Losses with Total Bond market index fund, suggestions on next steps

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trybogle
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Losses with Total Bond market index fund, suggestions on next steps

Post by trybogle »

Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:

I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

I dont have a finance background. Any suggestions would be really appreciated.
I am open to moving this to a target date fund, or Vanguard Mega Cap growth ETF which has done really well for me.

Thanks
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bertilak
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by bertilak »

trybogle wrote: Sun Jun 04, 2023 12:32 pm Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:

I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

I dont have a finance background. Any suggestions would be really appreciated.
I am open to moving this to a target date fund, or Vanguard Mega Cap growth ETF which has done really well for me.

Thanks
I don't think you should go performance chasing. You should be looking at your overall asset allocation (AA). If you've had a big loss in bonds then perhaps you need to buy some more to push your AA back to where it should be.

BUT, this is a chance to do some Tax Loss Harvesting (TLH) you can use the lose to:
  1. offset any realized gains you have, or expect to have, or
  2. buy bonds you are more comfortable with. For example, I used this opportunity to switch to short term TIPS.
  3. adjust your AA if you want to.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Living Free
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Living Free »

I would propose that if you sell this fund now and then use the proceeds to purchase the vanguard mega cap growth fund (which you report has done well recently), then you'll be selling low and buying high.
dbr
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by dbr »

Bonds go up and down. Stocks go up and down even more. If your ups and downs in bonds were uncomfortable you should be scared to death to be in stocks. Buying anything based on recent good performance can easily be a big mistake. While it is true that mega caps have soared in the recent few years, within the last 20 years that growth fund has had drawdowns of 50% and nearly 30%, as have other stock funds. This is not a magic bullet. A target date fund is just owning stocks and bonds in one fund, most often that very total bond index fund at some allocation. But, if you like risk you can certainly make choices such as all stocks out to all mega stocks. You pay your money and you take your choice.

You can avoid the ups and downs of a bond fund by going to shorter duration or to zero duration, meaning cash, CDs, some kinds of annuities, in nominal dollars or to I bonds in real dollars, not that doing so necessarily produces a better portfolio outcome over time.

In fact a reasonable portfolio allocation to stocks and bonds held for the long term is fine and ups and downs come with the territory. If you are not investing for the long term, that is a different question. Long term means, for example, the 60 years between earning serious money at age 30 to dying at age 90, or whatever range applies around that -- 20-80 years perhaps at the shortest and longest extremes of long term.
Last edited by dbr on Sun Jun 04, 2023 12:55 pm, edited 1 time in total.
Marseille07
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Marseille07 »

trybogle wrote: Sun Jun 04, 2023 12:32 pm Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:

I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

I dont have a finance background. Any suggestions would be really appreciated.
I am open to moving this to a target date fund, or Vanguard Mega Cap growth ETF which has done really well for me.

Thanks
I mean...if you *really* don't need this allocation for any purpose, then you should get rid of it and invest in something else.

But you should review how you ended up holding an unnecessary allocation to begin with.
livesoft
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by livesoft »

@trybogle, what other funds that you own have lost money? Surely, there must be some I would think. What are you going to do about them?
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the_wiki
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by the_wiki »

trybogle wrote: Sun Jun 04, 2023 12:32 pm Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:

I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

I dont have a finance background. Any suggestions would be really appreciated.
I am open to moving this to a target date fund, or Vanguard Mega Cap growth ETF which has done really well for me.

Thanks
So what you are saying is that you want to sell low after buying high? :confused
Mr. Buzzkill
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Mr. Buzzkill »

If you are “aligned with the 3-fund approach” then the most you should do is rebalance your holdings to an allocation policy if you have one.

If not, are you regretting not having moved before the fund value dropped and actually market timing?

Or not comfortable with the risk associated with your policy allocation?

