BNDW
Vanguard Total World Bond ETF
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Is there any cyclical nature to specific bond markets that can be used as a rough guideline for investing?
Ending Age-Old Investment Arguments
BNDW vs PGBIX. What's a better match for VT?
Is There a Total World Mutual Fund that Contains Government Treasury Bonds Only?
Looking to expand my Roth IRA and I want to make sure it makes sense to add the ETFs I am considering.
My father passed. What should my mother do with the money she has left?
"Bonds are safe" + "ETFs are safe" = "Bond ETF can't go down"
Helping my almost retired MIL and FIL get their messed up investments sorted out. Is what I plan to do the right thing?
Mentions
For me, BRK is my medium sized downturn hedge. I am planning a 1 year expenses cash + 25% VXUS + 45% VTI + 15% BNDW + 15% BRKB. The premise is that BRKB will buy companies if we see a moderate-to-significant recession as well as market sentiment will flip faster than I can react, driving dollars from tech to 'safe havens' like BRK and SCHD purely on sentiment. Yes BRK will drop too, but the combo of market sentiment and their generally safer assets and their value philosophy make it my medium-recession hedge. 1 year cash + 15% world bonds is my severe recession hedge. No, it wont outlast a 10-30 year recession, but between cutting expenses, willingness to sell some assets at a loss, and likelihood of another 30 year recession, I'm ok with that. This also turns into roughly 60/40 US/international exposure and a 85/15 equity to bond ratio which are reasonable ratios to hedge against various other factors.
200k VT 100k BNDW Don’t look at it again until you need it.
VT and BNDW - allocate according to your time horizon. Anything else is just gambling.
6K into VTI - 1.5K into VEA - 1.5K into VWO - 1K into BNDW - completely forget about it for 20 years. Or….Vegas?
why S&P20 and S&P500 separately? IDK the exact weights but something like 25% of your S&P500 fund is the top 20. You're already covered lol. NASDAQ in there feels redundant too. At your age I wouldn't allocate anything to dividends. Have equities and some in bonds. Debatable, but I would consider physical gold over an ETF, given the use case of gold extends into the "not being able to access financial markets" territory. I'm not saying everyone should have gold, but I'm saying if you're gonna have it, physical is better. I'd just stick with a 3 fund portfolio and call it a day. Hell, buy VT and BNDW and you can have a 2 fund portfolio. Maybe throw a REIT in there if you want some real estate exposure, I like SCHH.
Most bonds I track pay interest. Have you thought about buying BND or BNDW? I have BND and BNX in my trad 401k.
By no means comprehensive but I can say SCHY and BNDW are the only tickers that get borrowed from my portfolio over years of being part of the program. I get shares loaned out probably once a week from one or the other. It probably helps to have several hundred shares.
It pays dividend (interest). The price drop is due to fed interest rate. in 2020-2021 it's nearly 0 interest rate and now it's >4%. Average time to maturity in BNDW is \~8 years. When interest in rising, people would buy new bonds and selling old ones make old ones drop in price.
how does BNDW make money? it's 5 year is big negative?
A mixture between stocks and bonds. like 60% VT + 40% BNDW. For corporate bonds, you may buy JAAA/PAAA/CLOA, but honestly BNDW is fine as it includes corporate bonds
FYI, buying more funds doesn't necessarily make your portfolio more diversified. You can be fully diversified with 2 funds, VT and BNDW. That gives you the entire equity and bond market. Though the common advice is for BND for the US bond market. And splitting out VT to VTI + VXUS to add a level of customization over the allocation of US vs INTL. This is the basis of the "3 fund portfolio" for which everything is measured by.
>Allocation is all across the board. That's pretty vague... Equities have performed well over the past 13 years; bonds not so much. If you have a low equity allocation, that will have held back returns. >Fee is 1.5% That will eat into returns quite a bit. Especially if you're also paying another 1% for active mutual fund fees on top of that. >Currency SGD My impression is that SGD yields and returns should be fairly comparable to USD returns, though I'm not sure. (By contrast JPY and EUR rates have been lower than USD, so returns have been lower, not to mention a falling exchange rate). Not sure how an emphasis on local assets would affect it, but I get about 8% returns in USD for a global 60/40 index portfolio represented by VSMGX over the last 13 years (https://stockcharts.com/freecharts/perf.php?VT,BNDW,VSMGX&p=6). Assuming that is an appropriate benchmark risk-wise, subtracting 1.5% advisor fee, your account underperformed by about 2% CAGR.
Had some unanticipated expenses so nothing, but will go back to buying 95% VT 5% BNDW in a month or two regardless of market conditions.
I haven't been trading credit spreads long enough to answer your questions with a lot of confidence. Regarding ROI, it seems like it can be quite substantial up to a certain point. I need some more time and experience with it before saying anything for certain. What I've been doing is taking half of my profits and buying boring income producing securities like SCHD, NOBL, PGX, BND, BNDW, VNQ, etc. Whether it is worth it or not, I can't answer. In my case, it has to be.
23M. I’m currently following a portfolio of 3% BNDW, 63% VTI, 34% VXUS. In the wake of potential rate cuts in the coming days/weeks, how much stock should I sell, and should I switch to short term treasury bonds instead of BNDW?
