VASGX - What to do? [VG LifeStrategy Growth]

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acwick
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Joined: Sun Oct 28, 2018 11:28 pm

VASGX - What to do? [VG LifeStrategy Growth]

Post by acwick » Sun Oct 28, 2018 11:32 pm

Hi guys,

Hoping you all can help me as this is my first post here. Last year, I invested $5500 into a Roth IRA - VASGX. This year I contributed $2000.00. Since this time, VASGX has continuously declined. My 7500 dollars has lost a little over $400.00 and it has not even been one year. As this is my first investment, should I be concerned? Is there a better place to put my money? I am 31 years old and I am now trying to build a nest egg that I will not touch until retirement as I just began my first actual career. Please let me know any and all suggestions. Greatly appreciate your help!

PFInterest
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by PFInterest » Mon Oct 29, 2018 6:02 am

acwick wrote:
Sun Oct 28, 2018 11:32 pm
Hi guys,

Hoping you all can help me as this is my first post here. Last year, I invested $5500 into a Roth IRA - VASGX. This year I contributed $2000.00. Since this time, VASGX has continuously declined. My 7500 dollars has lost a little over $400.00 and it has not even been one year. As this is my first investment, should I be concerned? Is there a better place to put my money? I am 31 years old and I am now trying to build a nest egg that I will not touch until retirement as I just began my first actual career. Please let me know any and all suggestions. Greatly appreciate your help!
So you are worrying you won't make it with 34 years to go.....

Bigger concern, why have you not maxed out your rIRA yet? It's literally on sale....

Lots to learn.

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Toons
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by Toons » Mon Oct 29, 2018 6:06 am

acwick wrote:
Sun Oct 28, 2018 11:32 pm
Hi guys,

Hoping you all can help me as this is my first post here. Last year, I invested $5500 into a Roth IRA - VASGX. This year I contributed $2000.00. Since this time, VASGX has continuously declined. My 7500 dollars has lost a little over $400.00 and it has not even been one year. As this is my first investment, should I be concerned? Is there a better place to put my money? I am 31 years old and I am now trying to build a nest egg that I will not touch until retirement as I just began my first actual career. Please let me know any and all suggestions. Greatly appreciate your help!
I would suggest steadily contributing and holding for a couple of decades,minimum.
I purchased the fund in 1997 and steadily contributed the maximum to My Roth Ira for 15 years...
Through Bull and Bear Markets....
I welcomed the Bear Markets along the way as I was obtaining more shares at depressed prices.
Remember ,Mutual Funds are compounding machines.
Give them decades to work for you.
The year to year stuff,,ignore.
Time Is Your Ally.
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

z3r0c00l
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by z3r0c00l » Mon Oct 29, 2018 6:17 am

Although your concern is palpable, a change in investment value of $400 in just under a year is trivial in the scheme of things. You will earn in all likelihood over a million dollars during your working life. At 36 with a few more years of saving than you, I now see daily swings of $1000 or more. Many on this forum see tens of thousands. This is the nature of stocks, they offer high risk and likely high reward.

johnz1001
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by johnz1001 » Mon Oct 29, 2018 6:31 am

Believe me, don't worry about it. If I had been 31 I probably would have fretted over it, too, and I did. But I was wrong to change anything. Leave it alone for 25 years and keep adding money systematically. You're on the right path by investing, and you won't regret it. It's a solid fund for someone of your age.

racy
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by racy » Mon Oct 29, 2018 6:33 am

Some perspective from an old guy --
I've got records of my monthly net worth for the past 28.8 years. 250 months (72%) were UP months. 95 months (28%) were down months. Such is the stock market. Keep investing. Stay the course.
Read this: https://www.bogleheads.org/wiki/Getting_started

Grt2bOutdoors
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by Grt2bOutdoors » Mon Oct 29, 2018 6:35 am

Concerns are understandable - long ago I made a $450 investment and promptly watched it go to $320. I held it, watched it go from $320 to $3,000.

The key here is the word “investment”. An investment is a long term vehicle, a year is not long term, 30 years is long-term. Saving for retirement is a marathon, not a sprint. If you think having a $450 temporary devaluation in your assets is significant, what will you do when you account declines $10k+ in a day? As your account balance grows, so will these fluctuations- both up and down. Get used to it, this is what investing is like. If you think being down 9% is bad, how about those who are in small cap funds or emerging market funds?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

rkhusky
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by rkhusky » Mon Oct 29, 2018 6:53 am

Since you will not withdraw the money for 30 years, instead of imagining what the value will be next week, consider what you expect the value to be 30 years from now. If you expect the value to be less than $7500 in 30 years, you should find a different investment. I would expect your $7500 to be worth more than $20,000 in 30 years, in today's dollars.

