60/40: They're coming for you
60/40: They're coming for you
Back in May I read a report in Barron’s that the 60/40 balanced mix was on track for its worst year ever. The comment seemed silly from multiple angles:
1. It was a straight-line extrapolation from the first four months of the year, i.e., 3X the decline achieved
2. Because stocks are more volatile than bonds, volatility in a balanced fund must be driven by stock returns, and stocks were not down that much in April; the carnage occurred in bonds.
[see also this thread: viewtopic.php?t=381001&sid=64d8b6c4ec3d ... 91218f0c01]
Now its June and stocks are down 20% too. Time to pull out the historical record and array the 6-month record through 6/30/2022 against all previous 6-month rolls.
Ideally one would look at VBIAX, a true 60/40 mix of “stocks” (all of them) and “bonds” (all maturities and investment-grade issuers). Unfortunately, it only goes back to 1986, too short a span to be probative when investigating claims of “worst ever.”
Fortunately, Vanguard Wellington has a record back to July 1929. Imperfectly, Wellington does not have a 60/40 mix, nor was the allocation consistent over time, nor even the strategy (I recall several posts by Nisiprius on the vicissitudes of Wellington over the years [links welcome]; Bogle’s book “Stay the Course” gives a backstage account.)
It is what it is. Here is a chart of all 6-month rolls for Wellington from 1/1930 through the end of 2021. The dashed line shows the return of negative 16.12% recorded through 6/2022.
Worst ever? Hardly. Because the 20% decline in stocks through June probably wouldn’t make the top 10 (or even 20) for stocks.
Returning to the chart and working backward in time:
1. The decline for Wellington through February 2009 was ten points worse;
2. The dotcom bust, and November 1987, and the demise of the Penn Central in 1970, and the Kennedy bust of 1962, and the invasion of France in 1940 were 6-month periods about as bad for Wellington;
3. The 1973-74 bear market was worse;
4. The 1937-38 bear market was much worse;
5. And of course, the six months through May 1932 reign supreme.
The start of 2022 as the worst six months ever? Puh-leeze. A six-way tie for 5th worst, at best.
Ride on, 60/40, ride on.
1. It was a straight-line extrapolation from the first four months of the year, i.e., 3X the decline achieved
2. Because stocks are more volatile than bonds, volatility in a balanced fund must be driven by stock returns, and stocks were not down that much in April; the carnage occurred in bonds.
[see also this thread: viewtopic.php?t=381001&sid=64d8b6c4ec3d ... 91218f0c01]
Now its June and stocks are down 20% too. Time to pull out the historical record and array the 6-month record through 6/30/2022 against all previous 6-month rolls.
Ideally one would look at VBIAX, a true 60/40 mix of “stocks” (all of them) and “bonds” (all maturities and investment-grade issuers). Unfortunately, it only goes back to 1986, too short a span to be probative when investigating claims of “worst ever.”
Fortunately, Vanguard Wellington has a record back to July 1929. Imperfectly, Wellington does not have a 60/40 mix, nor was the allocation consistent over time, nor even the strategy (I recall several posts by Nisiprius on the vicissitudes of Wellington over the years [links welcome]; Bogle’s book “Stay the Course” gives a backstage account.)
It is what it is. Here is a chart of all 6-month rolls for Wellington from 1/1930 through the end of 2021. The dashed line shows the return of negative 16.12% recorded through 6/2022.
Worst ever? Hardly. Because the 20% decline in stocks through June probably wouldn’t make the top 10 (or even 20) for stocks.
Returning to the chart and working backward in time:
1. The decline for Wellington through February 2009 was ten points worse;
2. The dotcom bust, and November 1987, and the demise of the Penn Central in 1970, and the Kennedy bust of 1962, and the invasion of France in 1940 were 6-month periods about as bad for Wellington;
3. The 1973-74 bear market was worse;
4. The 1937-38 bear market was much worse;
5. And of course, the six months through May 1932 reign supreme.
The start of 2022 as the worst six months ever? Puh-leeze. A six-way tie for 5th worst, at best.