Unless you have a bucket approach or other special requirements, all liquid assets including the funds in question are part of your overall portfolio and should probably be managed as such.
A strategy that works only in bull markets isn’t much of a strategy. Anyway, four dollars a pound.
Topic Author
trybogle
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by trybogle »

I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
I am not looking to cash out anytime soon (early 40s).

Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.

I haven't done a good job with this.
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Kenkat
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Kenkat »

Unless you have held Total Bond Market Index for less than 5 years, you are not “down” at all. Bonds pay income. Over the long run, that is all that will matter. Total Bond Index is paying more income now than it did over the past few years. That will help you over the long run. In your early 40s, what has happened over the past 5 years is unimportant. You have another 40 or 50 year of investing potentially.

It would be helpful at this stage of life to determine exactly how much you want in equities and how much you want in bonds.
the_wiki
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by the_wiki »

trybogle wrote: Sun Jun 04, 2023 1:13 pm I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
I am not looking to cash out anytime soon (early 40s).

Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.

I haven't done a good job with this.
Is this in a 401k or IRA?
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ruralavalon
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by ruralavalon »

trybogle wrote: Sun Jun 04, 2023 12:32 pm Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:

I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

I dont have a finance background. Any suggestions would be really appreciated.
I am open to moving this to a target date fund, or Vanguard Mega Cap growth ETF which has done really well for me.

Thanks
You said "I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) ." What do you mean when you say "dormant funds"? What is the purpose of this investment? Is this in an IRA? Is this in your 401k account?

What other accounts do you have?

Using a target date fund is a good choice for a novice investor.

But it's important to know is the overall picture. What accounts do you have and what investments do you have in each account? What funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios. Do you have debt? If so what types, amounts and interest rates?

Please see Asking Portfolio Questions for information needed and format.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
trybogle
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by trybogle »

the_wiki wrote: Sun Jun 04, 2023 1:22 pm
trybogle wrote: Sun Jun 04, 2023 1:13 pm I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
I am not looking to cash out anytime soon (early 40s).

Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.

I haven't done a good job with this.
Is this in a 401k or IRA?
This is my savings account, 401K is with Fidelity. I realize I need to take a step back and relook at all accounts.
Topic Author
trybogle
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by trybogle »

ruralavalon wrote: Sun Jun 04, 2023 1:25 pm
trybogle wrote: Sun Jun 04, 2023 12:32 pm Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:

I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

I dont have a finance background. Any suggestions would be really appreciated.
I am open to moving this to a target date fund, or Vanguard Mega Cap growth ETF which has done really well for me.

Thanks
You said "I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) ." What do you mean when you say "dormant funds"? What is the purpose of this investment? Is this in an IRA? Is this in your 401k account?

What other accounts do you have?

Using a target date fund is a good choice for a novice investor.

But it's important to know is the overall picture. What accounts do you have and what investments do you have in each account? What funds are offered in your employer's 401k plan? Please give fund names, tickers and expense ratios. Do you have debt? If so what types, amounts and interest rates?

Please see Asking Portfolio Questions for information needed and format.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
yes, thanks, will do, i need to have a comprehensive view.
By Dormant, i meant I am not actively investing in VBTLX.
toddthebod
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by toddthebod »

I'm reminded of my favorite comment of all time on this forum:
JSPECO9 wrote: Wed Nov 09, 2022 10:14 pm No matter how hard I try I can't understand how people were willing to buy bonds at 0.5% but don't want to buy at 4.5%. Are people really this bad at investing?
mptfan
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by mptfan »

trybogle wrote: Sun Jun 04, 2023 1:13 pm I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
Not sure what you mean by "okay," but it's your money, so it's okay to do what you want with it.
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Wiggums
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Wiggums »

We continue to invest in the three fund portfolio. Yes, we are even buying bonds. We also did a little Tax Loss Harvesting (TLH). Overtime, the bond funds will be fine. It’s unfortunate that bonds dropped so much, but we know the cause. Stay the course.
"I started with nothing and I still have most of it left."
Marseille07
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Marseille07 »

trybogle wrote: Sun Jun 04, 2023 1:13 pm I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
I am not looking to cash out anytime soon (early 40s).

Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.

I haven't done a good job with this.
It is not OK to leave it as is when you say you don't need the allocation for any purpose and you now realize you've overlooked it. Take action soon.
Topic Author
trybogle
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by trybogle »

toddthebod wrote: Sun Jun 04, 2023 1:35 pm I'm reminded of my favorite comment of all time on this forum:
JSPECO9 wrote: Wed Nov 09, 2022 10:14 pm No matter how hard I try I can't understand how people were willing to buy bonds at 0.5% but don't want to buy at 4.5%. Are people really this bad at investing?
I have been doing a ladder approach with buying notes/bills, but have been recently leveraging the vanguard cash fund that is paying 4.5%.

I know my original question lacks details to give any reasonable guidance :(
I need to take a finance 101 class that is bogle aligned.
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goodenyou
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by goodenyou »

trybogle wrote: Sun Jun 04, 2023 1:45 pm
toddthebod wrote: Sun Jun 04, 2023 1:35 pm I'm reminded of my favorite comment of all time on this forum:
JSPECO9 wrote: Wed Nov 09, 2022 10:14 pm No matter how hard I try I can't understand how people were willing to buy bonds at 0.5% but don't want to buy at 4.5%. Are people really this bad at investing?
I have been doing a ladder approach with buying notes/bills, but have been recently leveraging the vanguard cash fund that is paying 4.5%.

I know my original question lacks details to give any reasonable guidance :(
I need to take a finance 101 class that is bogle aligned.
You're in Finance 101. It's called Bogleheads.com. If you "don't need the money right now", let the losses be your friend and continue to buy more at a discount. The rebound in your investment, when it happens, will reward you handsomely.

"Staying the Course" is not repeated here for nothing. It is an admonishment that prevents you from making the error of buying high and selling low. Investing takes patience and time. It's not easy.
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by cacophony »

Marseille07 wrote: Sun Jun 04, 2023 1:45 pm
trybogle wrote: Sun Jun 04, 2023 1:13 pm I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
I am not looking to cash out anytime soon (early 40s).

Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.

I haven't done a good job with this.
It is not OK to leave it as is when you say you don't need the allocation for any purpose and you now realize you've overlooked it. Take action soon.
You're only allowed a bond allocation if you have a specific purpose for it? Just because the OP hasn't fully thought through the approach doesn't mean they need to take action soon, especially with the fixed income portion of their portfolio.
Marseille07
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Marseille07 »

cacophony wrote: Sun Jun 04, 2023 2:08 pm You're only allowed a bond allocation if you have a specific purpose for it? Just because the OP hasn't fully thought through the approach doesn't mean they need to take action soon, especially with the fixed income portion of their portfolio.
I didn't say you're not allowed. What I'm saying is each allocation should be purposeful. Under no circumstances should you be saying "this 10% X allocation here doesn't have any purpose."
JDave
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by JDave »

Rebalance.
The End
cacophony
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by cacophony »

Marseille07 wrote: Sun Jun 04, 2023 2:11 pm
cacophony wrote: Sun Jun 04, 2023 2:08 pm You're only allowed a bond allocation if you have a specific purpose for it? Just because the OP hasn't fully thought through the approach doesn't mean they need to take action soon, especially with the fixed income portion of their portfolio.
I didn't say you're not allowed. What I'm saying is each allocation should be purposeful. Under no circumstances should you be saying "this 10% X allocation here doesn't have any purpose."
There's clearly a needed purpose of reducing market movement here, and that should be enough of a purpose.
Marseille07
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Marseille07 »

cacophony wrote: Sun Jun 04, 2023 2:18 pm There's clearly a needed purpose of reducing market movement here, and that should be enough of a purpose.
That is a valid purpose, not opposing that at all. The OP said total bond doesn't have any purpose, which is what I pointed out as an issue.
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Beensabu
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Beensabu »

trybogle wrote: Sun Jun 04, 2023 12:32 pm I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX?
Yes.
trybogle wrote: Sun Jun 04, 2023 1:13 pm Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.
The overall stock:bond AA of the above is 50:50.

