Personal Investments • Replace Bond Funds??

Now that NAV's are starting to heal and distributions are starting to cool down with Bond Funds, I was looking for advice on whether I should replace my Bond Funds with something less sensitive to interest rates with a better return (if that exists). 1/2 of my portfolio is in 3 funds, BNDX, VFIDX and VFSUX. This is all qualified money totaling $500 K. I have owned these funds for almost 9 years and are almost at breakeve from what I paid for them. Over this time period, the distributions have been relatively low, with the exception of recent times. Since inception, these funds have yielded 2.35, 4.66 and 3.07 % respectively.

Are there better funds to get a better return on this 1/2 of my portfolio, or am I missing something? I am 73 years old and would like to see this half of my portfolio do better in NAV and dividend or coupons or distributions or interest, whatever you want to call it. In other words make better money. At age 73 I don't want to go through another extended period of time with this kind of experience. Any ideas would be appreciated. Thank you.

first, are you sure your three funds bndx, vfidx and vfsux have only just "broken even" over the past 9 years?? Because that's not what I see. You didn't give us critical pieces of information to know for sure:
1. the exact date you made your purchase in these funds (if it was even just once and no more)
2. did you reinvest the dividends or take them as cash?
3. Are you looking at the NAV over the past 9 years or the total return (which includes the dividends)?
4. did you invest equal amounts in each of these three or different percentages in each?

Since we don't know the answers to these questions, I'll just look at the three going back 9 years from today and divide your money (the 50% that was invested in these) in three equal amounts. If I do that, it looks like these three funds in total are UP 24.84%. That's different from merely breaking even over the past 9 years, don't you think? (see below):



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but maybe you're looking at your performance without the dividends reinvested because you took them out. If we look at the performance without dividends reinvested it does look like you've only broken even:



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but you're obviously not looking at the whole picture are you? I mean it's not like you DIDN'T receive those dividends, right?

But here's something even more important to understand.

You should be concerned with the overall return of your portfolio rather than the component parts of the portfolio. Let's use the same funds over the past 9 years but as you say call that 50% of your portfolio. Then let's assume the other 50% of your portfolio is in stocks, specifically VT the total world stock market index fund. How would the performance have been over the same 9 years? You'd have been UP 79.75% over those 9 years.



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So maybe don't worry about parts of your portfolio and look at the overall performance of your portfolio instead. You can continously tinker with the component parts, but is that helpful? I really don't think so. The allocation (percentage in stocks and bonds overall) will be a greater determinent anyway of your performance rather than the specific funds you choose, especially if you're tinkering around the margins.

this is the second time in a few days that, first, someone thinks their portfolio (or part of it) did something it didn't even do. And then they want to change their holdings because of what they thought it did that it didn't. People have a hard time just staying in their seat, don't they?

what do you think?

Statistics: Posted by PGHunt24 — Sat Sep 14, 2024 10:07 pm — Replies 17 — Views 1063