Ride on, 60/40, ride on.
Last edited by McQ on Sun Jul 03, 2022 4:08 pm, edited 1 time in total.
You can take the academic out of the classroom by retirement, but you can't ever take the classroom out of his tone, style, and manner of approach.
Re: 60/40: They're coming for you
How do you define "stocks"?
I like the precision in the Wall Street Journal's reporting. THE WSJ reports that Thursday's decline closed out the S&P 500's worst first half of the year since 1970.
I like the precision in the Wall Street Journal's reporting. THE WSJ reports that Thursday's decline closed out the S&P 500's worst first half of the year since 1970.
Re: 60/40: They're coming for you
Channeling Mark Twain, the rumors of the demise of the 60/40 portfolio is greatly exaggerated.
A fool and his money are good for business.
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Re: 60/40: They're coming for you
While I tend to agree with you, I don't think Wellington is a convincing case study for the benchmark for all the reasons you mention. Also, I think you meant that you wanted to use VBIAX (rather than VBTLX).
Re: 60/40: They're coming for you
Media needs a story, so they overhype the situation.
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Re: 60/40: They're coming for you
Cool! Are these real or nominal returns?
Re: 60/40: They're coming for you
This is just bad journalism.
20% declines in the stock market are common. This the worst January-June since 1970, but there have been plenty of 20% declines. They just happened in different months.
Heck, we had a 22% drop in ONE day once, in 1987.
Yes, someone can say "This is the worst FIRST 6 months of the year since 1970", and next year, they might say "This was the WORST last two weeks in February since 1938", and both statements might be true, but they don't really MEAN anything.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: 60/40: They're coming for you
I don't think those are dumb headlines when we are seeing the worst first half of the year in 52 years.
Re: 60/40: They're coming for you
So what? One bad year does not justify any of those headline clickbait articles.Marseille07 wrote: ↑Fri Jul 01, 2022 2:53 pmI don't think those are dumb headlines when we are seeing the worst first half of the year in 52 years.
Last edited by GP813 on Fri Jul 01, 2022 3:03 pm, edited 1 time in total.
Re: 60/40: They're coming for you
I am still buying VBIAX...guess I am a contrarian now
Re: 60/40: They're coming for you
Yep. What is the proper response to the situation? "Run in circles, scream and shout"? Rethink your allocation at what is probably a very bad time to do so based on the fear that these articles encourage?GP813 wrote: ↑Fri Jul 01, 2022 2:58 pmSo what? One bad year does not justify any of those headline clickbait articles.Marseille07 wrote: ↑Fri Jul 01, 2022 2:53 pmI don't think those are dumb headlines when we are seeing the worst first half of the year in 52 years.
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Re: 60/40: They're coming for you
One should absolutely rethink their allocation, not on the stock side but the bond side.
Re: 60/40: They're coming for you
Yep, it's purely a stat line and nothing more, turned into a major headline.
Re: 60/40: They're coming for you
Exactly. Diversification only reduces the likelihood of loss; it doesn't guarantee. Since stocks and bonds have low correlation it's unlikely both will depreciate simultaneously, but unlikely doesn't mean impossible, and unlikely things happen. In a complex, unpredictable world and financial markets, that's to expected at least occasionally.GP813 wrote: ↑Fri Jul 01, 2022 2:58 pmSo what? One bad year does not justify any of those headline clickbait articles.Marseille07 wrote: ↑Fri Jul 01, 2022 2:53 pmI don't think those are dumb headlines when we are seeing the worst first half of the year in 52 years.
ROTH: 50% AVGE, 10% DFAX, 40% BNDW. Taxable: 50% BNDW, 40% AVGE, 10% DFAX.
