging with periodic contributions --every month like a 401(k) or every year like perhaps an IRA -- is a lot more meaningful.

I've written simple spreadsheets for that kind of comparison, and have observed that difference in the end results and average APY can be very significant if you happen to choose a period just before a market crash or unusually good year or two for a single lump sum.

It's also a good idea to compare rolling periods of several years to make a decision rather than just the last decade or two, which include the bad market crash in 2002/3 and the second-worst in history in 2008. (And while on this roll, IMO going back earlier than the last 40 years or so is probably not very meaningful either because times -- and technology-- have changed.

PortfolioVisualizer is the best site I know of where you can do back testing to see how funds have compared to each other with either lump sums or periodic contributions, or both.

It allows more funds in a portfolio than make any real sense in a portfolio. Plus it allows for periodic increases with inflation and lets you compare the results for periodic withdrawals after retirement.

Here's a summary of some backtesting I did for the above funds on PortfolioVisualizer

This is for $1000 per month contributions from January 2000 through March 2017 with a portfolio of 60% VTSMX and 40% VBMFX compared to VBINX ... with old stand-by Wellingon (VWELX) to boot.

In this case, a 60/40 mix of VTSMX and VBMFX with rebalancing yearly did a little better than VBINX by itself and slightly better better than those funds without any rebalancing at all. But as is often the case, Wellington did better than either of the above.

IMO, with such a small difference in a long time in the past, there's nothing to suggest that there might be enough difference to make it worth the trouble to rebalance yourself -- instead of just buying one fund and leaving it alone.

Code: Select all

Portfolio performance statistics	
                    Portfolio	Final Balance
Portfolio 1 60/40 VTSMX/VBMFX	$404,012 
            Portfolio 2 VBINX	$398,048 
            Portfolio 3 VWELX	$440,715 
  	 
           VTSMX 60% no rebal	$281,127 
               VBMFX no rebal	$118,009 
 60% VTSMX 40% VBMFX no rebal	$399,136 
jimb

Luckywon
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Re: All in with Balanced Index fund

Post by Luckywon » Mon Apr 17, 2017 10:33 pm

jimb_fromATL wrote:
Luckywon wrote:I think one reason is you could save on expenses by replicating the fund with two other Vanguard funds:

The expense ratio for VBINX is 0.22. The fund is 60 % Total U.S. stock market and 40 % Broad U.S. Bonds.
It seems to me you could replicate the fund by buying 60 % VTSMX (Total U.S. stock market) and 40 % VBMFX (Broad U.S. bonds). The ER of each of these is 0.16. So you would save on the ER by 0.06.


However, the difference may be very small. For a long period of time it's hard to even see on some graphs.

To add another thought, I think the "growth" of $10,000" and CAGR (Compound Annual Growth Rate) can be substantially misleading unless you're going to invest a single lump sum and then nothing else for the next 25-40 years. IMO comparing results for dollar-cost-averaging with periodic contributions --every month like a 401(k) or every year like perhaps an IRA -- is a lot more meaningful.

I've written simple spreadsheets for that kind of comparison, and have observed that difference in the end results and average APY can be very significant if you happen to choose a period just before a market crash or unusually good year or two for a single lump sum.

It's also a good idea to compare rolling periods of several years to make a decision rather than just the last decade or two, which include the bad market crash in 2002/3 and the second-worst in history in 2008. (And while on this roll, IMO going back earlier than the last 40 years or so is probably not very meaningful either because times -- and technology-- have changed.

PortfolioVisualizer is the best site I know of where you can do back testing to see how funds have compared to each other with either lump sums or periodic contributions, or both.

It allows more funds in a portfolio than make any real sense in a portfolio. Plus it allows for periodic increases with inflation and lets you compare the results for periodic withdrawals after retirement.

Here's a summary of some backtesting I did for the above funds on PortfolioVisualizer

This is for $1000 per month contributions from January 2000 through March 2017 with a portfolio of 60% VTSMX and 40% VBMFX compared to VBINX ... with old stand-by Wellingon (VWELX) to boot.

