Author Topic: fvinx strategy  (Read 3904 times)

bpm

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fvinx strategy
« on: May 18, 2012, 08:38:20 AM »
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.


arebelspy

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Re: fvinx strategy
« Reply #1 on: May 18, 2012, 08:51:50 AM »
Can you time the market?  By switching your plan after 3 months to something new, that's exactly what you're trying to do.

You should be measuring your investment horizon in not just years, but decades.  I vote for being happy when it slides. Dips are buying opportunities.  Cheaper FVINX?  Yes please!
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bpm

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Re: fvinx strategy
« Reply #2 on: May 18, 2012, 08:53:34 AM »
No, my point was that these are NOT 3 month windows.   My question was would you buy dips in the same fund, or in other funds?

arebelspy

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Re: fvinx strategy
« Reply #3 on: May 18, 2012, 08:58:37 AM »
Right, and my point is that if you're switching plans after 3 months based on a dip, you're trying to time stuff and looking at results too much.

Ask yourself the reverse question: If it had risen over the last few months, would you be buying more or going somewhere else?

Pick a solid plan and stick to it.  Ignore what it's doing, and keep going.  If you decided FVINX is the way to go (or VTSAX or Permanent Portfolio or Wellington or whatever), then proceed, be grateful for the dips, and why would you look at other funds?
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

bpm

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Re: fvinx strategy
« Reply #4 on: May 18, 2012, 09:18:25 AM »
Ah, gotcha.

Mr Mark

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Re: fvinx strategy
« Reply #5 on: May 18, 2012, 01:48:59 PM »
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.