Hi all,
I invested about 70K in FVINX and a few thousand in VWELX a few months ago. Some brief and mediocre at best earnings for a bit, but the last month or so has seen a serious slide in both of these funds. Clearly these aren't funds you invest in for a 3 month window, but curious about how you all react when it's down as it is now. Do you reinvest, essentially doubling down at the lower price? Or do you just set it and forget it for 3 years or more? I'm in a position to add to my portfolio but conflicted- not sure if I should add to the position at a lower price or diversify into other index funds.
Plot the performace of FVINX [=S&P500], VWELX [Balanced fund, 60% stock, 40% bonds], and a US Treasuries bond index over different time periods. You'll see in general, over the long term, shares beat bonds. Wellington invests in both, but is a balanced fund, so periodically they sell/buy to reattain that 60/40 ratio, helping to 'sell high, buy low' and ratchetting the returns so over time the balanced fund beats both end members (note how it is not an average!) rate of return, with less volality than stocks.
As Arebelspy says, you portfolio should be growing so fast your rebalancing means shifting your purchases to maintain your own asset allocation. VWELX is a great 'core' fund IMHO, as if its 50% of your stash, it probably has enough bonds so your other 50% can be a selection of pure stock funds.
It's long term horizons, high savings rate, tax and fee efficiency + regular rebalancing that are keys.