In this case, a 60/40 mix of VTSMX and VBMFX with rebalancing yearly did a little better than VBINX by itself and slightly better better than those funds without any rebalancing at all. But as is often the case, Wellington did better than either of the above.

IMO, with such a small difference in a long time in the past, there's nothing to suggest that there might be enough difference to make it worth the trouble to rebalance yourself -- instead of just buying one fund and leaving it alone.

Code: Select all

Portfolio performance statistics	
                    Portfolio	Final Balance
Portfolio 1 60/40 VTSMX/VBMFX	$404,012 
            Portfolio 2 VBINX	$398,048 
            Portfolio 3 VWELX	$440,715 
  	 
           VTSMX 60% no rebal	$281,127 
               VBMFX no rebal	$118,009 
 60% VTSMX 40% VBMFX no rebal	$399,136 
jimb
Wonderful analysis and to be honest I'm surprised at the result. I had thought that saving .06 on a baseline of 0.22 % ER was saving more than a quarter of fees and would add up. But I guess the baseline fees are so low it does not add up to much and the issue of rebalancing as you say is also to be considered.

But, how about a 60/40 blend of VTI and BND, two Vanguard ETF's? I think those replicate VBINX pretty closely and the combined ER would be 0.044? ?

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Bogle_Feet
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Re: All in with Balanced Index fund

Post by Bogle_Feet » Mon Apr 17, 2017 10:38 pm

Own VBINX and you're just fine.
BTW 46% of S&P 500 company revenue is International. You don't have to own an international fund in this day and age to get International exposure.

dexter74
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Re: Balanced Index Fund ?

Post by dexter74 » Mon Apr 17, 2017 10:43 pm

Taylor Larimore wrote:Dexter74:

Your overall asset-allocation is your most important portfolio consideration. Much more important than any single fund.

Vanguard Balanced Index Fund with its 60% stocks/40% bonds is an excellent low-cost index fund in a tax-advantaged account, but it should fit into your overall stock/bond allocation. In the event it does not, consider one of the Vanguard 12 target funds with more stock/bond allocations to chose from.

Best wishes.
Taylor
Thanks for the response, Taylor. I'm a 60/40 kinda guy so this is perfect for me. Enough stocks to make gains when the market is good, enough bonds as not to take take in the shorts [too much] when it is not. I love simplicity - and it doesn't get much more simple than vbinx.

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Mon Apr 17, 2017 10:45 pm

Bogle_Feet wrote:Own VBINX and you're just fine.
BTW 46% of S&P 500 company revenue is International. You don't have to own an international fund in this day and age to get International exposure.
I believe Mr. Bogle himself mentioned that, which was good enough for me!

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Mon Apr 17, 2017 10:46 pm

jimb_fromATL wrote:
Luckywon wrote:I think one reason is you could save on expenses by replicating the fund with two other Vanguard funds:

The expense ratio for VBINX is 0.22. The fund is 60 % Total U.S. stock market and 40 % Broad U.S. Bonds.
It seems to me you could replicate the fund by buying 60 % VTSMX (Total U.S. stock market) and 40 % VBMFX (Broad U.S. bonds). The ER of each of these is 0.16. So you would save on the ER by 0.06.


However, the difference may be very small. For a long period of time it's hard to even see on some graphs.

To add another thought, I think the "growth" of $10,000" and CAGR (Compound Annual Growth Rate) can be substantially misleading unless you're going to invest a single lump sum and then nothing else for the next 25-40 years. IMO comparing results for dollar-cost-averaging with periodic contributions --every month like a 401(k) or every year like perhaps an IRA -- is a lot more meaningful.

I've written simple spreadsheets for that kind of comparison, and have observed that difference in the end results and average APY can be very significant if you happen to choose a period just before a market crash or unusually good year or two for a single lump sum.

It's also a good idea to compare rolling periods of several years to make a decision rather than just the last decade or two, which include the bad market crash in 2002/3 and the second-worst in history in 2008. (And while on this roll, IMO going back earlier than the last 40 years or so is probably not very meaningful either because times -- and technology-- have changed.