>How do I navigate if recession hits General advice is not to invest more than you’re willing to leave in the market for a minimum of 5 years. Diversification also helps. VT is total world stock market and captures every publicly traded company on the planet. Alternatively you could go VTI/VOO + VXUS to control your exposure to US and International independently. BNDW is total world bond market. Alternatively you could go BND + BNX to control your exposure to US and International independently. Recommend doing some reading on r/bogleheads
If you don't know a thing about investing and want to invest in stocks then step 1 is to open a brokerage account (ideally a retirement account with some kind of tax advantages, like an IRA or Roth IRA if you live in the US). I'm not familiar with other countries, but stick with whatever passes for the big trusted brokers wherever you live like Fidelity, Vanguard, Schwab, or Merill. The last thing you want is for some Chinese fintech startup to abscond with your retirement money. Stocks and funds composed of multiple stocks all go by "tickers," or abbreviations. It's generally agreed that you won't go wrong putting your money in large diversified stock funds like VOO (largest 500 US companies) or VT (entire world stock index). Most of their value over time will come from a rising market value if you choose to sell your shares back to the market. If you'd prefer something more like a second salary (income) instead then you may prefer something like SCHD (which focuses on companies with larger payouts) or VIG (which focuses on companies which grow their payouts more over time). Many people say you should also diversify into assets besides stocks, so putting some of your investing money (maybe 10% or less if you're under 30 and up to 50% if you're in your 50s or later) in a bond fund like BNDW is worth considering. Overall this will invest your money in a wide variety of assets so that you can receive an average profit based on their performance over time. Don't use money you think you might need in the next 5 years to invest in stocks. Prices will fluctuate unpredictably and selling when prices are low because you suddenly need the money is how you lose a lot of money forever. You may hear about "diversification," which is protecting your investments from bad luck by owning lots of different things. Each of these funds has hundreds of unique assets in it so owning just one or two of the funds is plenty of diversification. It's very difficult to get a better return than the market average you'll get from one of these funds, but it is possible if you work hard and have a knack for investing in individual companies. If you think you might enjoy learning about it and want to try beating the average you can start with books like One Up on Wall Street and Beating the Street by Peter Lynch. He was one of the best investors of the last hundred years and his approach is very common sense. Start with just a few companies you think might excel with just 1 or 2% of your money in each. You'll make a lot of mistakes at first and it's better to lose 1 or 2% than 10 or 20%. You'll also get a lot of benefit from a more numbers-based approach, which you can start learning about in a book like The Intelligent Investor by Benjamin Graham or Aswath Damodaran's corporate finance and asset valuation courses on YouTube. After you've invested 10-30 companies over the course of 5 or 10 years and finished several of those books and courses you'll know for sure if you're cut out for individual stock investing or should stick to the large diversified funds.
Most of these funds are super high expense ratio and are leveraged and not necessarily great for long term holds and simplicity for newer investors. Even the bond funds recommended are not bad but can do better with just getting BND or BNDX or BNDW
At 27 it's totally fine, and honestly a good plan. If you want 60/40 VTI/VXUS look at VT for a one fund option (although keeping VXUS separate lets you claim the foreign tax credit at some point). When you hit 30 you should probably consider starting to add some small amount of bonds (BNDW is a great option).
At 94 million I would do 50% VTI, 25% VXUS, and 25% BNDW. My dividend yield would be 2.28% and my annual dividends would be 2,140,850 a year or 178,404 a month. More than enough to for me and all my friends to live off in perpetuity without ever having to touch the principal or the growth.
VT. In a little more than a decade add in a tiny bit of BNDW. Ezpz.
First, great work breaking the cycle. That's worth celebrating. I also am first generation white collar. I grew up in a poor farming family with people who were literally afraid of math and finance, and it utterly crippled them from being functional adults. Good luck navigating the nuances, it can be challenging for sure. Agreed with avoiding any active management. There is very little an advisor is really needed for, especially at your age. You can pay a pay-per-hour CFP to look at your finances and give guidance occasionally as needed for a spot check, but this stuff really isn't that complex once you are used to it. I personally wouldn't put Fidelity in the same sentence of Robinhood or Webull - its like comparing a full trim Subaru to a tuk-tuk or offbrand moped. RH and WeBull are considered discount brokers for a reason, and over time, the "discount" part is going to sting you. Either they won't be there to support you when you need them, or they will keep incorrect records that will burn you. I would strongly recommend picking a large, well established broker like Vanguard, Schwab, Fidelity, and sticking with them, possibly for life. You WILL need to eventually call them, and the first time that that happens, you will realize exactly why RobinHood is considered a discount brokerage - almost zero support. And even less when you need immediate help. If you have to ask for guidance on what to invest in, I'd point you towards /r/bogleheads and suggest you start with a simple 2 fund (VT/BNDW), 3 fund (VTI/VXUS/BNDW), 4 fund (VTI/VXUS/BND/BNDX) portfolio. All give you extremely well diversified portfolios with coverage of both equities and bonds covering more or less the whole planet. It will make a rock solid core for your portfolio. The vast majority of your portfolio should be boring funds. At your age, mid 30s, I would recommend having some amount of bond exposure. It doesn't have to be a lot, but you need to figure out what rule of thumb you're comfortable with and stick with it. Also, I strongly recommend you check out ["the flowchart"](https://www.reddit.com/r/personalfinance/comments/4gdlu9/how_to_prioritize_spending_your_money_a_flowchart/) for best practices on what to fund first. The general best practice would be to contribute to your 401k/403b up to the matching level, max out your IRA, finish maxing out your 401k, and then contributing to taxable accounts. I also recommend reading the following books, in this order. 1. Richest Man in Babylon by Clason 2. The little book of common sense investing by Jack Bogle 3. A Random Walk down Wall Street by Malkiel 4. The Intelligent Investor by Ben Graham If you do, you'll understand why I am suggesting what I am suggesting.
