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Wellington and Wellesley

Upon another review of my holdings, I realize I'm holding almost equal positions in VWENX and VWIAX (just a bit overweight VWENX). I'm wondering if it makes sense to hold both of these? Is this merely giving me a 50/50 asset mix or should I get off the fence and pick either a bias toward stocks or bias toward bonds.


These are both in tax sheltered accounts and combined represent about 18% of my IRA- 9% of my PV.


Any thoughts would be appreciated. Thank you.

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Re: Wellington and Wellesley

I use VWINX & VEIPX combo to adjust AA. W&W just produces 50-50 AA.

YBB
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Re: Wellington and Wellesley


Hilo99 wrote:

Upon another review of my holdings, I realize I'm holding almost equal positions in VWENX and VWIAX (just a bit overweight VWENX). I'm wondering if it makes sense to hold both of these? Is this merely giving me a 50/50 asset mix or should I get off the fence and pick either a bias toward stocks or bias toward bonds.


These are both in tax sheltered accounts and combined represent about 18% of my IRA- 9% of my PV.


Any thoughts would be appreciated. Thank you.

You have a choice of 37/63, 50/50, or 66/34 and everything in between by varying to amount of Wellesley or Wellington you own away from 50/50.  To it is really just a choice of which AA you want.  Also, Wellington's equity is not just a mirror or Wellesley's sharing only about half of the top ten in each group.

Since it is only 9% of your portfolio and we have no idea what the rest of your portfolio is or what you overall AA is or your time horizon or risk tolerance, I suggest you either keep both of pick one, because, frankly it will make virtually no difference in your returns at these levels. 

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Re: Wellington and Wellesley

Both are great funds.  Wellington is a 5-star Gold fund.  Currently Wellesley is a 4-star Gold fund.   I've held both for over 30 years.  They are not the same. I have seen them as low as 3-stars (a long time ago) but both have good management and bounce back.  Wellington with its greater proportion of stocks has better returns but is more volitale.

Since we cannot see the future we tend to judge funds by historical performance.  Wellington is one of the oldest funds and has a long track record.  It was started in in 1929 just before the Great Depression.  Since 1950 it might lose money one year but make it back the next.  It lost money in both 1973 and 1974 during the oil crisis but had more than made it back in 1975 and 1976.  2008 (-22.3%) was its worst loss since 1931 (-26.4%).  That was the year my portfolio lost over 40%.  It almost made all of it back in 2009 (+22.2%).  Last year's 3.4% loss was the first since then and it has already made that back.

Wellesley is a much newer fund. It was started in 1970.  It is less risky meaning that its losses are much smaller, but so are its returns.  It lost a little in both 1973 and 1974 but more than made it back in 1975. Every loss since then was a single year immediately followed by a year of profit that was much more than the loss. Its loss in 2008 really showed its strength.  It only lost 9.8%.  In 2009 it made 16.0%.

We didn't have much when our kids were born but we wanted them to go to college.  This was before the new college savings plans. The day after they were born we put $100 in a savings account in their name.  We added $25 per month.  When it grew big enough we bought CDs.  When they grew big enough we invested in Wellesley.  With every pay raise we contributed a little more.  My daughter graduated college debt free.  My son didn't graduate but the balanced was used to get him the equipment he needed for his trade (refridgeration).

Wanting to be very safe with their investments I picked the wrong fund.  It was an 18-year investment.  For something that long I should have picked Wellington.

Research has shown that the safest asset allocation is 50/50 (50% stock/50% bonds) but a 75/25 allocation is almost as safe with better returns.  For my retirement years I have picked two conservative- allocation funds for my core investments.  Vanguard Wellington is one of them.  Its asset allocation falls between the two and it has an outstanding track record.  But I have a pension that goes along with my investments.  If I didn't I would have gone more conservative with an equal amount in Wellesley.


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Re: Re: Wellington and Wellesley

Just to point out, because it is so often overlooked, past data shows what something has BEEN, not what that something IS or WILL BE going forward.  It's not a fact that this or that allocation is "safer", "better", etc.; only that this may have been the case in the PAST.  YOU have to decide how much confidence you have in past results.  Raw data is often open to interpretation, and people often see different things in the same data; that's what makes a market!

I know everyone knows this, but I continually see posts which suggest otherwise!

