[Considering the Vanguard LifeStrategy Fund]

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Wed Jul 11, 2018 9:39 am

smectym wrote:
Wed Jul 11, 2018 9:14 am
We like LifeStrategy and are migrating assets to it from Schwab.
It’s fine to refer to LifeStrategy as a “one fund solution” but it’s not really—it’s a four fund solution, and you have to decide between 4 different allocations of those 4 funds. The investor needs to look under the hood and have a basic understanding of the moving parts (2 stock funds, one U.S.-centric and one international, a 2 analogously differentiated bond funds as well).
Sure, once you’ve settled on which particular allocation of the 4 funds suits your investing goals and risk tolerance, and you say, OK, I guess I’m going with, e.g., LifeStrategy Moderate Growth, then your specific 4-fund blend is assigned its own unique ticker symbol (in this case VSMGX) and you can think about that as “a one fund solution” if you prefer. But hey—you really have 4 funds.

Perhaps not a profound observation, but contrast with other balanced fund approaches, such as Vanguard Wellington or Wellesley, or the venerable Fidelity Puritan. These aren’t “funds of funds.” In such cases it’s perhaps more accurate to describe these as “one fund solutions.” Look under the hood of these funds and you’ll find different stocks and different bonds—but not a lot of other Vanguard or Fidelity funds or ETF’s.

Smectym
Thank you. Sufficiently profound. With VSMGX and other Life Strategy funds being a true funds of funds, it does make sense to look at it as 4 funds being automatically re-balanced to suit the allocation of the particular LS fund. By coincidence, I was just last night looking at the Puritan fund and saw that it is not a FOF. The performance of the Puritan fund has been roughly 1% better than VSMGX over recent years, and I wonder why. Today I will begin to dig into the details.

User avatar
Index Fan
Posts: 2552
Joined: Wed Mar 07, 2007 12:13 pm
Location: The great Midwest

Re: [Considering the Vanguard LifeStrategy Fund]

Post by Index Fan » Wed Jul 11, 2018 10:15 am

Vanguard LifeStrategy Growth was my first Vanguard fund back in the 90s.

Good funds.
"Optimum est pati quod emendare non possis." | -Seneca

HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Wed Jul 11, 2018 10:43 am

Index Fan wrote:
Wed Jul 11, 2018 10:15 am
Vanguard LifeStrategy Growth was my first Vanguard fund back in the 90s.

Good funds.
Thanks

User avatar
ruralavalon
Posts: 13745
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: [Considering the Vanguard LifeStrategy Fund]

Post by ruralavalon » Wed Jul 11, 2018 11:29 am

Welcome to the forum :) .

HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I took on an advisor nearly a year ago, with 1% fee, and my goal was to get my investments as well diversified as possible. I finally came to the conclusion after many years of investing, mostly through an advisor, that Jack Bogle had it all right with complete diversification, weighted for age, goals, personal finances, etc.
The portfolio has been set up with a 60/40 ration, with diversification of US, foreign, emerging markets, and intermediate term corporate bonds.
All is invested in 20 very low-cost ETFs, many of which are Vanguard.
My question revolves around finding a lower-cost methodology for the portfolio by releasing the advisor and trading the 20 for even fewer ETFS, and am considering the Vanguard Life Strategy Fund (.13%) as the primary fund.
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
Anyone have thoughts or experiences with this?
Thanks for any help you might give.
Avoiding that 1% fee will greatly increase your net returns.

Vanguard LifeStrategy Moderate Growth (VSMGX) is a reasonable choice for a 60/40 stock/bond asset allocation fund.


HickoryHill wrote:
Tue Jul 10, 2018 7:57 am
Toons wrote:
Mon Jul 09, 2018 9:32 pm
Vanguard Life Strategy Fund
Great Idea...

I Currently hold monies in Lifestrategy Conservtive Growth Fund.
I glance it it a couple times a year.
It is simple and effective. :happy
Thank you. I think my question is whether site members feel comfortable with have very large portions of their portfolio in 1 or 2 accounts like Lifestyle Strategies.
Yes, I would feel comfortable using Vanguard LifeStrategy Moderate Growth (VSMGX) as a single fund all-in-one balanced portfolio.


HickoryHill wrote:
Tue Jul 10, 2018 8:02 am
Dottie57 wrote:
Mon Jul 09, 2018 9:46 pm
OP,

I’ve done well using index funds , low cost and very diversified. Total stock(US), Total bond and Total International. I have all of the categories of stock ( large growth, large value, small growth, small value) in the total indexes.

