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Vanguard Roth Performance

Posted: Tue Sep 15, 2020 12:00 am
by summerof42
Thank you in advance for your input and answer to my question. My Roth IRA is presently invested in VTWNX. At 65.5 years young, I'm presently 60/40.

Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500? As much as I'm risk adverse, I am willing to stray a tiny bit since I'm still working and contributing. Oh heck, why not also throw Life Strategy and Wellesley into this scenario.

I'm getting ready to contribute $7k to my Roth fund and thought now is the time to make sure I'm invested wisely and moving in the right direction.

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 12:09 am
by brad.clarkston
Possibly but is it worth your time to re-balance yearly? I also doubt it would make that much of a deference ether way.

Wellesley is a good 40/60 active fund (like your target date) and might do better in the future than your target date, but it might not.
That comes down to how much faith you have in the managers of the two funds. I would do one or the other after researching the funds more.

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 12:10 am
by retired@50
summerof42 wrote: Tue Sep 15, 2020 12:00 am Thank you in advance for your input and answer to my question. My Roth IRA is presently invested in VTWNX. At 65.5 years young, I'm presently 60/40.

Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500? As much as I'm risk adverse, I am willing to stray a tiny bit since I'm still working and contributing. Oh heck, why not also throw Life Strategy and Wellesley into this scenario.

I'm getting ready to contribute $7k to my Roth fund and thought now is the time to make sure I'm invested wisely and moving in the right direction.
Why the focus on short term performance?

It's not hard to find a fund or a portfolio that did better than what you hold. Nearly every investor can find a better combination of assets after the fact. My advice is: Don't do this to yourself. Keep your thoughts on things you can control.

Regards,

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 12:16 am
by summerof42
@Retired@50 - thanks for your great input, much appreciate it. The reason for my inquiry as of Jan '20 is manly due to the crazy market we experienced these last few months and gives me somewhat of an idea if my current fund choice is the best; particularly moving forward.

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 6:39 am
by rkhusky
Stay the course with your TR 2020 fund (VTWNX). No one knows what the future holds.

Since TR 2020 is currently at 50/50, I presume you have other holdings that bring your total up to an AA of 60/40.

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 7:09 am
by midareff
brad.clarkston wrote: Tue Sep 15, 2020 12:09 am Possibly but is it worth your time to re-balance yearly? I also doubt it would make that much of a deference ether way.

Wellesley is a good 40/60 active fund (like your target date) and might do better in the future than your target date, but it might not.
That comes down to how much faith you have in the managers of the two funds. I would do one or the other after researching the funds more.
Including turning the computer on that's got to take what... ?? Two minutes once a year at most?

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 9:44 am
by summerof42
@rkhusky - yes, my other funds are in two 401ks held in VTSAX, VFIAX, VBTLX, FXNAX and also a tIRA at Vanguard in the target 2025.

In addition, I have a small flexible premium deferred annuity which is fixed at 3% which I consider as part of my bonds. I have not annuitized as of yet and will make a decision in a year or two what I wish to do in adding more funds or roll the funds to Vanguard without any fees.

I know everyone will eat me alive here for the annuity, but where can you find fixed anything at 3% today! There are no fees for owning this annuity (great company - Modern Woodmen of America, a non-profit organization) or even if I decide to annuitize. I purchased in 2009 and I also can rollover any additional pre-tax dollars from 401k to this annuity (max $30k) if I chose to do so. I'm actually thinking about rolling another $30k next year which would provide $515 a month for life. As mentioned earlier, since I'm risk adverse, I'm comfortable with this decision.

I also own a CD which I purchased last year thanks to an OP (MikeG62) on this site who made us aware of a 3.25% rate for a 3-yr CD.

Re: Vanguard Roth Performance

Posted: Tue Sep 15, 2020 11:04 am
by brad.clarkston
midareff wrote: Tue Sep 15, 2020 7:09 am
brad.clarkston wrote: Tue Sep 15, 2020 12:09 am Possibly but is it worth your time to re-balance yearly? I also doubt it would make that much of a deference ether way.

Wellesley is a good 40/60 active fund (like your target date) and might do better in the future than your target date, but it might not.
That comes down to how much faith you have in the managers of the two funds. I would do one or the other after researching the funds more.
Including turning the computer on that's got to take what... ?? Two minutes once a year at most?
If your only taking 2 minutes to do anything your doing it wrong.

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 7:30 am
by midareff
brad.clarkston wrote: Tue Sep 15, 2020 11:04 am
midareff wrote: Tue Sep 15, 2020 7:09 am
brad.clarkston wrote: Tue Sep 15, 2020 12:09 am Possibly but is it worth your time to re-balance yearly? I also doubt it would make that much of a deference ether way.