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Re: 60/40: They're coming for you
Just one point in time…it’s not how you start, it’s how you finish. Ignore the noise.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
Re: 60/40: They're coming for you
You're being tricked. It's still only a 20% decline. We've had multiple 20% drops in the past 52 years...Marseille07 wrote: ↑Fri Jul 01, 2022 2:53 pmI don't think those are dumb headlines when we are seeing the worst first half of the year in 52 years.
Sept-Dec 2018 was a 20% decline... That was over 4 months instead of 6 months and during different months of the year.
But it's not like it's been 52 years since we've seen a 20% decline over a few months.
The headline can be technically correct and still dumb and misleading.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: 60/40: They're coming for you
We Bogleheads should try our hands at writing a few Headlines - technically correct but agendized in some way.
I'm not clever enough to take a stab but I'd be interested to see what others might manage.
I'm not clever enough to take a stab but I'd be interested to see what others might manage.
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Re: 60/40: They're coming for you
I took this thread as a contrarian indicator and TLH'd VTI into NTSX.
Re: 60/40: They're coming for you
The fundamental mechanics of bonds have not changed over the last few years. Inflation and interest rates have always been a risk for bond holders. It's dangerous (or at least anti-Bogleheadish) to let recent performance or predicted future performance guide one's allocation.
That said, periods of bad performance can sometimes highlight incompatibilities between one's risk tolerance versus their allocation and it's not bad to realign the two if it helps the investor stay the course the next time. Unfortunately, it feels like YTD bond performance has driven some investors into thinking "tactical asset allocation" is necessary for success going forward.
That said, periods of bad performance can sometimes highlight incompatibilities between one's risk tolerance versus their allocation and it's not bad to realign the two if it helps the investor stay the course the next time. Unfortunately, it feels like YTD bond performance has driven some investors into thinking "tactical asset allocation" is necessary for success going forward.
Last edited by geniekid on Fri Jul 01, 2022 4:36 pm, edited 1 time in total.
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Re: 60/40: They're coming for you
The precondition is first half of the year. No one's suggesting -20% was the worst in 52 years.HomerJ wrote: ↑Fri Jul 01, 2022 3:55 pm You're being tricked. It's still only a 20% decline. We've had multiple 20% drops in the past 52 years...
Sept-Dec 2018 was a 20% decline... That was over 4 months instead of 6 months and during different months of the year.
But it's not like it's been 52 years since we've seen a 20% decline over a few months.
The headline can be technically correct and still dumb and misleading.
But as far as 60/40, the real issue isn't about the stocks, it's about the bonds.
Re: 60/40: They're coming for you
What are the better alternatives and why ? Just wondering …
John C. Bogle: "Never confuse genius with luck and a bull market".
Re: 60/40: They're coming for you
Then why not "Worst First Half In 52 Years Only 20% Down!" That's really my response to the headline. It's not as bad as it sounds -- yet anyway.Marseille07 wrote: ↑Fri Jul 01, 2022 4:37 pmThe precondition is first half of the year. No one's suggesting -20% was the worst in 52 years.HomerJ wrote: ↑Fri Jul 01, 2022 3:55 pm You're being tricked. It's still only a 20% decline. We've had multiple 20% drops in the past 52 years...
Sept-Dec 2018 was a 20% decline... That was over 4 months instead of 6 months and during different months of the year.
But it's not like it's been 52 years since we've seen a 20% decline over a few months.
The headline can be technically correct and still dumb and misleading.
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Re: 60/40: They're coming for you
As I mentioned elsewhere, the real issue with regard to 60/40 is actually the bond side, not (yet) the equity side.
And the thing is, it's probably too late to make a move.
Re: 60/40: They're coming for you
Yeah, sorry. The headline I saw was about the S&P 500 half-year decline being the worst in 52 years, but that is different than the bond side of things from the article. I should also clarify that I am concerned about the overall economy and where things could lead for people, so I don't mean to dismiss that. But it still seems hyped to highlight the 52 years at this point, if it's simply a matter of timing for the present decline.Marseille07 wrote: ↑Fri Jul 01, 2022 5:33 pmAs I mentioned elsewhere, the real issue with regard to 60/40 is actually the bond side, not (yet) the equity side.
