Life Strategy Income Fund vs Wellesley

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J_Markov
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Life Strategy Income Fund vs Wellesley

Post by J_Markov » Thu Mar 04, 2010 4:53 pm

Hi, I'm new to this board.

I have some extra money I want to park and won't use for at least the next 5 years. I've been doing some research on where to invest the money and have narrowed it down to either life strategy income fund (VASIX) or Wellesley (VWINX). I already have enough cash to cover 6 months of expenses, and have maximized my retirement accounts. I was just wondering which of these funds would be a better investment considering the current market situation. The amount of money is low 5 figures. I'll appreciate any advise. Thanks in advance.

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SpringMan
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Post by SpringMan » Thu Mar 04, 2010 6:10 pm

Welcome to the forum. Of the two funds you mentioned, I prefer Wellesley Income. The Vanguard Life Strategy funds contain a slice of the Vanguard Asset Allocation fund, a fund that changes its stock to bond ratio depending on a computer model, so you never know what it will be in the future. Also, consider Vanguard Target Retirement Income fund. Some use both, it and Wellesley for retirement.
Best Wishes, SpringMan

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Sheepdog
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Location: Indiana, retired 1998 at age 65

Post by Sheepdog » Thu Mar 04, 2010 6:37 pm

At one time I did hold Life Strategy Income. I did not like the Asset Allocation within it. I changed to Target Income some years ago. Today, the two funds in which I have the most invested are Target Income and Wellesley Income (Admiral shares) at almost 50% each. I have been very pleased with the income performance in up and down markets.
Just to let you know, these are my major funds because I am retired and taking distributions for expenses. It is right for me, but may not be the right combo for an investor in the accumulation phase.
Please realize that these funds could drop in value and may not be the best place to "park" the funds if you absolutely will need it in 5 years. Taking a little risk to get a little more reward, though, may be what you are looking for?
Jim
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

KyleAAA
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Post by KyleAAA » Thu Mar 04, 2010 6:44 pm

I would go with Wellesley or maybe tax-managed balanced index fund depending on your tax bracket.

J_Markov
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Post by J_Markov » Thu Mar 04, 2010 7:10 pm

Thanks for all the informative advise.

Sheepdog,

I don't really need the money in 5 years. I can definitely wait longer until using it. I was more thinking in roughly that time i'd one to use it to buy a property, but it's nothing really fixed.

KyleAAA,

I'm actually in a high tax bracket. I just took a look at Vanguard Intermediate-Term Tax-Exempt Fund (VWIUX). I'm considering doing half VWIUX and half Wellesley. This way seems to be a very conservative approach. I can give it 3 years or so and then readjust in case I'm not happy. Any advise on this.

Thanks again!

knowmad
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Post by knowmad » Fri Mar 05, 2010 12:32 am

I'm a big fan of VWIUX for taxable fixed income. If I were you I'd go with VWIUX and Total Stock Market since you are in a high tax bracket.

RabbMD
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Post by RabbMD » Fri Mar 05, 2010 10:00 pm

Isn't it vwitx?

knowmad
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Post by knowmad » Fri Mar 05, 2010 10:32 pm

RabbMD wrote:Isn't it vwitx?
VWIUX is the admiral shares equivalent of VWITX, with a slightly lower expense ratio and slightly higher yield.

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