I'd say the classic VT (2% div) and some BNDW (4% div) are usually the best bet.
As you get older your TDF is composed of more and more bonds and money market funds. This is primarily to PROTECT your money for retirement, but the trade of for reduced risk is that your returns are significantly lower. If you wanted to swap out an equivalent would be a variation of the 2/3/4 fund portfolio that you can find in r/Bogleheads , but TLDR that is some ratio of VTI+VXUS+BND+BNDX or VT+BNDW. Less protection for your money, but more money can be made if you just buy and hold.
I'm up almost 14% YTD. But inflation has been persistent, jobs numbers are looking bad, and the Fed's stuck in a bind. Credit card defaults and auto defaults are nearly at ATH, and we've got whatever this trade war's gonna do. So everything's either bad or uncertain, with the exception of recent GDP numbers. I bought down in the bear market this year, so that's why I've taken off pretty hard this year. I'm back to putting into BNDW and IAUM for now, as well as ForEx ETFs. Just socking money where it can still make a middling return and refusing to buy the S/P or Dow this high up until conditions improve.
Yup, VTI covers literally everything in the US market in a market cap weighted fashion, literally the perfect average of the market, although I'd def hold a fair amount in an international index like VXUS. 70:30 VTI:VXUS is very common for those who really believe the US market bull run. I think the downturn in BNDW is primarily due to the war in Ukraine, which puts two huge international bond suppliers in a VERY risky spot, really upsetting the bond market (although I'm not 100% on that, that's just what i think). When you look at the returns its really 16% value downturn but still returning 4% a year as dividend income, which if reinvested consistently really means nothing's happened. Also, if it stays roughly flat like it is, the dividends being reinvested mean it'll still be going up around 4% anually for YOUR portfolio. Bonds are an old school kind of investing, I recommend that 5% as a token sum for non-conservative as a small hedge against stocks but many many people get away with 100% stock so feel free to just do 70:30 VTI:VXUS if you so please. While I can't expressly recommend continued holding of TKO, most indexers still recommend around 5-10% of your portfolio being held in regular stocks to "scratch the itch", and you fall right into that % range :)
Thank you for the response! If I'm reading correctly, dropping both VOO and VO in favor of VTI would be the best bet? I think a very small portion of BND or BNDW would work well, but I don't want it to be too much since I don't want to be conservative. I am going to keep TKO since it's my baby.
Tbh what I'd recommend for long term holding is drop either VOO or VTI as the first half of VTI IS VOO by weight, and if you chose VTI you could drop VO too because VTI has heaps of mid cap. Other than that I'd get a bit more international than just 3%, and maybe start looking at BND or BNDW if you want to be a little more conservative. Some variation of the boglehead 3 fund (US index, International Index, Bond Index; e.g. VTI, VXUS, BNDW in 70:25:5 would make sense for you I think, but assess that yourself) works good for most people.
By "passive income" it sounds like you are looking for dividend income. The folks at r/dividends have answered your questions many times. They will likely recommend relatively stable, non-volatile dividend income ETFs. Just be prepared for the fact that it takes a ton of money to get the monthly dividend income to an amount it can be lived off of, especially with today's rent and home costs. For example, let's say you put it into BNDW, a global bond ETF that has very consistent monthly distributions (you don't want to go all in on just one stock/ETF, but this will just make the math easier): $300,000/$69.29 share price = 4,329 shares. With an .18 distribution for quarters 1-3, that's $779 a month. A bigger distribution for the last month in Q4 (a lot of companies have a bigger payout in Q4) of .85 = $3,769 for December. 11 months of $779 = $8,569 + the December distribution of $3,769 = $12,338 for the year, and that's before taxes. There's much riskier dividend income investments by Roundhill and YieldMax that have higher distributions, some of them weekly instead of monthly or quarterly, but they carry a lot more risk, and most forms of dividend aren't shielded from taxes unless they are in a tax-free retirement account or annuity.
VT and BNDW is your best bet if you want that ZGRO feel in USD without overthinking it No clean all in one match but that mix does the job pretty well
You probably should hire a fee-only advisor tbh, since at your age you’re now dealing with more complexity than you were during the “accumulation” phase. But if you really just want to self manage a set-it-and-forget-it type portfolio, then VT for equities and BNDW for bonds is probably the safest, most diversified, lowest expense ratio option out there for you. I do 120 minus my age to decide my bond allocation, but there are other ways to think about it too. Check out r/bogleheads for more info.
