Quote:
Originally Posted by Robbb
I was just looking at returns over the past 15 years, If you invested $1,000 in Vanguard Total Bond fund it would be worth app $931, today, after all interest was reinvested. If you invested that same $1,000 in Vanguard VTI, Total market fund, it would be worth $2,090 today.
As pretty much a Boglehead in investing I'm really starting to question the wisdom of investing in any bond fund.
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With ALL investing there is what I call the shoulda, coulda, mighta. Buffet like has be come and adverb. Funds compare their returns to S&P 500 an attempt to put a number to average stock market returns. Buffet has said we should simply buy an S&P index fund. For those who want to follow Buffet, you can buy Berkshire Hathaway.
Today, you can get roughly 5% in a money market fund and you can use it for checking
account.
A bond fund? What you are buying is NOT the same as buying bonds. First of all they hold bonds that may not be of the investment grade you would purchase. Secondly they use leveraging. The borrow against bonds they hold to buy more bonds. The risk is higher and so is the return. Holders of the fund are paying the manager of the fund, which reduces your net return.
PLAN? A very old expression. Man plans and g-d laughs