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Re: Re: Re: Wellington and Wellesley

 My point is that it’s all about odds. Past history indicates what HAS happened, but also something about the likelihood of that continuing. Nothing in the past guarantees a specific outcome. There’s always some doubt involved.  So a positive background may make it more likely that there will be a positive future. It certainly doesn’t mean there WILL be a positive future!

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Re: Wellington and Wellesley


Mustang:


Research has shown that the safest asset allocation is 50/50 (50% stock/50% bonds) but a 75/25 allocation is almost as safe with better returns.  For my retirement years I have picked two conservative- allocation funds for my core investments.  Vanguard Wellington is one of them.  Its asset allocation falls between the two and it has an outstanding track record.  But I have a pension that goes along with my investments.  If I didn't I would have gone more conservative with an equal amount in Wellesley.


This
is a real test(link) from 2008-2009 of 50/50 vs 75/25.  Max Draw
of  23.8 vs 36.4...that's 12.6% difference.



What you want to achieve in
retirement is a return you want/need with the least risk.  This link shows why VWINX was the best choice by far
because it got close performance with much better risk attributes.  BTW, PRWCX did better than all of them.

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Re: Wellington and Wellesley


FD1000 wrote:


Mustang:


Research has shown that the safest asset allocation is 50/50 (50% stock/50% bonds) but a 75/25 allocation is almost as safe with better returns.  For my retirement years I have picked two conservative- allocation funds for my core investments.  Vanguard Wellington is one of them.  Its asset allocation falls between the two and it has an outstanding track record.  But I have a pension that goes along with my investments.  If I didn't I would have gone more conservative with an equal amount in Wellesley.


This
is a real test(link) from 2008-2009 of 50/50 vs 75/25.  Max Draw
of  23.8 vs 36.4...that's 12.6% difference.



What you want to achieve in
retirement is a return you want/need with the least risk.  This link shows why VWINX was the best choice by far
because it got close performance with much better risk attributes.  BTW, PRWCX did better than all of them.

I wasn't looking at a particular software application but the Bengen and Trinity studies.  They covered multiple 30-year periods going back as far as 1929.

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Re: Wellington and Wellesley


Hilo99 wrote:

Upon another review of my holdings, I realize I'm holding almost equal positions in VWENX and VWIAX (just a bit overweight VWENX). I'm wondering if it makes sense to hold both of these? Is this merely giving me a 50/50 asset mix or should I get off the fence and pick either a bias toward stocks or bias toward bonds.


These are both in tax sheltered accounts and combined represent about 18% of my IRA- 9% of my PV.


Any thoughts would be appreciated. Thank you.

I’m approaching retirement w/in the next 1-2 years, and am planning on using Wellington (VWENX) as the core domestic holding in my ROTH account. Great long term returns, tends to buy wide moat dividend growers, and should do well over the long run.

Wellesley, I’m not so crazy about. I actually have been building up a position in Vanguard Balanced (VBINX) in my wife’s ROTH, with it’s ~60:40 stock to bond mix, feel it might outperform Wellesley long term. But, it may be a touch more volatile. 

Win

Win
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Re: Wellington and Wellesley

Racqueteer wrote:

Just to point out, because it is so often overlooked, past data shows what something has BEEN, not what that something IS or WILL BE going forward.  It's not a fact that this or that allocation is "safer", "better", etc.; only that this may have been the case in the PAST.  YOU have to decide how much confidence you have in past results.  Raw data is often open to interpretation, and people often see different things in the same data; that's what makes a market!

I know everyone knows this, but I continually see posts which suggest otherwise!

If you believe in the above then there is no need to analyze anything and/or look at the past and/or try to guess the future and/or look at different funds...after all, "Raw data is often open to interpretation, and people often see different things in the same data; that's what makes a market!".

I believe we should look at the past and try to make assumptions about the future + select funds with great risk/reward + make changes at crucial points. 

Accumulation phase: We should be honest with ourselves based on real data.  It could be as easy as having 3 different accounts, one with only indexes and no change, one with managed funds and no change and one with what we usually do and see after several years if the third option was the best.