>It seems as though the vanguard bond ETFs are down in value right now (something awful must have happened in 2022!). So it might be a good time to be buying. With bond funds, the NAV tends to be less important than the dividends, which makes charting difficult. But yeah, bond yields were at the lowest they'd been in a long time. And then as rates rise, that drives down the price of existing bonds, so it takes some time for funds to pull in the new ones and recover pricing. Anyways. >Question: I see where they offer a couple of global bond ETFs. Would buying one of these be "two birds with one stone" as far as portfolio diversification? Both a global investment and a bond. Short answer: no. First is that bonds and stocks have some level of uncorrelation (which is good), but that in turn means ex-US bonds are going to behave differently than ex-US stocks. But with a fund like BNDW or BNDX, they're currency hedged. That means they attempt to provide the same results regardless of whether the USD strengthens or weakens, which is good for stability. One of the major diversification benefits of VXUS or similar though is currency: as the dollar weakens, your stock goes up without the companies on the other side changing at all. There are unhedged bond funds too, but then you're not getting bond-like behavior as much as the currency hedge. My personal conclusion when reading through stuff was to not bother and only use US Treasuries for my bond allocation. That's not an unusual stance, but Vanguard and some other providers have decided to include international bonds in their target date funds, and they have smart people. https://www.bogleheads.org/wiki/Developed_market_bonds has some info.
BNDW seems to be quite bad investment, since 2018 the most you can be up until now is a bit over 5% and the most you would have been up if your timing was perfect is a bit over 10%.
Core account: VXUS, VTI, BNDW Fluff: SCHD, SCHY, O, REET, BRK.B, FXE, FXF
I am all in VT and BNDW and Target date fund in my 401K.
BNDW, VTI, VXUS make up the core of my account. For my kid, I hold VT.
You and I are sharing four holdings. Instead of VXUS, I just do VT to cover my bases, and I don't mess with REITs anymore, but otherwise I'm in that same boat holding FXF, FXE, SCHY, and BNDW. I was holding FXY for a bit there, then realized Japan is probably just going to keep printing money, so they'll probably be one of the few countries sure to decline against us.
It's very easy to diversify: VT is the whole world in stocks. BNDW is the whole world in bonds. That's probably enough, but if you want to keep going you can add commodities, cryptocurrency, real estate via a few funds.
I hold the following: * VXUS (ex-US equities passively managed index etf) * BNDW (ex-US bonds passively managed index etf) * REET (ex-US REITS managed index etf, excludes development firms and only includes REITs that hold real estate) * FXE (Synonymous with holding Euros, pays a dividend) * FXF (Synonymous with holding Swiss Francs, no dividend) * SCHY (Schwab international high dividend yield index etf) Out of those, VXUS, BNDW, SCHY are my largest ex-US holdings. The rest represent <2% positions in my portfolio.
Hadn’t heard of this or thought of it. I imagine this is similar to maybe buying different amounts/lengths of CDs? That’s the best thing I could think of. I posted this at ETFs as well and someone there said mix it VT and BNDW. Maybe do that and then also some Treasury bills like you suggest?
Basic etfs. Either S&P index funds (VOO, SPY) or total market index funds (VTI, VT) plus bond funds (BND, BNDW, SGOV, etc.) just depends are your goals and risk tolerance
In and have been in VXUS. Now considering more of BNDW.
VT wraps it all up into one package for you. Add BNDW for bond exposure.
No, it's not going all into bonds - probably a mix of QQQ/SPY/DIA and then BND/BNDW.
I'm going to be moving out of this account and putting it in something else (combination of index funds and BND/BNDW probably) when I retire...in 13 days.
You're welcome! For a little context on the target date fund thing—I'm kind of inferring from your post you have a long time horizon, so if you go with a Vanguard target date fund you'll end up with an allocation pretty similar to what you'd get from 90% VT and 10% BNDW (though I think those funds are strictly market-cap weighted, whereas I think target date funds have a small but nonzero bias towards the US market). The big thing about target date funds though is that as your target date nears, they will automatically shift you towards bonds. Currently, the only target date fund I have is for my son's college savings, but they're kinda nice if you don't want to have to think.
Yup. I movedmy IRA last year to VT and BNDW. Cover the whole world and just sit back. It still sucks, but way less that if just had pure US plays.
Makes sense for IRAs and 401(k)s, but not taxable accounts. You can't get the foreign tax credit with VT and BNDW not ideal for higher income types. IXUS seems better than VXUS for taxable accounts - higher percentage of qualified dividends.
> udn Why not just go VT + BNDW? Then you're world covered.