PortfolioVisualizer is the best site I know of where you can do back testing to see how funds have compared to each other with either lump sums or periodic contributions, or both.

It allows more funds in a portfolio than make any real sense in a portfolio. Plus it allows for periodic increases with inflation and lets you compare the results for periodic withdrawals after retirement.

Here's a summary of some backtesting I did for the above funds on PortfolioVisualizer

This is for $1000 per month contributions from January 2000 through March 2017 with a portfolio of 60% VTSMX and 40% VBMFX compared to VBINX ... with old stand-by Wellingon (VWELX) to boot.

In this case, a 60/40 mix of VTSMX and VBMFX with rebalancing yearly did a little better than VBINX by itself and slightly better better than those funds without any rebalancing at all. But as is often the case, Wellington did better than either of the above.

IMO, with such a small difference in a long time in the past, there's nothing to suggest that there might be enough difference to make it worth the trouble to rebalance yourself -- instead of just buying one fund and leaving it alone.

Code: Select all

Portfolio performance statistics	
                    Portfolio	Final Balance
Portfolio 1 60/40 VTSMX/VBMFX	$404,012 
            Portfolio 2 VBINX	$398,048 
            Portfolio 3 VWELX	$440,715 
  	 
           VTSMX 60% no rebal	$281,127 
               VBMFX no rebal	$118,009 
 60% VTSMX 40% VBMFX no rebal	$399,136 
jimb
Thanks for that, jimb. Not having to rebalance added to the charm of vbinx for me.

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jimb_fromATL
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Re: All in with Balanced Index fund

Post by jimb_fromATL » Mon Apr 17, 2017 11:03 pm

Luckywon wrote:
But, how about a 60/40 blend of VTI and BND, two Vanguard ETF's? I think those replicate VBINX pretty closely and the combined ER would be 0.044? ?
It's easy to do at PortfolioVisualizer ... which I only recently learned about on this forum.

If you register there (for free) you can also download the results to a spreadsheet so you can compare more portfolios with the same or different parameters, and generate your own reports and graphs.

You might find it interesting to compare the results for lump sum versus DCA with periodic investments. It may be an eye-opener.

Notice that it won't allow DCA alone, but you can use $1 as the starting amount, which won't really make any difference since we're just guessing how it might do based on past performance anyway. It also looks like PortFolioVisualizer may be one month short on DCA by starting the periodic contributions at the end of the first year instead of the beginning. But again, it's just an estimate anyway, so it doesn't really matter.

Downloading the summary by month or year also gives total performance data for your own calculations and charting for a lot of funds that I haven't been able to find anywhere else. For instance, the daily, weekly, and monthly historical data adjusted for dividends reinvested can be downloaded with Yahoo's online API (but not yearly data as far as I know ... though it is easy to copy and paste from old-style Yahoo performance page.

Plus, PortVis has historical data for ETFs and some benchmark indices that I haven't been able to find anywhere else.

ANOTHER THREAD about sources of total performance data.

jimb

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Mon Apr 17, 2017 11:16 pm

That is a fantastic site, jimb! I did a hypothetical comparison using the vanguard 500 as benchmark relating to my current scenario [if it ended this yr]: 3k starting in vbinx with max roth contributions for 25 yrs [I didn't factor in the extra"catch up" one can contribute after 50]. Interesting, through we all know "Past performance is not a guarantee of future returns" :wink:

https://www.portfoliovisualizer.com/bac ... sisResults

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Re: All in with Balanced Index fund

Post by jimb_fromATL » Mon Apr 17, 2017 11:22 pm

dexter74 wrote:That is a fantastic site, jimb! I did a hypothetical comparison using the vanguard 500 as benchmark relating to my current scenario [if it ended this yr]: 3k starting in vbinx with max roth contributions for 25 yrs [I didn't factor in the extra"catch up" one can contribute after 50]. Interesting, through we all know "Past performance is not a guarantee of future returns" :wink:

https://www.portfoliovisualizer.com/bac ... sisResults
Have you ever thought about the fact that all of the "technical indicators" and theories that some folks think are better than backtesting are actually based on how those indicators have worked in the past?

