Better than Wellesley and Wellington? and 19 other questions
Sound Investing
The Benefits of Using a Vanguard Fund for Retirement
Wellington and Wellesley has been around since 1929. Over that period of time, the compound rate of return was 7.4%. The tax-managed fund is 0.56 per cent more expensive than a 50-50 strategy at Vanguard.
On July 22, 2023 Chris Pedersen addressed the Orange County Chapter of the American Association of Individual Investors. At the end of his 2 hour presentation there were many unanswered questions. Our last podcast and video addressed 16 of those questions.
In this podcast Paul responds to 20 more of the AAII questions.
1. How do you feel about using a balanced fund such as Vanguard Wellington in retirement?
01:44
2. I subscribe to your mantra of index funds, keep costs low, buy and hold etc, Is Merriman Wealth Management your company as well? I ask because that company espouses buy and hold and market timing and charges “AUM” fees. 14:15
3. I am a new retiree at 65 and have decided to use the “2 Funds for Life” target date fund with a 10% small cap value portfolio. Do you recommend the 10% small cap value be split between U.S. and international small cap value funds? 23:30
4. Is it too late for someone just entering retirement to change their investment portfolio to the 10-Fund Merriman Ultimate Buy and Hold Portfolio? 26:39
5. What is your impression of a recent Vanguard study that showed a large percentage of investors over 85 with an asset allocation of 100% in stocks? 30:14
6 How about using a technology fund instead of a small cap value funds? 35:00
7. What are some short term bonds funds you recommend? Bonds funds discussed VSBSX, VMLTX and VSCSX 39:24
8. I am 25 years old and have a high risk tolerance. Would it be okay to be all small cap value and would it be okay to invest 10% of the portfolio in individual small cap value stocks? 41:06
9. I have been using the Merriman 10 fund portfolio for 10 years. The annual rebalancing takes a lot of time. Do you recommend I move to the worldwide 4 fund portfolio instead? 43:00
10. I am retired and just took a full distribution from my 401k and invested the cash in a Vanguard Rollover IRA. I I use one of Merriman's portfolios should I stage my investment over many months or invest it all immediately? 44:45
11. I currently hold a large amount of cash and want to start investing. Do you recommend a lump sum investment or dollar cost average over a few months? 48:25 Fine Tuning tables.
12. Do you think the Avantis All Equity Markets Fund (AVGE) has enough small cap value to compete with the returns of your Worldwide 4 Fund Portfolio? 53:53
13. How does the Avantis Small Cap Value ETF (AVUV) compare to the DFA Small Cap Value ETF (DFSX)? 56:46
14. Do you recommend buying individual bonds instead of bond funds? 59:58
15. Do you recommend moving to a target date fund with a later retirement to get more exposure to equities? 1:02:00
16. What would happen if one of the Avantis funds closed? Paul recommends reading this article. 1:03:39
17. I own VBR (Vanguard Small Cap Value ETF) in a taxable account. Should I take the tax hit and move the investment in AVUV (Avantis Small Cap Value ETF)? 1:07:00
18. What is your opinion of holding target date funds or a fund of funds during retirement? 1:10:33
19. What is the range of Price to Earnings (P/E) ratio of large and small growth and value funds? 1:13:00
20. I think I need a professional advisor to help me with my financial decisions. Will the fees I pay be covered by higher returns? Financial Advisor services. 1:17:21
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