If I wanted a conservative portfolio I’d do: 50% VT / 50% BNDW
No joke. Systems theory for me... it's like I no joke found "the magic spells", lmao. You seem like you do get it, so I'm just throwing this in the air for randoms. 🙂✨ You will never get real information from a human's opinion, unless they're accidentally running their mouth and saying way more than they're supposed to. People need to understand that once you create *your system*, you follow *your system*. Your system can be anything. I use a specific custom calculation between consolidated scores (sharpe, sortino, etc) to compare everything I ever research to BNDW and VT. I can technically swap the benchmark assets for *anything*, but that's experimental. It's a single excel document. The asset I'm analyzing falls on a scoring system of 1-120 / 1-20. An equity-like asset that exhibits bond-like traits will be above 20 on the second number, and the higher the first number, the more intense the volatility. If its a bond-like asset, the scoring value methodology reverses through IF cells. An bond-like asset with equity-like traits will have a first number above 20, and then the second number will be between 1-120 to indicate a *lack of* volatility. My custom scores are named after video game objects from games I like. The "equity resonance" score is a Mario Power Star, the "bond resonance" score is a Triforce Piece (Zelda). Alternatives are an experimental side project, but right now they trigger a Jiggy (Banjo-Kazooie) score that's intensely difficult to analyze. Literally just math in Microsoft Excel, and yes I make money. "Yeah but who do you-" "Stop. There is no 'who'. You need to develop a *system*".
>i hate it tho because i dont like watching the markets like this all the time I like BNDW which is worldwide exposure to bonds and I think the duration is about 7 years. My opinion on gold/sliver and I can sure be wrong is when/if there is a major market sell-off they will become a source of funds as people sell their winners. The people puking out stocks now and buying gold will probably be puking out metals at that time too.
It sounds like you are market timing and chasing momentum. Which would be fine as far as it goes, however asking even well meaning strangers on a random subreddit isn't. Set up a four fund portfolio since you want metal exposure. VTI, VXUS, BNDW, and CEF. 25% in each and rebalance to that allocation once a year. Other than this yearly check-in forget the market and enjoy your travels.
That's why global bond funds and ex-US bonds funds exist. The average person can buy them. Personally, I am slowly increasing my holdings in these as central banks may face different problems, so may not operate lockstep as normal. I may lose out on some yield, but that tends to be the case when one diversifies away from different risk scenarios. What seems very risky is only investing in the USA assets. For example, equities. people have gotten lazy and greedy with around 20 years of USA over- performance to the extent that USA is running 33 or so P/E Cape, developed is around early 20s, and EM is cheapish (nothing is cheap cheap, except some value plays). I can tell you that we will have a period of sustained over performance of international over USA, and probably a sharp decline in USA equities, I just can't tell you when. The odds of 2025 went up because Trump is a maniac at trade policy. So diversify holdings or vow to ride the US market down. We're probably not Japan. Probably. TLDR: VT instead of VTI, BNDW instead of BND, at least while we have uncertainty due to political risk in the USA.
I would consider some international exposure - something like VT or a VTI/VXUS mixture is worth considering, for better diversification. Both VOO and SCHD are US-only, not to mention that they are both overweighting large-cap stocks. You might also want bond funds like BND or BNDW, to hedge against a severe market downturn. Check out [this page](https://www.bogleheads.org/wiki/Three-fund_portfolio) on the Bogleheads website, is has some good ideas for easy three-fund portfolios.
Open a fidelity account. Buy VT and BNDW. Take the number 120 and subtract your age. If the result is less than 100, that is the percent of your portfolio to put in VT. The remainder goes into BNDW. That's a single.ple 2 fund portfolio that covers more or less all the equities in the world, and all the bond markets in the world. It's a decent starting point for you while you learn more about how markets work.
If you had a portfolio of 70% VT and 30% BNDW you could sell some of your BNDW if you needed capital, then over time, DCA would transfer your VT to DNDW as markets recovered.
BND - US bond market BNDX - ex-us bond market BNDW - us + ex-us bond market The big catch here is bond funds don't quite work the same as buying actual bonds since they usually have a set holding time for bonds.
* **Age & Location:** 29, GA, USA * **Income & Employment:** Employed, $100k * **Objective:** Retirement with a strict "set it and forget it" approach * **Time Horizon:** 35-40 years * **Risk Tolerance:** Moderate to high—I don’t mind volatility as long as I can outpace inflation (aiming for 6-10%+ annual returns) * **Current Holdings (Personal Brokerage):** * VOO – 30% * VXUS – 25% * BNDW – 20% * QQQM – 11% * SCHD – 10% * **Debt:** Only a new car loan from Nov 2024, 3.2% APR * **401(k) Situation:** Company has no consistent match (owner matches when he feels like it—2 out of the last 5 years). I contribute 6% in case he does. We do receive yearly profit-sharing contributions. * **Roth IRA:** Have not focused on contributing due to life circumstances, but now looking to start. # Question: I’m planning to open a Fidelity account and was considering investing only in **FXAIX (S&P 500 Index) and SCHD (dividend ETF).** Would this be a reasonable strategy given my existing personal brokerage holdings? Additionally, if there are any changes I should consider for my personal brokerage allocation, I’m open to feedback.
I don't know why this BNDW is always in play apart from it being a part of a 3-fund portfolio or just b/c it's Vanguard. Look at its 1/3/5/Life performance splits. There's much better bond funds out there IMO.
