Gyroscopic Investing

I'm curious what others think of Tyler's suggestion of VWINX? I don't know much about that fund but I have seen a lot of you post good things about it in other threads. Looks like it was down 25% or so in the crash of 2008, so not as bad as a straight equity fund. I just mention that because Neo16 was so spooked by that experience (most of us were).

Also, how likely is it that the 3% yield will continue going forward in such a low-rate environment? If she got a 3% yield on the bulk of mom's savings, that would supplement the SS earnings nicely, and with one fund she wouldn't have much to learn. Once we have implemented the PP we look at it as rather simple concept, but it's easy to forget that two assets (gold and LTTs) are rather foreign to most investors.

Neo16, my suggestion to try to preserve as much of the principal as possible is based on seeing what it cost my dad to make it through the last six years of his life (ages 90-96) even with an incredibly good health insurance policy from his WWII service. He was in an extremely basic assisted-living facility - his decision, not ours - and it ran him roughly $4,000 a month. That's about $296,000 for the last 74 months of his life. Fortunately he had SS, an army pension and another pension so he was OK. But even with all that income he had maybe $20,000 left at the end.

Barrett, I know how expensive nursing homes are.  My dad was is one for a very short time prior to his death.  He was only there for about a month but the bills were just outrageous... although he did have a private room which was needed because he entered with a MRSA infection contracted at either the rehab facility he was in or the last hospital visit.

He didn't have any long term care because his cardiologist sincerely doubted he would ever need it due to his heart condition.  The odds were that he would just suffer a major attack and not wake up one morning.  This is how his one brother went.  Healthy as a horse one day and the next day gone.  In fact, my parents had just taken him out for dinner the night before. 

However, he didn't die from a heart attack. 

My mother does have long term care and my dad took out a policy on her right before she turned 70.  The decision on this came, again, after a discussion between my parents and Dad's cardiologist and her primary care doctor.  Her policy provides for in home health care, or in a facility, but I really do need to check it out and see where things stand on that.  I know her policy doesn't totally cover daily room rates.

If genetics mean anything, both of her parents went suddenly due to heart attacks... her mom in her early 80's and her dad just about 80... I can't recall his exact age.  My grandfather was a prisoner of war during WW2 in Russia and that took a huge toll on his health. 

I hope that Mom goes the way of her parents... heck, I hope I go like that, too.  Much preferred to spending your days losing your mind and body where you're dependent on someone to take care of you.  Not for me.

At any rate, her premiums for the long term care are hefty and they keep increasing them.  But, I've been wondering if, at some point, the law of diminishing returns comes into play with her?  I mean, the longer she is able to live alone, is healthy and able to take care of herself (and her kitty), then ism't the insurance company winning here? 

She says she wants to leave us girls something, so it's important to her to try to maintain as much of her money as possible.  I've told her that she shouldn't worry about that and that we will get what we get and be happy with it.  After all, it's her money that my dad worked his butt off to make.

barrett wrote: I'm curious what others think of Tyler's suggestion of VWINX? I don't know much about that fund but I have seen a lot of you post good things about it in other threads. Looks like it was down 25% or so in the crash of 2008, so not as bad as a straight equity fund. I just mention that because Neo16 was so spooked by that experience (most of us were).

Hi Barrett, actually VWINX only ended down -9.84% in 2008.  A lot of folks here like VWINX because it compliments the PP well.  I keep 35% of my portfolio in VWINX:  http://www.tightwadweb.com/customportfolio.html

-Ozzy

I wasn't clear on that, Ozzy. Here is what I am looking at:

http://www.google.com/#q=VWINX

Looks like it bottomed out in March of 2009, most likely along with everything else. My point was that it held up better than a lot of funds and was therefore less traumatic to hold. Total drop was from $22 something to $16 something.

I am curious for the purposes of income how the yield held up during that period. Anyone remember? Did it actually go up as share price declined?

Thanks for posting the Juicy Portfolio link.

TennPaGa,

Thanks for posting those VWINX yield numbers. How is that the yield is going up in 2012 and 2013? I guess my question is what bonds are they holding? Or is that the wrong question?

I have to say that I am very impressed

Not trying to derail the thread but I was just looking at this:

https://finance.yahoo.com/q/hl?s=VWINX+Holdings

Are the fund managers just really good at buying high-quality, low-rated bonds along with dividend stocks? Some of those bonds look sketchy if you are just looking at the ratings, no?

I have a kind of homemade Wellesley within my vp. ~ 60 dividend paying stocks and some bonds, although no mortgage stuff.

My bad. I didn't realize how much VWINX had been discussed elsewhere on this forum. Carry on!

VWIAX are the Admiral shares version of VWINX and has an expense ratio of only 0.18%, fantastically low for an actively managed fund of this caliber. VWINX are the Investor shares and carry an expense ration of 0.25%, still fantastic. I believe that to get the Admiral shares of Wellesley requires a minimum investment of 50 G's.

Wellesley also throws off a rather large dividend and works best in a tax deferred account.