Retirement: this is completely a different phase for most investors.  Most want their portfolio to sustain their standard of living for decades to come, their first priority is usually not to make more money.  If you ask most of them, do you want your portfolio to make 10-15% more with 50% more volatility? if they saved enough the answer should be no, especially when they start their retirement.

and now it's even clearer, after 10 years of great stock performance, can you expect the next 5-10 years to be the same?


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Re: Wellington and Wellesley


Mustang wrote:

Both are great funds.  Wellington is a 5-star Gold fund.  Currently Wellesley is a 4-star Gold fund.   I've held both for over 30 years. 


Since we cannot see the future we tend to judge funds by historical performance.  Wellington is one of the oldest funds and has a long track record.  It was started in in 1929 just before the Great Depression.  Since 1950 it might lose money one year but make it back the next.  It lost money in both 1973 and 1974 during the oil crisis but had more than made it back in 1975 and 1976.  2008 (-22.3%) was its worst loss since 1931 (-26.4%).  That was the year my portfolio lost over 40%.  It almost made all of it back in 2009 (+22.2%).  Last year's 3.4% loss was the first since then and it has already made that back.



-----------------------------------------------

Whew... I (spouse) have owned Wellington since 1953.  That's not a typo...1953.

Glad I never sold any!!

R48


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Re: Wellington and Wellesley


Racqueteer wrote:

 My point is that it’s all about odds. Past history indicates what HAS happened, but also something about the likelihood of that continuing. Nothing in the past guarantees a specific outcome. There’s always some doubt involved.  So a positive background may make it more likely that there will be a positive future. It certainly doesn’t mean there WILL be a positive future!

I agree BUT what do think we should do?   That's like saying that if you drive a small car and be in an accident chance you will get more damage to you and your car than driving a big car.  You may never be in an accident but you definitely can buy a bigger car.

If I'm retired today and based on what you know right now and I need 6% annually in the next 10 years and let's assume VWINX will make 6% and VWELX 7% (based on past performance).  Should I own VWINX or VWELX?  that was a direct question, no more generic comments  :-)

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Re: Wellington and Wellesley

FD1000 wrote:

If I'm retired today and based on what you know right now and I need 6% annually in the next 10 years and let's assume VWINX will make 6% and VWELX 7% (based on past performance).  Should I own VWINX or VWELX?  that was a direct question, no more generic comments  :-)

In my option, it is a bad idea to depend on a future return based on past returns. It is a not so bad idea to depend on past relative performance.

With VWINX and VWELX there have been a few end-of-year starting dates for which VWINX has supported higher inflation-adjusted withdrawals, to the end of 2018, than VWELX: 1970, 1971, 1972, 1999, and 2007.

Those are starting years for which the supported initial withdrawal rate has been relatively low. The end of 1999 or 2007 are likely recognizable as startng dates that were just before the funds had poor returns.

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Re: Wellington and Wellesley

FD1000 wrote:

Racqueteer:

 My point is that it’s all about odds. Past history indicates what HAS happened, but also something about the likelihood of that continuing. Nothing in the past guarantees a specific outcome. There’s always some doubt involved.  So a positive background may make it more likely that there will be a positive future. It certainly doesn’t mean there WILL be a positive future!

I agree BUT what do think we should do?

Not the point though, FD.  It's a question of the wording, not whether or not I agree.  All I'm doing is pointing out that there is a difference between saying, "This has been the case over the last 20 years, so that PROBABLY indicates that I should do such and such" versus "I should do such and such because it's PROVEN that...."  The two statements aren't equivilent to one another. 

Btw, I didn't say that my comments were focussed on anyone in particular - LOTS of folks here are guilty of this at one time or another.  I suspect I've slipped a time or two myself, but I try not to make that logical mistake.  It's right up there with the assumption of causation from correlation.  And then, for something truly esoteric, there's always Zeno's Paradox... 8^b

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Re: Wellington and Wellesley


win1177 wrote:


Hilo99:

Upon another review of my holdings, I realize I'm holding almost equal positions in VWENX and VWIAX (just a bit overweight VWENX). I'm wondering if it makes sense to hold both of these? Is this merely giving me a 50/50 asset mix or should I get off the fence and pick either a bias toward stocks or bias toward bonds.


These are both in tax sheltered accounts and combined represent about 18% of my IRA- 9% of my PV.


Any thoughts would be appreciated. Thank you.