Your target date fund (VTTVX) is a fund-of-funds with a 55:45 stock:bond ratio (and it includes VBTLX).

You have a significant tilt to mega cap growth here (it's 50% of the equity allocation indicated).
trybogle wrote: Sun Jun 04, 2023 1:13 pmI haven't done a good job with this.
You've done fine, as long as you were intending to be super aggressive within the equity allocation and balancing that with a moderate stock:bond AA.
trybogle wrote: Sun Jun 04, 2023 1:32 pm This is my savings account, 401K is with Fidelity. I realize I need to take a step back and relook at all accounts.
What does this mean? You can't hold mutual funds in a savings account. Is it a taxable account? A traditional IRA? A Roth IRA?

So the AA above does not include your 401k... What does your entire portfolio look like? And what type of account is each fund/holding in?
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
rbd789
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by rbd789 »

Marseille07 wrote: Sun Jun 04, 2023 2:21 pm
cacophony wrote: Sun Jun 04, 2023 2:18 pm There's clearly a needed purpose of reducing market movement here, and that should be enough of a purpose.
That is a valid purpose, not opposing that at all. The OP said total bond doesn't have any purpose, which is what I pointed out as an issue.
OP actually said the funds are not needed for any purpose. I interpreted the statement as saying OP does not currently need (to withdraw) the funds for other purposes, and is simply unsure whether or not to change how they are invested. Not a statement that the bond fund definitely has no purpose for them, just uncertainty whether something else might be better. I think leaving it alone would be what I would do.
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trybogle
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by trybogle »

Beensabu wrote: Sun Jun 04, 2023 2:22 pm
trybogle wrote: Sun Jun 04, 2023 12:32 pm I dont need the funds for any purpose, I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX?
Yes.
trybogle wrote: Sun Jun 04, 2023 1:13 pm Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.
The overall stock:bond AA of the above is 50:50.

Your target date fund (VTTVX) is a fund-of-funds with a 55:45 stock:bond ratio (and it includes VBTLX).

You have a significant tilt to mega cap growth here (it's 50% of the equity allocation indicated).
trybogle wrote: Sun Jun 04, 2023 1:13 pmI haven't done a good job with this.
You've done fine, as long as you were intending to be super aggressive within the equity allocation and balancing that with a moderate stock:bond AA.
trybogle wrote: Sun Jun 04, 2023 1:32 pm This is my savings account, 401K is with Fidelity. I realize I need to take a step back and relook at all accounts.
What does this mean? You can't hold mutual funds in a savings account. Is it a taxable account? A traditional IRA? A Roth IRA?

So the AA above does not include your 401k... What does your entire portfolio look like? And what type of account is each fund/holding in?
thanks, I was implying a taxable account when I said savings account. I will pull together my 401k as well and get a broader guidance.
Marseille07
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Marseille07 »

rbd789 wrote: Sun Jun 04, 2023 2:30 pm OP actually said the funds are not needed for any purpose. I interpreted the statement as saying OP does not currently need (to withdraw) the funds for other purposes, and is simply unsure whether or not to change how they are invested. Not a statement that the bond fund definitely has no purpose for them, just uncertainty whether something else might be better. I think leaving it alone would be what I would do.
But the idea is that one would hold bonds to reduce portfolio volatility, whether you're withdrawing or not.