I once had a slice and dice portfolio that did not work that well for me. I didn’t know quite how to rebalance.
Thank you.
I was in that position, also, and the advisor did accomplish this goal - with very low-cost funds/ETFs; so, I am pleased with this.
I'm trying to figure out if I can save my 1% advisor fee and get the total diversification with a Lifestyle Strategy Vanguard fund and feel comfortable having the entire portfolio in 1 or 2 funds.
Yes save that that 1% annual fee. A Vanguard LifeStrategy Fund will give you good diversification using just one fund.

If you want a 60/40 asset allocation, then the fund to use is Vanguard LifeStrategy Moderate Growth (VSMGX).

I think that a 60/40 asset allocation is probably reasonable.


HickoryHill wrote:
Tue Jul 10, 2018 7:53 am
Pajamas wrote:
Mon Jul 09, 2018 9:24 pm
HickoryHill wrote:
Mon Jul 09, 2018 8:44 pm
I am so used to thinking about diversifying with several funds/ETFs (e.g. VSMGX) that I feel a bit uncomfortable with only 2,3 or 4 fundss/ETFs, even when each might be a fund of funds.
What exactly makes you feel uncomfortable? Maybe breaking it down will help.
Thanks for your thoughts. There is probably not a lot of logic to that discomfort, other than the simple notion that having more positions might reduce the effect of a downturn; I have come to understand how having more positions doesn't mean that one is more diversified.
A certain amount of protection from malfeasance within a given fund is probably part of the feeling.
Part of the reason there are around 20 funds/ETFs is that there are 4 different accounts, total, for my wife and I (Roth and IRA for wife and IRA/Taxable for me). [emphasis added]
As I think about it now, using VSMGX, or another Lifestyle Strategy mix might simplify the process of diversification - each account is funded with the same Fund, and each is diversified. The current situation is that the 4 accounts hold different positions that in total give the diversification.
You could use Vanguard LifeStrategy Moderate Growth (VSMGX) in all four accounts.

Or you could use a simple, very diversified, three-fund type portfolio. Please see the wiki page "Three-fund portfolio". This could give you better tax-efficiency.

Use only very tax-efficient stock index funds in your taxable account. Examples would be Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)ER 0.04%, and Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%.Those funds are also suitable for any type of account.

Bond funds are not very tax-efficient. Place the bond allocation in a tax-advantaged account, preferably a tax-deferred account.

Please see the wiki article article "Tax-efficient fund placement".

What is your age?

What funds do you currently have in your taxable account? Please give fund names, tickers and expense ratios.

Could you list the accounts you each have, what fund firm each is with, and the relative sizes of the accounts, such as:
your taxable account @ Vanguard, aa%
your traditional IRA @ xyz fund firm, bb%
wife's traditional IRA @ Fidelity, cc%
wife's Roth IRA @ xyz fund firm, dd%
Total =100%
Please include all accounts.

With that information I could give a more concrete illustration of how to do a three-fund type portfolio in a,tax-efficient manner.
Last edited by ruralavalon on Wed Jul 11, 2018 1:28 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
David Jay
Posts: 5469
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: [Considering the Vanguard LifeStrategy Fund]

Post by David Jay » Wed Jul 11, 2018 12:21 pm

HickoryHill wrote:
Wed Jul 11, 2018 9:39 am
The performance of the Puritan fund has been roughly 1% better than VSMGX over recent years, and I wonder why. Today I will begin to dig into the details.
According to M*, Puritan is nearly 67% stocks (versus 60% for VSMGX) with a smaller allocation to international. Those two factors could easily explain the difference.

If you want something closer to 70% stocks, you can hold 50% LS Growth and 50% LS Moderate for a 70/30 portfolio.

I use LS Growth for the "legacy" assets in our Roth accounts - We never expect to spend them, we expect they will pass to our kids.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Wed Jul 11, 2018 4:18 pm

David Jay wrote:
Wed Jul 11, 2018 12:21 pm
HickoryHill wrote:
Wed Jul 11, 2018 9:39 am
The performance of the Puritan fund has been roughly 1% better than VSMGX over recent years, and I wonder why. Today I will begin to dig into the details.
According to M*, Puritan is nearly 67% stocks (versus 60% for VSMGX) with a smaller allocation to international. Those two factors could easily explain the difference.

If you want something closer to 70% stocks, you can hold 50% LS Growth and 50% LS Moderate for a 70/30 portfolio.

I use LS Growth for the "legacy" assets in our Roth accounts - We never expect to spend them, we expect they will pass to our kids.
Thank you. Good ideas. YTD has been a slight loss for me, as with the broad diversification, the equities have been pretty flat and the fixed income declining a bit. Rising rates and volatility in equities. Another good reason to lose the advisor, as I'd be up slightly with VSMGX.

HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Wed Jul 11, 2018 4:20 pm

David Jay wrote:
Wed Jul 11, 2018 12:21 pm
HickoryHill wrote:
Wed Jul 11, 2018 9:39 am
The performance of the Puritan fund has been roughly 1% better than VSMGX over recent years, and I wonder why. Today I will begin to dig into the details.
According to M*, Puritan is nearly 67% stocks (versus 60% for VSMGX) with a smaller allocation to international. Those two factors could easily explain the difference.

If you want something closer to 70% stocks, you can hold 50% LS Growth and 50% LS Moderate for a 70/30 portfolio.

I use LS Growth for the "legacy" assets in our Roth accounts - We never expect to spend them, we expect they will pass to our kids.
That makes sense to use the Growth LS for long-term.

InvMoney
Posts: 14
Joined: Mon Jun 11, 2018 3:14 pm

Re: [Considering the Vanguard LifeStrategy Fund]

Post by InvMoney » Wed Jul 11, 2018 6:29 pm

Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Last edited by InvMoney on Wed Jul 11, 2018 7:54 pm, edited 3 times in total.

User avatar
englishgirl
Posts: 2473
Joined: Thu Mar 01, 2007 5:34 pm
Location: FL

Re: [Considering the Vanguard LifeStrategy Fund]

Post by englishgirl » Wed Jul 11, 2018 7:43 pm

There's nothing wrong with having your money in a single Lifestrategy fund that suits your desired asset allocation. There is no need to complicate things further.

I have my IRAs 100% in Lifestrategy Moderate Growth. I am seriously considering rolling my old 401k into Lifestrategy Moderate Growth shortly too. I have come to this decision after trying to be more complicated and "sophisticated" in my earlier years of investing. Actually, simplicity can be very sophisticated.
Sarah

User avatar
Munir
Posts: 2445
Joined: Mon Feb 26, 2007 4:39 pm
Location: Oregon

Re: [Considering the Vanguard LifeStrategy Fund]

Post by Munir » Thu Jul 12, 2018 1:47 am

InvMoney wrote:
Wed Jul 11, 2018 6:29 pm
Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Wow! Any comments?

User avatar
ruralavalon
Posts: 13745
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: [Considering the Vanguard LifeStrategy Fund]

Post by ruralavalon » Thu Jul 12, 2018 10:00 am

Munir wrote:
Thu Jul 12, 2018 1:47 am
InvMoney wrote:
Wed Jul 11, 2018 6:29 pm
Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Wow! Any comments?
The much smaller exposure to international stocks is probably the major part of the explanation. LifeStrategy = 40% of stocks in international stocks. Wellesley and Wellington = 20% of stocks in international stocks.

Although Vanguard is justly famous for its great index funds, Vanguard also offers some of the world's best actively managed funds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
David Jay
Posts: 5469
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: [Considering the Vanguard LifeStrategy Fund]

Post by David Jay » Thu Jul 12, 2018 10:16 am

Munir wrote:
Thu Jul 12, 2018 1:47 am
InvMoney wrote:
Wed Jul 11, 2018 6:29 pm
Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Wow! Any comments?
Apples and Oranges. Many roads to Dublin, and all that.

As said by others, LS has significant international exposure. A big drop in US market that is not reflected in Europe could favor LS hondings. The future is unknown.

For me it is primarily a choice between owning the market or trusting the stock-pickers. Narrow holdings in "W" funds could encounter unsystemic risks.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Thu Jul 12, 2018 7:06 pm

InvMoney wrote:
Wed Jul 11, 2018 6:29 pm
Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Very interesting. Thanks a lot.

HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Thu Jul 12, 2018 7:16 pm

David Jay wrote:
Thu Jul 12, 2018 10:16 am
Munir wrote:
Thu Jul 12, 2018 1:47 am
InvMoney wrote:
Wed Jul 11, 2018 6:29 pm
Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Wow! Any comments?
Apples and Oranges. Many roads to Dublin, and all that.

As said by others, LS has significant international exposure. A big drop in US market that is not reflected in Europe could favor LS hondings. The future is unknown.

For me it is primarily a choice between owning the market or trusting the stock-pickers. Narrow holdings in "W" funds could encounter unsystemic risks.
Agreed. My prediction of the future is pretty poor. I will want to do more reading in the Boglehead library. I suspect that I'll find that the Bogle approach includes at least some foreign/international equities and fixed income. Does the influence of the many international companies based in the US and elsewhere mitigates (?%) reduced foreign exposure? Something to think about.