If VT averages 10%/year and BNDW averages 5%/year, then it becomes difficult for 100% VT to lose. It's not theoretically impossible... but it becomes difficult. I'm sure someone can data mine a time period where it happened.
> Whenever VT increases, you sell and add to BNDW, increasing your cash wealth. Conversely, you sell BNDW and buy VT when VT goes down, using your cash wealth to take a position in equities. Basically, you’re buying low and selling high. This right here is called "Timing the market" and generally speaking, that's not something people can do.
Invest in a 3-fund portfolio according to r/Bogleheads philosophy. Ignore dividend stocks (they don't have a higher expected return than non-dividend stocks). Instead, you should seek a U.S. broad-market index fund, a non-U.S. broad-market index fund, and a bond fund. You can simplify this by investing in VT + BND (or BNDW). You can simplify this even further by investing only in a target-date retirement fund. If your investments are outside of a 401k or other retirement account you will pay income taxes on any dividends (usually paid quarterly), and capital gains taxes on any sales of the fund(s). Also, target-date retirement funds aren't typically recommended in taxable accounts, because they can sometimes have very large distributions (which have heavy tax consequences).
VT is good. BNDW if you want all the bonds too.
Buying individual stocks is an unrewarded risk, I would buy smallcap value like AVUV/AVDV if I wanted a high risk/reward, and would buy 40% BNDW/60% VT if I wanted more stability.
Broad, low fee index fund like VTI or VT. Add bonds like BNDW if that is too much risk (stock indices can drop 50+ in a crash but return more long term).
Adding to this: Sharpe expanded on Markowitz and Tobin to show that under certain assumptions (CAPM), a market weighted portfolio of risky assets is the optimal portfolio on the frontier. Combinations of risk free asset with the market portfolio allows tailoring a personal portfolio for different risk tolerances. People with high risk tolerance (i.e. would want something riskier than 100% market portfolio) can use leveraged market portfolios. Investible assets includes bonds, which is one reason why 60-40 portfolio of something like VT and BNDW is popular. The true Sharpe market portfolio would change proportions to market weights (not fixed 60-40) and include all world investible asset classes including stocks, bonds, risky government treasuries, real estate, arguably crypto, etc. Any good graduate/MBA finance textbook would run through a toy model and discuss assumptions, strengths, and practical weaknesses of the academic definition of diversification.
Real talk that you're not going to want to hear: it's a mindset thing. Look at this: https://testfol.io/?s=lox6hjjseLJ That's what 60% VT, 40% BNDW did over the last 6 years if you started with literally $20 and added only $5 per week, never budged an inch. No thought. No attempt to beat the market. Just setting it up and forgetting it exists. ChatGPT is allowed to tell you to do this while practically framing it as investment advice. It's not impossible for you, you just haven't stood up against the nihilistic apocalypse thinking that we're all raised on. Get started. Screw maxing anything. Screw what work offers or doesn't. Do exactly what you can, nothing more, and to hell with whether it "matters". Open a Roth IRA through Vanguard, Fidelity, or Schwab right now. It takes less time and effort than it would take to reply to this post. Start putting away what you can afford to put away, minimum $20 to start and $5 a week. You *can* do that absolute bare minimum, and no one believes you when you say you can't. It's not impossible and it's not hard. We're just not educated about it in the school system, which makes it an uphill battle. We're not educated about Batman lore in the school system either, but if one wants to know it, they will learn it. Go to one of the big three sites, click "open am account", pick Roth IRA, set it up to drip $5/week into VT and BNDW, and then don't think about it ever again unless you can add more money. It is not hard. This is tough love. Just get started and stop whining.
Diversification in bonds has some of the same benefits as diversification in equities, which is why the ETFs BND and BNDW are common choices for a bond position. A T-bill ladder is also a good option. But your Uncle needs to have reasonable expectations. Bonds and equities are always partially correlated in any contraction and always will be. There is no such thing as a perfect hedge. The 2022 drop was unusually brutal, but T-bills got hit hard also.
You could just do the Schwab index Target Date Funds. It's mostly stocks early on and then leans into fixed income later on. Or you could do 80-100% VT (world index fund) and 0-20% BND for US bonds or BNDW for world bonds. AOA and AVDE are examples of a low cost all in fund that don't change their allocation over time. AOA is 80% global stocks and 20% bonds straight up and forever. AVDE is a small cap value tilted fund of funds but mostly sticks to the low-cost broad market exposure with that factor tilt. Factor exposure is a whole other can of worms that may or may not be worth getting into. Or you could just stick with the robo advisor, that's likely going to do OK, basically the same thing you should be doing anyway but 8% cash is kind of high for a retirement account especially with so long to compound. Any of these options highlights varying degrees of simplicity and automation, but I like them because , and to be honest, for most people, the more simple the method, the better. Less likely to tinker and make active choices/mistakes if whatever you have is mostly set it and forget it.