And the thing is, it's probably too late to make a move.
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Re: 60/40: They're coming for you
Using CDs or Stable Value Funds for the 40% fixed income portion helped a lot.Marseille07 wrote: ↑Fri Jul 01, 2022 5:33 pmAs I mentioned elsewhere, the real issue with regard to 60/40 is actually the bond side, not (yet) the equity side.
And the thing is, it's probably too late to make a move.
Re: 60/40: They're coming for you
It's always too late, and then eventually it doesn't matter anymore. There's no need to make a move. All you have to do is wait.Marseille07 wrote: ↑Fri Jul 01, 2022 5:33 pmAs I mentioned elsewhere, the real issue with regard to 60/40 is actually the bond side, not (yet) the equity side.
And the thing is, it's probably too late to make a move.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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Re: 60/40: They're coming for you
It may not be true. What they were claiming was statistics on a 40% drop instead. I haven’t bothered to really look at the other interesting first halves, but the 2020 calendar was obviously aligned beautifully to be down about 30% in a calendar quarter. You can’t annualize that because stocks can’t go negative. so the headline writers were stymied somewhat, I guess.Itster wrote: ↑Fri Jul 01, 2022 5:27 pmThen why not "Worst First Half In 52 Years Only 20% Down!" That's really my response to the headline. It's not as bad as it sounds -- yet anyway.Marseille07 wrote: ↑Fri Jul 01, 2022 4:37 pmThe precondition is first half of the year. No one's suggesting -20% was the worst in 52 years.HomerJ wrote: ↑Fri Jul 01, 2022 3:55 pm You're being tricked. It's still only a 20% decline. We've had multiple 20% drops in the past 52 years...
Sept-Dec 2018 was a 20% decline... That was over 4 months instead of 6 months and during different months of the year.
But it's not like it's been 52 years since we've seen a 20% decline over a few months.
The headline can be technically correct and still dumb and misleading.
This time is the same
Re: 60/40: They're coming for you
Yeah, and who cares? 20% from January to whatever is exactly the same as 20% from March to whatever.Marseille07 wrote: ↑Fri Jul 01, 2022 4:37 pmThe precondition is first half of the year.HomerJ wrote: ↑Fri Jul 01, 2022 3:55 pm You're being tricked. It's still only a 20% decline. We've had multiple 20% drops in the past 52 years...
Sept-Dec 2018 was a 20% decline... That was over 4 months instead of 6 months and during different months of the year.
But it's not like it's been 52 years since we've seen a 20% decline over a few months.
The headline can be technically correct and still dumb and misleading.
I can't believe you are actually falling for this. It's not a big deal just because it started in January.
What they are suggesting is something bad is happening that hasn't happened in 52 years so you better worry about it, and CLICK ON THIS ARTICLE.No one's suggesting -20% was the worst in 52 years.
Sheesh.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: 60/40: They're coming for you
Buddy, I'm not falling for anything...HomerJ wrote: ↑Fri Jul 01, 2022 8:38 pm Yeah, and who cares? 20% from January to whatever is exactly the same as 20% from March to whatever.
I can't believe you are actually falling for this. It's not a big deal just because it started in January.
What they are suggesting is something bad is happening that hasn't happened in 52 years so you better worry about it, and CLICK ON THIS ARTICLE.No one's suggesting -20% was the worst in 52 years.
Sheesh.
The only change I'm making is I'm gathering up more cash because I might buy a house. No crazy moves here.
Re: 60/40: They're coming for you
I am sticking with 60/40 with the only change to fixed income side, as I am increasing quality and matching duration to my taste by using treasuries.
It is kind of silly to say an asset allocation is dead, which is all this is. Does this mean something else like 70/30 is alive and kicking
It is kind of silly to say an asset allocation is dead, which is all this is. Does this mean something else like 70/30 is alive and kicking
Re: 60/40: They're coming for you
But you seem to be implying that either you already did or people maybe should have moved away from bonds...Marseille07 wrote: ↑Fri Jul 01, 2022 9:11 pm The only change I'm making is I'm gathering up more cash because I might buy a house. No crazy moves here.