User avatar
ruralavalon
Posts: 13745
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: [Considering the Vanguard LifeStrategy Fund]

Post by ruralavalon » Thu Jul 12, 2018 7:41 pm

HickoryHill wrote:
Thu Jul 12, 2018 7:16 pm
David Jay wrote:
Thu Jul 12, 2018 10:16 am
Munir wrote:
Thu Jul 12, 2018 1:47 am
InvMoney wrote:
Wed Jul 11, 2018 6:29 pm
Wellesley Income and Wellington are viable alternatives to comparable Life Strategy funds. As the following data indicates, Wellesley Income and Wellington have had superior performance.


Accumulative Percent Performance For 10 Year Period Ending June 30, 2018

VWINX - Wellesley Income (37% stocks / 63% bonds) - Total return of +103.7%.

VSCGX - Life Strategy Conservative Growth (40% stocks / 60% bonds) - Total return of +67.7%.

VWELX - Wellington (65% stocks / 35% bonds) - Total return of +115.8%.

VSMGX - Life Strategy Moderate Growth (60% stocks / 40% bonds) - Total return of +83.5%.


Value As Of June 1, 2018 of $100,000 Invested On January 2, 2000 (19.5 Year Period)

VWINX - Wellesley Income - $363,989

VSCGX - Life Strategy Conservative Growth - $241,330

VWELX - Wellington - $389,777

VSMGX - Life Strategy Moderate Growth - $250,618


Wellesley Income and Wellington have less international exposure than the Life Strategy funds do. Perhaps that's a good thing.
Wow! Any comments?
Apples and Oranges. Many roads to Dublin, and all that.

As said by others, LS has significant international exposure. A big drop in US market that is not reflected in Europe could favor LS hondings. The future is unknown.

For me it is primarily a choice between owning the market or trusting the stock-pickers. Narrow holdings in "W" funds could encounter unsystemic risks.
Agreed. My prediction of the future is pretty poor. I will want to do more reading in the Boglehead library. I suspect that I'll find that the Bogle approach includes at least some foreign/international equities and fixed income. Does the influence of the many international companies based in the US and elsewhere mitigates (?%) reduced foreign exposure? Something to think about.
You will find a broad range of Boglehead opinion, running all the way from 00% international stocks to 50% of stocks in international stocks. In other words the range is from "not necessary" to "global market weight".

Try the Google search box to look for forum discussions on international stock allocation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

InvMoney
Posts: 14
Joined: Mon Jun 11, 2018 3:14 pm

Re: [Considering the Vanguard LifeStrategy Fund]

Post by InvMoney » Fri Jul 13, 2018 11:19 am

Regarding international exposure, Wellesley Income and Wellington have about 6% and 11%, respectively, invested in international stocks. Investing in international stocks and bonds involves currency exchange rate risk and political risk as well as securities performance risk. An argument can be made that the significantly higher exposure to international stocks and bonds entailed in Vanguard's Life Strategy and Target Retirement funds renders such funds considerably more risky than Wellesley Income and Wellington.

Regarding the managed funds versus index funds debate, index funds are hard to beat in bull markets such as the one that we've been in since 2009, but can be, and have been, significantly beaten by well managed funds such as Wellesley Income and Wellington during bear markets.

I believe that we're currently in a stock investing environment similar to that of the 1990's. That's why in my prior post I used the 2000 to date period, a period that includes two bear markets, to back test fund performance. Wellesley Income and Wellington have the same investing methodology today that they had in 2000. I believe that they will continue to outperform index fund alternatives on a long-term basis.

HickoryHill
Posts: 27
Joined: Fri Jul 06, 2018 7:52 am

Re: [Considering the Vanguard LifeStrategy Fund]

Post by HickoryHill » Fri Jul 13, 2018 1:09 pm

InvMoney wrote:
Fri Jul 13, 2018 11:19 am
Regarding international exposure, Wellesley Income and Wellington have about 6% and 11%, respectively, invested in international stocks. Investing in international stocks and bonds involves currency exchange rate risk and political risk as well as securities performance risk. An argument can be made that the significantly higher exposure to international stocks and bonds entailed in Vanguard's Life Strategy and Target Retirement funds renders such funds considerably more risky than Wellesley Income and Wellington.

Regarding the managed funds versus index funds debate, index funds are hard to beat in bull markets such as the one that we've been in since 2009, but can be, and have been, significantly beaten by well managed funds such as Wellesley Income and Wellington during bear markets.

I believe that we're currently in a stock investing environment similar to that of the 1990's. That's why in my prior post I used the 2000 to date period, a period that includes two bear markets, to back test fund performance. Wellesley Income and Wellington have the same investing methodology today that they had in 2000. I believe that they will continue to outperform index fund alternatives on a long-term basis.
Thanks. More info to consider. I had not looked at the Wellesley or Wellington before.

Post Reply