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dale2010

Revisiting Bond Option

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I am just revisiting my investment options before I actually contribute, and I wanted to clarify some opinions about the Wellesley Income Fund. It is my understanding that this fund is already diversified to the point where it has 60% bonds and roughly 35% stocks. My other funds that I am contributing too include, Vanguard Total Stock Market Index(50%) and Vanguard Total International Stock Index (30%). I would like your opinion on if it is a better idea to go into the Vanguard Total Bond Market instead of the Wellesley since the Wellesley may be too much stock compared to bonds? Again, I'm age 30, and want to stay smart and aggressive. Thank you. Is anyone familiar with these bonds that could give me their opinions about using the Wellesley as my bond proxi compared to the VTBM.

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Dale

 

THE FUND YOU MENTION IS A DECENT FUND. ITS A CONSERVATIVE MIX BUT ITS WORTH KEEPING FOR DOWNSIDE PROTECTION. HAVING SAID THAT, YOU COULD DO WHAT YOU SAID TOO, STICKING WITH TOTAL MARKET, TOTAL INTERNATIONAL AND TOTAL BOND. 30% BONDS IS ABOUT RIGHT AT YOUR AGE.

 

IF IT WERE ME I WOULD DO THE 3 INDEX FUNDS. ITS EASY TO GET IN THE FUND COLLECTION BUSINESS IF YOU ARE NOT CAREFUL.

 

EITHER WAY YOU ARE ON THE RIGHT TRACK.

 

TONY

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Sorry about the all caps. I had caps lock on and didn't notice. I own total bond market index and Its a great choice and its up about 8% . It really is the only bond fund you really need. My personal suggestion is to put the money 50/50 in TIPS Fund and Total Bond Fund.

 

Tony

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Wellesley is a fine fund; however, if you believe in the concept of establishing a certain mix of stocks, bonds and cash, this fund complicates matters because it has both stocks and bonds, as you have mentioned.

 

A simpler solution would be:

 

Vanguard Total US Stock

Vanguard Total Bond

Vanguard Total International Stock

 

But heck, I feel like saying "What do I know?" when I look at investment returns of the past ten years. So the above allocation is sort of a standard response for low-cost indexers like me. I'm at the point where I have absolutely no confidence in what I'm doing. I'm doing all of the "right" things such as diversifying across different asset classes, using no load index funds, dollar-cost averaging, maximizing 403b contributions, but where the heck has it gotten me the last ten years?

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