Wellesley is a good 40/60 active fund (like your target date) and might do better in the future than your target date, but it might not.
That comes down to how much faith you have in the managers of the two funds. I would do one or the other after researching the funds more.
Including turning the computer on that's got to take what... ?? Two minutes once a year at most?
If your only taking 2 minutes to do anything your doing it wrong.
So I guess you spent the time to construct your programmed excel spreadsheets which tell you exactly in dollars and percentages your variations from target(s), if any, and after a Morningstar export of the most current data any transactions needed outside the set rebalance bands are specified in exact amounts. If you don't have this kind of data at your finger tips upon demand, let alone yearly, the one chugging away with a dull pencil trying to figure things out is you brad. If it takes longer than two minutes to figure this stuff out in today's world you aren't doing it right..

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 8:20 am
by Johm221122
summerof42 wrote: Tue Sep 15, 2020 12:16 am The reason for my inquiry as of Jan '20 is manly due to the crazy market we experienced these last few months and gives me somewhat of an idea if my current fund choice is the best; particularly moving forward.
No this market is not crazy and this "market" does not determine future.
Pick an asset allocation that fits your situation and then stay the course. Turn off the noise

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 8:33 am
by Brianmcg321
VTWNX is currently a 50/50 stock/bond allocation.

If you were 100% stocks would you have enjoyed the 20% reduction in your account Feb-March?I know I wouldn’t have. I’m sure the ride back up would have been nice, but hindsight is 20/20.

https://www.portfoliovisualizer.com/bac ... ion1_1=100

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 11:37 am
by ruralavalon
summerof42 wrote: Tue Sep 15, 2020 12:00 am Thank you in advance for your input and answer to my question. My Roth IRA is presently invested in VTWNX. At 65.5 years young, I'm presently 60/40.

Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500? As much as I'm risk adverse, I am willing to stray a tiny bit since I'm still working and contributing. Oh heck, why not also throw Life Strategy and Wellesley into this scenario.

I'm getting ready to contribute $7k to my Roth fund and thought now is the time to make sure I'm invested wisely and moving in the right direction.
Vanguard Target Retirement 2020 Fund (VTWNX) is a good choice, currently a 50/50 asset allocation.

Why make this more complex?

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 11:49 am
by MotoTrojan
summerof42 wrote: Tue Sep 15, 2020 12:00 am Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500?
Since January 2020 if you had been in TSLA you'd have a 412% gain.

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 11:56 am
by TheDDC
MotoTrojan wrote: Wed Sep 16, 2020 11:49 am
summerof42 wrote: Tue Sep 15, 2020 12:00 am Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500?
Since January 2020 if you had been in TSLA you'd have a 412% gain.
Yes. Another perspective on this is if you needed to cash out now on that “easy money” then your gain would most likely be cut into a third by taxes. Everything’s relative!

I would say if you want to add to your portfolio and are okay with the ups and downs occasionally then I would start dollar cost averaging into VTI/VTSAX 100%.

-TheDDC

Re: Vanguard Roth Performance

Posted: Wed Sep 16, 2020 6:32 pm
by Doctor Rhythm
summerof42 wrote: Tue Sep 15, 2020 12:16 am The reason for my inquiry as of Jan '20 is manly due to the crazy market we experienced these last few months and gives me somewhat of an idea if my current fund choice is the best; particularly moving forward.
You’re essentially betting that the last 6 months past performance predicts future returns over years, which is something you would probably never say out loud.

Re: Vanguard Roth Performance

Posted: Wed Sep 23, 2020 5:58 pm
by chicks
Well, that was scary - VTWNX was originally showing a 6.21% decline today! Quickly checked all its component funds, none of which was down by more than 2.4%, so I know it HAD to be a mistake (Vanguard has done this before). Thankfully, they had it corrected within an hour, down just 0.95%. Whew!

I wonder how the heck these errors can happen? Surely the calculations are automated...

Re: Vanguard Roth Performance

Posted: Wed Sep 23, 2020 8:20 pm
by Munir
MotoTrojan wrote: Wed Sep 16, 2020 11:49 am
summerof42 wrote: Tue Sep 15, 2020 12:00 am Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500?
Since January 2020 if you had been in TSLA you'd have a 412% gain.
What is TSLA?

Re: Vanguard Roth Performance

Posted: Wed Sep 23, 2020 8:22 pm
by MotoTrojan
Munir wrote: Wed Sep 23, 2020 8:20 pm
MotoTrojan wrote: Wed Sep 16, 2020 11:49 am
summerof42 wrote: Tue Sep 15, 2020 12:00 am Since Jan '20, would I have faired better if I had been invested in VG Total Bond or VG 500?
Since January 2020 if you had been in TSLA you'd have a 412% gain.
What is TSLA?
Tesla. It’s a joke but gets my point across. Longterm risk adjusted return is what matters.