sambb
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by sambb » Mon Oct 29, 2018 7:05 am

you need to have a long term time horizon, over 10 years.

yohac
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by yohac » Mon Oct 29, 2018 7:30 am

acwick wrote:
Sun Oct 28, 2018 11:32 pm
Is there a better place to put my money?
Not really, and any alternative recommendation is just a guess. For a single fund for someone in your position, it's a very good choice.

tibbitts
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by tibbitts » Mon Oct 29, 2018 7:39 am

There are different places to put your money, not necessarily better. When you invested you assumed risks, and so far the risk has played out to some degree. You could have invested a year ago at 1% "safely" and assumed inflation risk (and lost maybe 2% of your investment, so less) but you chose not to. Whatever your losses are, you have of course lost more in real terms than the nominal returns for you fund.

We tend to minimize the odds of failure over time, but a lifetime of investing in any combination of equities, bonds, or cash does not provide any guarantees of success, particularly in real dollar terms. In the U.S. especially we have had a long string of successes and based on that it's difficult for us to realize that losses of reasonable investments over an entire investing lifetime are possible - and given enough time, probably likely to happen, we just haven't experienced a sufficiently large sample of investing lifetimes yet to have seen that occur for a person with a typical lifespan.

Mr. Jelly
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by Mr. Jelly » Mon Oct 29, 2018 9:45 am

What you are describing is the basic issue in learning about investing. At least index investing. First I'd suggest getting the Boglehead book on investing. It seems that you aren't aware of how it works. Markets go up and down. Don't ignore or discount the down aspect because it does happen all the time. Though over time the market has gone up. Though it may not move up for years at a time. What makes investing as you are work is that you are invested and ready to receive the gains when they happen. If you move or get out then you have just lost as you lock in the loss and are not staged when the market raises. This is a simplistic description. I personally think you are doing great and should continue as you are. Twenty to thirty years from now you will be amazed at how much money you'll have. Often investing as you are is the only way most working stiffs can become somewhat wealthy.

MJW
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by MJW » Mon Oct 29, 2018 3:23 pm

acwick wrote:
Sun Oct 28, 2018 11:32 pm
Hi guys,

Hoping you all can help me as this is my first post here. Last year, I invested $5500 into a Roth IRA - VASGX. This year I contributed $2000.00. Since this time, VASGX has continuously declined. My 7500 dollars has lost a little over $400.00 and it has not even been one year. As this is my first investment, should I be concerned? Is there a better place to put my money? I am 31 years old and I am now trying to build a nest egg that I will not touch until retirement as I just began my first actual career. Please let me know any and all suggestions. Greatly appreciate your help!
For some time your contributions will likely outweigh any market-based movements. So throw some more money in there and pretend like it never happened. :)

And think of it this way: If we knew of an investment that did nothing but continually appreciate in value, we would all be in that and there wouldn't be any need for you to try to pick a fund on your own. You made a good choice. No reason to bail on it. You have what should be many years of saving ahead of you. This shouldn't even constitute a blip on the radar. I recommend you continue to read up and improve your understanding of investing.
Last edited by MJW on Mon Oct 29, 2018 5:39 pm, edited 1 time in total.

MotoTrojan
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by MotoTrojan » Mon Oct 29, 2018 3:26 pm

No problem. More important is that you may be able to invest more tax-efficiently by putting equities in taxable and bonds in tax-advantaged.

Before that though you just need to be maxing your tax-advantaged. Do you have a Roth? If not, I'd sell $5500 of this and re-buy it in your 2018 Roth. Any growth will be tax-free and you'll save a few bucks on taxes for writing off the loss. Add another $5500 in January (could sell from this too, especially if at a loss) and if you have a 401k start contributing there as well.

In 401k/Roth these LIfeStrategy type funds are perfect investments. Target Retirements are too.

dalbright
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by dalbright » Mon Oct 29, 2018 4:23 pm

Buy more while its cheap! I'm 30 and in a similar situation as I've just started to focus strongly on retirement as my career and life have become more stable. My investment went down a similar amount since starting but as others have mentioned...We're in it for the long haul. I enjoy looking at the past returns for funds and seeing how things really smooth out over the course of 30 years. The past doesn't predict the future but its nice to see the big picture historically sometimes :).

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Toons
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Re: VASGX - What to do? [VG LifeStrategy Growth]

Post by Toons » Mon Oct 29, 2018 4:33 pm

In Black and White
From the Vanguard Website

"Investors with a long-term time horizon who are looking for growth of principal over time and Who CAN ACCEPT stock market volatility may wish to consider this fund."





:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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