Step 1: choose solid investments. Investments, that are going to stay relative t for (20 years/30 years/40 years/the longer = the better). It is wiser and safer to invest in (solid ETFs or solid mutual funds), rather than just in “individual companies.” Step 2: If you want a good stock portfolio. It is good to have a mixture of (equities + bonds). Or, (common shares + bond shares). —>Common shares = associated with maximizing capital appreciation(aka: unrealized gains). It is also associated with “a lower dividend yield.” Like 2%. Still good. Common shares that offer a VERY HIGH dividend yield, may not be solid investments. —>Bond shares = associated with (moderate to above moderate dividend yield). It largely depends on “what types of bond grades that you invest in.” Bonds are valuable because they are essentially (debt assets). Think about: “How do banks mainly make a profit.” Banks mainly make a profit “from debt.” If you hold certain high grade bonds, bond holders get to receive a percentage “from that debt.” —Common shares = 1st ones to cut their dividends during (minor bear market cycles + moderate bear market cycles + major bear market cycles). —Preferred shares = 2nd ones to cut their dividends during (minor bear market cycles + moderate bear market cycles + major bear market cycles). It mainly depends on the entities (cash flow). I would prefer (common shares + bond shares), over (preferred shares). —Bond shares = 3rd ones to cut their dividends during (minor bear market cycles + moderate bear market cycles + major bear market cycles). Or, (bond shares) may never cut their dividends because “of what bonds are.” (Bonds/bond shares) are essentially DEBT ASSETS. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Very safe ETFs, that you can invest in for the long term: —>VTI ETF= total US stock market = 100% common shares of companies. —>VT ETF= total world stock market = (65% US equities + 35% international equities). It has the option of allocating a higher percentage “to US equities” or “international equities” — if one were to be experiencing significant turmoil. —>VOO ETF= top 500 US companies. All (large caps + mega caps). Offers not as much diversity compared to (VTI or VT). —>You could also ask ChatGPT, what the (Fidelity ETF equivalents of “VT + VTI + VOO are.” If you are investing on (Fidelity platform), then investing in Fidelity ETFs — could mean “having to pay 0% trading fees.” —>BND ETF = total US bond market. Of a diverse range of “good bond grades.” —>BNDX ETF = total international bond market. Excludes US bonds. Of a diverse range of “good bond grades.” —>BNDW ETF = total world bond market. PS: Remember as to why I said “bonds were valuable for a certain reason.” __________________ Now, if you invest in Mutual Funds — a very very very solid investment would be: —>VBIAX = (total US stock market + total US bond market). This is the Vanguard version. PS: Make sure that you are able to purchase (partial shares) — of ETFs or Mutual Funds
> I rolled over about $10k from a previous 401k to a vanguard rollover IRA. It’s sitting in the money market fund right now because I’m at a loss as to how to re-invest since the market is so high right now. We invest in the stock market because we expect it to go up. That means the stock market is often at or near all-time highs. Otherwise what would be the point? The price today could very well be the lowest it will ever be. > I also have a ROTH IRA I contribute to which is mostly made up of VTSAX plus some VEU and BNDW. This is basically a Bogleheads three-fund portfolio. You would be fine doing similar or identical allocations in your Rollover IRA. Personally I don't recommend holding bonds in a Roth account since you want your highest growth assets there. Consider shifting some or all of your bonds from the Roth IRA to the Rollover IRA. > Would you suggest weekly increments ? It was presumably already invested in your 401(k). Personally I would get it back into the market ASAP without any further delay.
You have several options for bonds and there’s no right answer. BNDW holds investment grade bonds from all the world. BND and just from the US. GOVT holds just US Treasuries, which should have zero risk of default. Any of those options should be fine.
Yeah, the ol'classic. Just shove a bunch of seemingly random stuff into a portfolio to make it look complicated (but that will underperform relative to the market). Of the ones here though I'd trim everything except: Microsoft Corp (MSFT) Coca-Cola (KO) Schwab US Dividend Equity ETF (SCHD) Vanguard Total World Bond ETF (BNDW) Then I'd simply add something like VOO/VTI and VXUS(for a sprinkle of international) and call it a day. Something like 55% VOO or VTI 20% VXUS 10% SCHD 10% BNDW 2.5% MSFT 2.5% KO
60/40 VT/BNDW and retire. I might give 500k to my mom, 2M is a bit too much for me
Adding ETFs does not equal diversification For example investing in IVV then adding in QQQ makes you less diverse , because everything in QQQ is in IVV so you are concentrating your positions to mainly large cap tech Honestly the simple and diverse portfolio would be VT/ BND (or BNDW) If you want to add gold you can, I am not a fan personally but adding 10% might add a bit of stability . I personally wouldn't add real estate because well all those companies are in VT , and even non REIT companies own real estate , and you might too if you own a home
Yea. VT + BNDW is pretty much as diversified as you can get. It’s essentially the free float market cap weighted portfolio.
Sure, throw in some BNDW if you like
Caught up means catching up to some benchmark. That depends on your risk tolerance and is kind of subjective but you might do something like 80% VT 20% BNDW, or you might use inflation like you mentioned above. If you do a benchmark index portfolio, you would need to make a hypothetical series of money weighted returns as if you had invested whatever money you have available in that. I track deposits and withdrawals monthly for simplicity. If you only had a lump sum available, it's easier to calculate, and yes your calculation sounds correct. If you have saved money over time it gets a little harder.