In other words, all the indicators can do is give you other ways to predict the future based on past performance.

jimb

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Mon Apr 17, 2017 11:32 pm

jimb_fromATL wrote:
dexter74 wrote:That is a fantastic site, jimb! I did a hypothetical comparison using the vanguard 500 as benchmark relating to my current scenario [if it ended this yr]: 3k starting in vbinx with max roth contributions for 25 yrs [I didn't factor in the extra"catch up" one can contribute after 50]. Interesting, through we all know "Past performance is not a guarantee of future returns" :wink:

https://www.portfoliovisualizer.com/bac ... sisResults
Have you ever thought about the fact that all of the "technical indicators" and theories that some folks think are better than backtesting are actually based on how those indicators have worked in the past?

In other words, all the indicators can do is give you other ways to predict the future based on past performance.

jimb
Well said, my friend.

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Re: All in with Balanced Index fund

Post by whodidntante » Mon Apr 17, 2017 11:42 pm

A lot of investors prefer a different asset allocation, or to implement a glide path, implement factor tilts, or to slice and dice. I haven't ever bought a balanced fund and I don't currently have plans to. But if it works for you, :sharebeer

Dandy
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Re: All in with Balanced Index fund

Post by Dandy » Tue Apr 18, 2017 6:12 am

Balanced Index is by far the largest holding I'm my TIRA. Sometimes a very good, simple choice is overlooked when there ate so many very good options. Any balanced fund or all in one fund usually requires some compromise. e.g. you really wanted 65% equities but "settle" for 60%, or you wanted international equities and Balanced Index doesn't fit that bill. 60/40 is a bit too aggressive for me so I added some other funds to my TIRA to get my overall allocation in line with my risk tolerance.

The Balanced Index fund has more than 32 billion in assets so you aren't alone. :happy

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Re: All in with Balanced Index fund

Post by MarvinK » Tue Apr 18, 2017 11:28 am

Vanguard Balanced Index Fund is the largest holding in my Roth IRA.
I added an international and then I tinkered, ala core and explore if you will.

The Balanced Fund was the best choice I made!

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Tue Apr 18, 2017 1:13 pm

Thanks for all the replies. I was torn between vbinx and wellesley, but decided for passive for a few different reasons. Now if I can just make my monthly contributions for the next 25 yrs without tinkering..... :wink:

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Re: All in with Balanced Index fund

Post by Artsdoctor » Wed Apr 19, 2017 12:07 pm

dexter74 wrote:Thanks for all the replies. I was torn between vbinx and wellesley, but decided for passive for a few different reasons. Now if I can just make my monthly contributions for the next 25 yrs without tinkering..... :wink:
If at any point you'd like to include international in your 60/40 split, LifeStrategy Moderate Growth would also do that for you.

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Wed Apr 19, 2017 2:19 pm

Artsdoctor wrote:
dexter74 wrote:Thanks for all the replies. I was torn between vbinx and wellesley, but decided for passive for a few different reasons. Now if I can just make my monthly contributions for the next 25 yrs without tinkering..... :wink:
If at any point you'd like to include international in your 60/40 split, LifeStrategy Moderate Growth would also do that for you.
I did consider that, but I'm not as hot on the need for international exposure as many others are and I'm also not crazy about actively managed funds. Thanks for the reply!

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Re: All in with Balanced Index fund

Post by Artsdoctor » Wed Apr 19, 2017 2:32 pm

dexter74 wrote:
Artsdoctor wrote:
dexter74 wrote:Thanks for all the replies. I was torn between vbinx and wellesley, but decided for passive for a few different reasons. Now if I can just make my monthly contributions for the next 25 yrs without tinkering..... :wink:
If at any point you'd like to include international in your 60/40 split, LifeStrategy Moderate Growth would also do that for you.
I did consider that, but I'm not as hot on the need for international exposure as many others are and I'm also not crazy about actively managed funds. Thanks for the reply!
Dexter,

The LifeStrategy funds are not actively managed. They combine Total Stock, Total International, Total Bond, and International Bond. They maintain the same ratios throughout, as opposed to target funds which use a glidepath.