FWIW - we are in our mid-40's and still riding our 60/40 AA. Ultimately, 60/40 is the right place for us based on our need, willingness, and ability to take risk. I don't see how any of those change in the current markets (and with our situation - still being several years away from retirement - and still likely to have "enough" when we get there).Marseille07 wrote: ↑Fri Jul 01, 2022 5:33 pm As I mentioned elsewhere, the real issue with regard to 60/40 is actually the bond side, not (yet) the equity side.
And the thing is, it's probably too late to make a move.
I always assume the view of those thinking that market conditions affect their AA in some form must think they are able to time the markets... After years of failing to do so - I know I can't time the markets. And thus I'm better off not attempting to play that game... I just set my AA correctly, save aggressively, and take what the market gives me. It should be "enough"...
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Re: 60/40: They're coming for you
I think it's a difficult situation rn. Bonds should eventually recover, the question is when. We might be talking about 2025, 2027, it's anyone's guess.SnowBog wrote: ↑Fri Jul 01, 2022 11:26 pm I always assume the view of those thinking that market conditions affect their AA in some form must think they are able to time the markets... After years of failing to do so - I know I can't time the markets. And thus I'm better off not attempting to play that game... I just set my AA correctly, save aggressively, and take what the market gives me. It should be "enough"...
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Re: 60/40: They're coming for you
I’m fine with that. Why aren’t you?Marseille07 wrote: ↑Sat Jul 02, 2022 12:05 amI think it's a difficult situation rn. Bonds should eventually recover, the question is when. We might be talking about 2025, 2027, it's anyone's guess.SnowBog wrote: ↑Fri Jul 01, 2022 11:26 pm I always assume the view of those thinking that market conditions affect their AA in some form must think they are able to time the markets... After years of failing to do so - I know I can't time the markets. And thus I'm better off not attempting to play that game... I just set my AA correctly, save aggressively, and take what the market gives me. It should be "enough"...
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Re: 60/40: They're coming for you
Max drawdown of the Vanguard Balanced index fund from inception to the end of 2021 was a drop of 32.57%.
https://www.portfoliovisualizer.com/bac ... ion1_1=100
In 2022 the drop has been 17.1%
https://www.portfoliovisualizer.com/bac ... ion1_1=100
Using intermediate treasuries instead of total bond the drop was 15.73%
https://www.portfoliovisualizer.com/bac ... tion2_1=40
You may be inclined to point out that VFIUX has a little bit shorter duration than total bond, but historically a treasury portfolio could match and even exceed the downside protection of total bond with a shorter duration:
https://www.portfoliovisualizer.com/bac ... tion3_2=40
https://www.portfoliovisualizer.com/bac ... ion1_1=100
In 2022 the drop has been 17.1%
https://www.portfoliovisualizer.com/bac ... ion1_1=100
Using intermediate treasuries instead of total bond the drop was 15.73%
https://www.portfoliovisualizer.com/bac ... tion2_1=40
You may be inclined to point out that VFIUX has a little bit shorter duration than total bond, but historically a treasury portfolio could match and even exceed the downside protection of total bond with a shorter duration:
https://www.portfoliovisualizer.com/bac ... tion3_2=40
Last edited by Northern Flicker on Sat Jul 02, 2022 1:47 am, edited 1 time in total.
Re: 60/40: They're coming for you
The same is true with stocks... They'll recover at some point. Could be later this year, in 2025, or in 2027.Marseille07 wrote: ↑Sat Jul 02, 2022 12:05 amI think it's a difficult situation rn. Bonds should eventually recover, the question is when. We might be talking about 2025, 2027, it's anyone's guess.SnowBog wrote: ↑Fri Jul 01, 2022 11:26 pm I always assume the view of those thinking that market conditions affect their AA in some form must think they are able to time the markets... After years of failing to do so - I know I can't time the markets. And thus I'm better off not attempting to play that game... I just set my AA correctly, save aggressively, and take what the market gives me. It should be "enough"...