And if you are holding bonds for that purpose, you wouldn't be asking about Vanguard Mega Cap growth ETF.
rbd789
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by rbd789 »

Marseille07 wrote: Sun Jun 04, 2023 2:50 pm
rbd789 wrote: Sun Jun 04, 2023 2:30 pm OP actually said the funds are not needed for any purpose. I interpreted the statement as saying OP does not currently need (to withdraw) the funds for other purposes, and is simply unsure whether or not to change how they are invested. Not a statement that the bond fund definitely has no purpose for them, just uncertainty whether something else might be better. I think leaving it alone would be what I would do.
But the idea is that one would hold bonds to reduce portfolio volatility, whether you're withdrawing or not.

And if you are holding bonds for that purpose, you wouldn't be asking about Vanguard Mega Cap growth ETF.
True, I agree. It sounded like OP was looking for "permission" to chase return rather than hold on. I personally would hold on rather than sell the bond fund at a low. :beer
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KingRiggs
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by KingRiggs »

Your taxable account appears to hold 50% bonds. Please read up on the tax implications of asset LOCATION. Bonds should preferentially be held in your tax deferred accounts (ie, 401k).

It might be possible to sell your “down” bond funds at a loss, and buy efficient stock index funds in your taxable account, then rebalance to your desired stock/bond mix in your tax-deferred account.

Above all else, SIMPLIFY.
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smooth_rough
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by smooth_rough »

Sell those bonds now and lock in losses? I wouldn't do it unless you are trying to offset gains somewhere else.
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by dbr »

trybogle wrote: Sun Jun 04, 2023 12:32 pm

I am aligned with the 3-fund approach (using target funds) with my 401K and savings account.
Should I leave the funds in the VBTLX? I am not sure what to expect with the bond market going forward.

The three fund approach is for all your assets whether in a 401k, brokerage, savings, etc. VBTLX would be part of that bond allocation before and would continue to be now. The only question is whether you are following the plan to rebalance to your designated asset allocation and whether you have assets located most sensibly for tax efficiency. What to expect from the bond market, or from the stock market for that matter, going forward is irrelevant just as whatever the recent past history has been is irrelevant. Otherwise you have a different idea than the idea of a portfolio allocation distributed across broad index funds of US and international stocks and a bond index fund. (Not, as they say, that there is anything wrong with that, but in that case you need to be explicit in your understanding of what your investment plan idea is.)
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NateH
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by NateH »

trybogle wrote: Sun Jun 04, 2023 1:13 pm I am very okay with market gyrations, but wanted to make sure it was okay to leave the fund "as is".
I am not looking to cash out anytime soon (early 40s).

Below is my AA, i know i am bond heavy, I would like to transition to equities.

VBTLX 10%
VWITX (intermediate term tax exempt) 20%
VTTVX (2025 target fund) 45%
MGK (Mega Cap growth). 25% --> I have been contributing monthly to this fund since 2021 while the rest are in hold pattern.

I haven't done a good job with this.
Your portfolio is about 50% bonds and 40% large cap growth. What is your target allocation?
Why are you concerned with the fund that only comprises 1/5 of your bond allocation?
4X top-twenty S&P 500 prognosticator. I'd start a newsletter, but it would only have one issue per year. | dumb investor during 1999 tech bubble, current slice & dicer.
Call_Me_Op
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Re: Losses with Total Bond market index fund, suggestions on next steps

Post by Call_Me_Op »

trybogle wrote: Sun Jun 04, 2023 12:32 pm Hi Folks,

I had some dormant funds sitting in VBTLX (Total Bond Market Index fund) and I realize I should have paid attention and moved out last year when the interest rates started to creep up.
I am down by about 11% overall (average from last few years) :oops:
The thing you are not understanding is that all other market participants saw the same (past) movement in interest rates last year that you saw and listened to the same talking heads to which you listened at the time, and this "information" was fully reflected in the prevailing bond prices and interest rates. Did you know something that others did not know?

The only reasonable question you should be asking yourself (now) is do you want to hold a diversified basket of bonds? If you do not want to do that now - but you did want to do that when rates (both nominal and real) were much lower - I would respectfully suggest you need a better understanding of bonds.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
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