However, if you don't want or need international, then stay with the Balanced Fund.

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Re: All in with Balanced Index fund

Post by dodecahedron » Wed Apr 19, 2017 2:42 pm

Artsdoctor wrote:
dexter74 wrote:
Artsdoctor wrote:
dexter74 wrote:Thanks for all the replies. I was torn between vbinx and wellesley, but decided for passive for a few different reasons. Now if I can just make my monthly contributions for the next 25 yrs without tinkering..... :wink:
If at any point you'd like to include international in your 60/40 split, LifeStrategy Moderate Growth would also do that for you.
I did consider that, but I'm not as hot on the need for international exposure as many others are and I'm also not crazy about actively managed funds. Thanks for the reply!
Dexter,

The LifeStrategy funds are not actively managed. They combine Total Stock, Total International, Total Bond, and International Bond. They maintain the same ratios throughout, as opposed to target funds which use a glidepath.

However, if you don't want or need international, then stay with the Balanced Fund.
But Lifestrategy have been actively managed in the past and they have not had a track record for holding to consistent asset allocation, which makes me a bit leery of counting on them to stay the course in the future.

http://www.obliviousinvestor.com/vangua ... egy-funds/

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Artsdoctor
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Re: All in with Balanced Index fund

Post by Artsdoctor » Wed Apr 19, 2017 2:47 pm

^ It is true that if you're going to consider LifeStrategy funds, you're going to have to look beneath the hood from time to time to make sure significant changes have not occurred. If at any point the LifeStrategy fund you're holding veers away from your needs, you can sell it without any problems as long as it's held in a tax-advantaged account.

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Tamarind
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Re: All in with Balanced Index fund

Post by Tamarind » Wed Apr 19, 2017 3:12 pm

I advised my parents who are approaching retirement to hold only VBIAX (Balanced Admiral). They are too scared of currency fluctuations to want international. I didn't feel the point was worth arguing, since the goal was to get them to reduce stocks in AA and remove temptation for my dad to market time.

I'm 30 years younger and consider international diversification important, so it's not the fund for me. But it's one of the best, cheapest funds out there for all-in-one investing. If it works for you, go with it!

dexter74
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Re: All in with Balanced Index fund

Post by dexter74 » Wed Apr 19, 2017 5:00 pm

Tamarind wrote:I advised my parents who are approaching retirement to hold only VBIAX (Balanced Admiral). They are too scared of currency fluctuations to want international. I didn't feel the point was worth arguing, since the goal was to get them to reduce stocks in AA and remove temptation for my dad to market time.

I'm 30 years younger and consider international diversification important, so it's not the fund for me. But it's one of the best, cheapest funds out there for all-in-one investing. If it works for you, go with it!
Thanks, everyone. Once I really had a handle on what I wanted, VBINX was the obvious choice for me. I love the simplicity, low ER, no rebalancing, passive indexing, etc, it was no brainer. I know it's certainly not for everyone, but I wanted a simple, "set it and forget it" 60/40 balanced fund that Vanguard wouldn't be tweaking down the road. BAM.

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stemikger
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Re: All in with Balanced Index fund

Post by stemikger » Sat Oct 14, 2017 6:18 am

dexter74 wrote:
Wed Apr 19, 2017 5:00 pm
Tamarind wrote:I advised my parents who are approaching retirement to hold only VBIAX (Balanced Admiral). They are too scared of currency fluctuations to want international. I didn't feel the point was worth arguing, since the goal was to get them to reduce stocks in AA and remove temptation for my dad to market time.