But I don't attempt to time the market with either stocks or bonds. I'll just let that "time in the market" do its thing for me.
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Re: 60/40: They're coming for you
Whew!
I am so glad DW and I are at 56% equities/44% bonds, just a tad bit off our desired AA of 55% equities/45% bonds.
Sure wouldn't want to be one of those 60/40 fools, they are doomed!
Large declines should be expected over the life of our investing experiece, certainly nothing new here in 2022.
Broken Man 1999
I am so glad DW and I are at 56% equities/44% bonds, just a tad bit off our desired AA of 55% equities/45% bonds.
Sure wouldn't want to be one of those 60/40 fools, they are doomed!
Large declines should be expected over the life of our investing experiece, certainly nothing new here in 2022.
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
Re: 60/40: They're coming for you
Ooh... Good point... We are actually 61/39 right now. I guess I can sleep well tonight! (Oh wait, I slept fine last night too... )Broken Man 1999 wrote: ↑Sat Jul 02, 2022 12:01 pm Whew!
I am so glad DW and I are at 56% equities/44% bonds, just a tad bit off our desired AA of 55% equities/45% bonds.
Sure wouldn't want to be one of those 60/40 fools, they are doomed!
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Re: 60/40: They're coming for you
50% of all investors underperform the market! And 50% of all people make the median income or less!
In theory, theory and practice are identical. In practice, they often differ.
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Re: 60/40: They're coming for you
Looking in the rearview mirror rarely, if ever, tells you what lies ahead.McQ wrote: ↑Fri Jul 01, 2022 1:39 pm Back in May I read a report in Barron’s that the 60/40 balanced mix was on track for its worst year ever. The comment seemed silly from multiple angles:
1. It was a straight-line extrapolation from the first four months of the year, i.e., 3X the decline achieved
2. Because stocks are more volatile than bonds, volatility in a balanced fund must be driven by stock returns, and stocks were not down that much in April; the carnage occurred in bonds.
[see also this thread: viewtopic.php?t=381001&sid=64d8b6c4ec3d ... 91218f0c01]
Now its June and stocks are down 20% too. Time to pull out the historical record and array the 6-month record through 6/30/2022 against all previous 6-month rolls.
Ideally one would look at VBTLX, a true 60/40 mix of “stocks” (all of them) and “bonds” (all maturities and investment-grade issuers). Unfortunately, it only goes back to 1986, too short a span to be probative when investigating claims of “worst ever.”
Fortunately, Vanguard Wellington has a record back to July 1929. Imperfectly, Wellington does not have a 60/40 mix, nor was the allocation consistent over time, nor even the strategy (I recall several posts by Nisiprius on the vicissitudes of Wellington over the years [links welcome]; Bogle’s book “Stay the Course” gives a backstage account.)
It is what it is. Here is a chart of all 6-month rolls for Wellington from 1/1930 through the end of 2021. The dashed line shows the return of negative 16.12% recorded through 6/2022.
Worst ever? Hardly. Because the 20% decline in stocks through June probably wouldn’t make the top 10 (or even 20) for stocks.
Returning to the chart and working backward in time:
1. The decline for Wellington through February 2009 was ten points worse;
2. The dotcom bust, and November 1987, and the demise of the Penn Central in 1970, and the Kennedy bust of 1962, and the invasion of France in 1940 were 6-month periods about as bad for Wellington;
3. The 1973-74 bear market was worse;
4. The 1937-38 bear market was much worse;
5. And of course, the six months through May 1932 reign supreme.
The start of 2022 as the worst six months ever? Puh-leeze. A six-way tie for 5th worst, at best.
Ride on, 60/40, ride on.