I’m approaching retirement w/in the next 1-2 years, and am planning on using Wellington (VWENX) as the core domestic holding in my ROTH account. Great long term returns, tends to buy wide moat dividend growers, and should do well over the long run.

Wellesley, I’m not so crazy about. I actually have been building up a position in Vanguard Balanced (VBINX) in my wife’s ROTH, with it’s ~60:40 stock to bond mix, feel it might outperform Wellesley long term. But, it may be a touch more volatile. 

Win

Win,

 Since 1985, VBINX and VWINX have virtually, while Wellesley has  the same CAGR, while Wellesley has 62% less equities, better SD, Sharpe, Sotino, and max drawdown.

So VBINX should outperform Wellesley, but doesn't seem to by much.

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Re: Wellington and Wellesley

Racqueteer:

FD1000:

Racqueteer:

 My point is that it’s all about odds. Past history indicates what HAS happened, but also something about the likelihood of that continuing. Nothing in the past guarantees a specific outcome. There’s always some doubt involved.  So a positive background may make it more likely that there will be a positive future. It certainly doesn’t mean there WILL be a positive future!

I agree BUT what do think we should do?

Not the point though, FD.  It's a question of the wording, not whether or not I agree.  All I'm doing is pointing out that there is a difference between saying, "This has been the case over the last 20 years, so that PROBABLY indicates that I should do such and such" versus "I should do such and such because it's PROVEN that...."  The two statements aren't equivilent to one another. 

Btw, I didn't say that my comments were focussed on anyone in particular - LOTS of folks here are guilty of this at one time or another.  I suspect I've slipped a time or two myself, but I try not to make that logical mistake.  It's right up there with the assumption of causation from correlation.  And then, for something truly esoteric, there's always Zeno's Paradox... 8^b

I think FD is trying to figure out what you are actually saying that is actionable, Racq.  Me too.

Past performance is no guarantee of future performance?

Yet virtually everyone uses past performance in some form to make decisions.  However, those decisions become more complicated the more complicated your funds and portfolio becomes.

There is little chance in my mind that the 37/63 Wellesley fund will not perform fairly well in line with its asset allocation.  To me, that means a range of about 4-7%, likely around 5.5 in the foreseeable future.  This will change based on how deep the next recession is.

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Re: Re: Wellington and Wellesley

Sigh...  Ok, it's clear that I'm not getting my point across, so I'll let it drop.  Maybe it's just nitpicking, when all is said and done.  It isn't really actionable, so maybe the whole exercise was pointless from the start.  Back to lurking...  ;-)

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Re: Wellington and Wellesley

Now that interest rates have stabilized, I have started buinding position in VWINX.

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Re: Wellington and Wellesley


Mustang:

Both are great funds.  Wellington is a 5-star Gold fund.  Currently Wellesley is a 4-star Gold fund.   I've held both for over 30 years.  They are not the same. I have seen them as low as 3-stars (a long time ago) but both have good management and bounce back.  Wellington with its greater proportion of stocks has better returns but is more volitale.

Since we cannot see the future we tend to judge funds by historical performance.  Wellington is one of the oldest funds

Wellesley is a much newer fund. It was started in 1970. 

Wanting to be very safe with their investments  For my retirement years I have picked two conservative- allocation funds for my core investments.  Vanguard Wellington is one of them.  ....



http://discuss.morningstar.com/NewSocialize/forums/p/388645/3997477.aspx#3997477ery interesting little history on these funds, thank you.

I will add, I held three funds in Vanguard, VWELX, VFINX, and VPMCX, later, in adrmal shares, and each had 50,000 by the late 80s. Then I began to purchase mainly individual stocks.

I did not bother much with them until I retired at age 68 and then paid out my RMDs with the funds. Now the Wellington fund did almost as well as the S&P 500, but the Primecap fund made more than both funds put together, it best the S&P 500 by more than double! Say what you will about passive investing, I know it has its place, but I will choose good managed active funds anyday for long horison savings. I do not need to care at all about past performance being unlike present performace because I live on past performance and my investent perfornance is mainly in the past now.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1990&firstMonth=1&...

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""""""""

All my risky money will be in invested in wi when I retire.

I'll just add to the SD picture bp painted, based on quality bonds and slow growth dividend stocks.

These bonds and stocks are relatively solid, you have to make sure such investments turn the trick for you.

Kiss.

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