I'm 30 years younger and consider international diversification important, so it's not the fund for me. But it's one of the best, cheapest funds out there for all-in-one investing. If it works for you, go with it!
Thanks, everyone. Once I really had a handle on what I wanted, VBINX was the obvious choice for me. I love the simplicity, low ER, no rebalancing, passive indexing, etc, it was no brainer. I know it's certainly not for everyone, but I wanted a simple, "set it and forget it" 60/40 balanced fund that Vanguard wouldn't be tweaking down the road. BAM.
Just a reminder, John Bogle invests all the money he gives to his Grandchildren in this fund. I'm guessing they are around the same age as you.

https://www.youtube.com/watch?v=y_tHhGtX-lA
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

lostdog
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Re: All in with Balanced Index fund

Post by lostdog » Sat Oct 14, 2017 7:56 am

Excellent fund for someone not interested in international exposure and keeping a balanced approach. Set it and forget it.
"Our life is frittered away by detail. Simplify, simplify." -Thoreau

Johm221122
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Re: All in with Balanced Index fund

Post by Johm221122 » Sat Oct 14, 2017 8:20 am

Dexter74
isn't more popular


One reason people don't mention it or recommend it more because it is not an option in most people's workplace plans and mixing balanced funds with your other investments gets complicated

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packet
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Re: All in with Balanced Index fund

Post by packet » Sat Oct 14, 2017 9:07 am

Don't look back...
... never look back.

:beerCheers,
packet
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txranger
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Re: All in with Balanced Index fund

Post by txranger » Sat Oct 14, 2017 9:50 am

K what do u use in taxable account? Tax managed balanced? I m in 33% marginal bracket.would like International exposure. Lifestratege moderate? I looked at tax cost ratios, was about 0.8-1 for lifestrategy, 0.7-0.8 for regular balanced and 0.5-0.8 for tax managed. So tax managed maybe 0.3% better that lifestrategy w a bit less volatility. They had similar returns since 1994 I think too

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nisiprius
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Re: All in with Balanced Index fund

Post by nisiprius » Sat Oct 14, 2017 10:01 am

dexter74 wrote:
Mon Apr 17, 2017 3:22 pm
...why VBINX isn't more popular? Ask Jack said, VBINX is really all most investors need...
There is a very broad range of balanced funds that could quite arguably be "all most investors really need." Here are a few, off the top of my head, and the amount of assets each holds. I note that you have 20-25 years until retirement so your retirement year would be about 2040.

Vanguard Wellington Fund, VWELX: $102 billion (currently 65/35, actively managed, currently about 12% international)

Vanguard Balanced Index Fund, VFINX: $35 billion

Target Retirement 2040, VFORX, $22 billion. If you include all the target retirement funds that might be considered alternatives to Balanced Index, it's probably more like $60 billion or so.

Lifestrategy Moderate Growth, VSMGX: $15 billion. Currently 60/40, fixed allocation, with Vanguard's currently-suggested international allocations.

So, I would say that Balanced Index is reasonably popular.
Last edited by nisiprius on Sat Oct 14, 2017 11:45 am, edited 1 time in total.
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Dandy
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Re: All in with Balanced Index fund

Post by Dandy » Sat Oct 14, 2017 10:01 am

I really like the Balanced index fund and wish they had a series of them with different equity/fixed income allocations. I think the reason it isn't more popular is that more "sophisticated" balanced funds e.g. Target Date and Life Strategy Funds have become more popular. I'm not a fan of those because VG has and reserves the right to change the funds included, the allocation and for TD fund the glide path. Their relatively recent changes were to add more international equities and international bonds. So to me they are kind of a slow motion active fund.

When you choose a balanced fund you usually are compromising on something. e.g. you might want a bit less of an allocation to equities, or in the case of the Balanced Index fund you might want it to include some international equities. Simplicity has its virtues and can have some vices especially if you want one fund to do it all.

I like to know what I am buying and don't want the Vanguard "experts" tinkering with my investments, even with the best of intentions. While Vanguard is a great company their "experts" have no claim to being superior to the "experts" that run every active fund.

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Ricola
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Re: All in with Balanced Index fund

Post by Ricola » Sat Oct 14, 2017 10:35 am

I really like the balanced index fund VBIAX for tax-deferred accounts. It will work out nicely when RMDs start. Withdrawals will come out perfectly balanced. Investing to withdrawal, as simple as can be possible.

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