Re: 60/40: They're coming for you
I moved half of my total bond market fund into the stable value fund in 2020 when bonds first started moving in tandem with equities. I wouldn't want to sell more out of my total bond market fund now, at a 12% loss, though. I am pondering buying more of the S&P 500 fund (at a 22% loss) with some of the bond fund (at a 12% loss). I think tweaking my asset allocation to be a bit more aggressive on the equities side will make up for the lower earnings in the stable value fund. Eventually. In the meantime, it gives me a stable value fund to withdraw from that hasn't lost as much as the other two funds.SpaceCowboy wrote: ↑Fri Jul 01, 2022 5:57 pmUsing CDs or Stable Value Funds for the 40% fixed income portion helped a lot.Marseille07 wrote: ↑Fri Jul 01, 2022 5:33 pmAs I mentioned elsewhere, the real issue with regard to 60/40 is actually the bond side, not (yet) the equity side.
And the thing is, it's probably too late to make a move.
When considering rolling over one's savings from a 401k to an IRA, it's worth considering access to a stable value fund. They aren't available in IRAs.
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Re: 60/40: They're coming for you
As long as I can remember, Wellington's ~65% stock has been large cap value. Not even close to the 60% large cap blend (growth dominated) total market in recent years. Just sayin'.
"It's not the best move, but it is a move." - GMHikaru
Re: 60/40: They're coming for you
FWIW, morningstar has rated VWELX stock allocation as Large Blend for 2020 - 2022. Vanguard or Lipper may rate the fund using different criteria.HeavyChevy wrote: ↑Mon Jul 04, 2022 4:07 pm As long as I can remember, Wellington's ~65% stock has been large cap value. Not even close to the 60% large cap blend (growth dominated) total market in recent years. Just sayin'.
Source: https://www.morningstar.com/funds/xnas/vwelx/portfolio, click on the Stock Style button and change it from Map to Historical.
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Re: 60/40: They're coming for you
Isn't it significantly higher than 50% underperforming the market due to behavioral errors? I don't remember the exact stat, but I think you're actually underselling the panic/clickbait potential.technovelist wrote: ↑Sat Jul 02, 2022 9:46 pm50% of all investors underperform the market! And 50% of all people make the median income or less!
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Re: 60/40: They're coming for you
What makes bonds so special that they need to be reshuffled while stocks on the other hand apparently do not?Marseille07 wrote: ↑Fri Jul 01, 2022 3:13 pmOne should absolutely rethink their allocation, not on the stock side but the bond side.
IIRC you don’t own any bonds at all, so why do you even care?
Being wrong compounds forever.
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Re: 60/40: They're coming for you
Vanguard lists it as large value, not blend. From their site:sycamore wrote: ↑Mon Jul 04, 2022 4:27 pmFWIW, morningstar has rated VWELX stock allocation as Large Blend for 2020 - 2022. Vanguard or Lipper may rate the fund using different criteria.HeavyChevy wrote: ↑Mon Jul 04, 2022 4:07 pm As long as I can remember, Wellington's ~65% stock has been large cap value. Not even close to the 60% large cap blend (growth dominated) total market in recent years. Just sayin'.
Source: https://www.morningstar.com/funds/xnas/vwelx/portfolio, click on the Stock Style button and change it from Map to Historical.
Investment strategy
The fund invests 60% to 70% of its assets in dividend-paying, and, to a lesser extent, non-dividend-paying common stocks of established medium-size and large companies. In choosing these companies, the advisor seeks those that appear to be undervalued but to have prospects for improvement. These stocks are commonly referred to as value stocks. The remaining 30% to 40% of fund assets are invested mainly in investment-grade corporate bonds, with some exposure to U.S. Treasury and government agency bonds, as well as mortgage-backed securities.
Don't know why Morningstar would disagree with their stated strategy and portfolio.
"It's not the best move, but it is a move." - GMHikaru
Re: 60/40: They're coming for you
If this allocation has done poorly in the last 6 months, isn’t the contrarian view to actually buy it now if you like the allocation?