Reminder that this is also easily replicated by just using VT+BNDW, with the added benefit that it automatically rebalances across the globe based on market weights. Only thing you have to manage is the stocks to bond ratio.
Honestly I don't have a diverse portfolio, it's heavily biased toward US growth. If I were trying to build the most diverse portfolio from 4 ETF's I think it would be something like the following: VT: Market cap weighted global equities BNDW: Float weighted global bonds (corporate, sovereign, fixed income securities) DBMF: Managed futures (commodities trend following) fund. Captures commodity trend following returns and offers unique correlation to equity and bond markets. Difficult to choose the last fund. GLD would be a classic portfolio diversifier, BTC might be a modern contender for an aggressive investor. If you live in the US, TIPS might be a good conservative option to protect against unexpected inflation, but it's painful for me to allocate too much to something with such low expected returns.
I am a buy and hold investor with a long horizon. I own mostly index ETFs. I have all set to be loanable. In the two or so years it has been enabled on my account, there was a single time shares were loaned. It was about 300 shares of BNDW for a couple days, and it made me $12. You don't lose the shares or any rights from the shares while they are borrowed. You still get dividends, splits, etc. The more volatile the stock is, and the more popular it is, the less likely Fidelity is to have floating shares in their possession to meet needs for borrowers. So they borrow from people with loaning until they acquire more (assuming they can remain risk neutral) and they pay you for the time they borrow them. It's pretty much transparent other than you'll see some weird ledger entries show up briefly.
You are viewing bndw returns since it's inception in 09/2018. During that period (2021-22) bonds experienced their worst drawdown in 100 years. BND has 2.88% since 2007 and is very similar in returns to BNDW. Over 3yrs bndw lost -2.5% and bnd lost -3% thanks to bndw having the extra foreign corporate and government bonds as a diversifier.
Can you elaborate on investing in BNDW? I checked the historical returns since I had never heard of that and it seems to be around 1%. Why invest in that over a HYSA or MMA?
Yes basically. Risk tolerance is personal. The stock market fell a bit over 50% in 2008 and it probably will again at some point. If you are okay losing that much, then all stocks is appropriate. If not, mix in more bonds. Global equity index: VT, or sliced up domestic VTI and foreign VXUS Factor titled equities: VFMF CAPE IMTM FNDF Bond indexes: BNDW SCHP
money for yr 0-1: 100% high yield FDIC account money for yr 1-3: 100% BNDW money for yr 3-6: 20% VT, 80% BNDW. money for yr 6-10: 40% VT, 60% BNDW. money for yr 10+: 90% VT, 10% EDV. And I guess, redo this every 2-5 years.
I keep it simple...a Bogleheads 2 etf fund is all I need, VT 85% and 15% BNDW .
Seems overly complicated. You could literally just buy VT and BNDW and capture all this. Based on your 401K choices (and depending on your age), which normally aren't great, I'd prob do: 60% US (SP500/Total Market) 25-30% International 10-15% Bonds For reference my 401K is 80% VFIAX(SP500) and 20% VTIAX(All Int) and I'm happy with that. No bonds, I'm too young. Got a list of funds you can pick from?
VT + BNDW It only takes those two funds if you want to own the world. Anything beyond those two funds just adds a tilt toward a certain sector or factor. My own portfolio is VTI + VXUS + BND (not BNDW) but that's essentially the same result but without the ex-US debt allocation. The case for international bonds is less convincing than the case for international equities and my personal preference is BND, but reasonable minds differ on their approaches to bond allocation and BNDW gives you the global debt market, currency-hedged to the Dollar. Retail investors do well to avoid any international bond fund that is not currency hedged: Currency risk would often wipe out any marginal yield over just holding BND.
Yes you're overthinking things. 1. Invest in VT 2. Invest in some bond fund (BND/BNDW) Then wait a really, really long time.
I use fidelity. The two times I have had shares lended out, it was a few hundred shares of BNDW. It was an easy $14. Just realize most ETFs don't have the volatility to really see much need for lending.
At your age, no reason to keep cash outside of what you might need for emergencies or general life need. If you want to take advantage of high rates right now though, you may want to consider putting that portion in a diversified bond fund (like BNDW) and you will get price appreciation when rates go down on top of the yield now.
I think you’re better off buying VT. Lol. If u wanna be risky u can sprinkle in some QQQM and maybe SOXQ if u wanna be exposed to semis. It’s underrated but I added some money to BNDW for stability recently because if they cut rates bonds tend to rise. Always good to have a little bonds as a buffer in case there’s a downturn
I make everything I have available for lending. The first time it was actually used was for a few hundred shares of BNDW. I earned about $20 in interest. Not bad for no effort.
Zero crypto, it is gambling, not an investment. Best bet is to through as much money as possible into index funds like VTI or VT and bonds (BND / BNDW).
> Read up on Bogleheads three fund portfolio or target retirement date fund. With VT and BNDW you can now have an extremely well diversified portfolio with only two tickers. Iirc they didn't come out until a few years ago when the concept of a 3 fund portfolio was already out there.