Why The Vanguard Wellington Fund is the Only Investment You Need For Retirement

Vanguard Wellington Fund

How many times have you heard people say “stop trying to beat the market!”  Have you listened?  How often do you hear the term “asset allocation?”  Do you listen?  What about the word “diversify.”  I’m sure you’ve heard the term “index fund” have you not?  The reality is that all of us are freaked out (and in reality for no reason other than we’re mentally trained to be freaked out) about our retirements.  How much will I need?  How much do I need to put away?  And most importantly, where do I put my money?  But if you’re like me, you might ask yourself a question like this:  “Can’t I just put away my money into something that will earn 5-7% a year and pay me dividends?  Something that won’t be too volatile?  Something I can just count on?”  What’s funny is that we’re made to believe that in order to achieve that we need some amazingly crazy mixed bag of stocks, bonds, FX currency, commodities, foreign investments, real estate, and the list goes on.

The reality and one constant we all strive for in investing has always been (at least for me), consistency.  We want something we can rely on in the short term and even long term.   We know money markets pay nothing.  Individually picking stocks is always a losing proposition.   Index funds are the right way to go but people always seem to get greedy.  So today I’m going to talk about one fund, just one fund that I personally own and will be the ONLY fund I own well into my retirement.  It’s the Wellington Fund from Vanguard (VWELX).  I personally own the admiral shares which you can have once you’ve reached $50,000.  The admiral fund has an expense ratio of .18% to Wellington’s standard fund at .27%.   Let me explain why I’m never getting rid of the fund in three reasons.

It’s incredibly boring, old, and consistent

These words are music to my ears.  I want boring.  I want a fund with a history (try the 1920s) and I certainly want consistent.  Wellington has never had a huge drop year (never more than 20%) and it’s never had a crazy blowout year either.  But one thing it’s done?  Make its investors money.  It’s averaged over a 7% return since it’s inception.    Frankly I don’t care if I have a blowout year.   It means nothing to me to gain 50% if I’m going to lose 70%.  I don’t have that kind of risk tolerance.  Just give me SOMETHING.  And 5-7% is something, something that builds quite well over time.

Covers all diversification in one shot

People worry so much about diversification when they really just ought to go with consistency and “boring.”  But if you want diversity the Wellington Fund has it.  65% stocks and 35% bonds.  A very “safe” split to any financial expert.  10% of its stocks are foreign.  Some might argue that’s too small an allocation but realistically we’ve got some foreign in there period so that’s a good thing.  Plus the TYPES of stocks in the portfolio offset the non foreign risk.  The largest holdings are, you guessed it, blue chip dividend payers.  The cream of the crop.  Companies with incredibly good credit, history of paying dividends, and business models that should stand the test of time.  Does Wellington hold commodities and foreign currency?  No.  Do I care?   No.  Not even remotely.  It’s one less thing to worry about.   There’s plenty in there that protects me from huge risk.

The Yield

If you own the admiral you’re currently getting a very respectable 2.56% annual yield on dividends which are paid quarterly. So if you have $100,000 you get $2,500 a year for basically doing nothing.  I simply reinvest my dividends so my payouts get larger and larger.

And honestly folks, that’s it.  The stock market and the financial industry as a whole is one big con.  99% of it is sales and hype.  It’s people trying to get you to do this and that so they can make a commission and scare you into buying more.  How many times do you have to hear that’s all garbage?  You want consistency?  You want to just sit back and not worry?  Drop your money into the Vanguard Wellington Fund and stop worrying.  Seriously, stop.


Add Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

NextCure
20 Things You Didn’t Know about NextCure
Nick Vujicic
20 Things You Didn’t Know About Nick Vujicic
David Oyedepo
How David Oyedepo Achieved a Net Worth of $150 Million
Jack Ma
The 10 Richest People in China in 2019
Navy Federal Credit Card
The 10 Best Credit Cards for Military Members
cryptocurrency
The 10 Most Valuable Cryptocurrencies in the World
The 10 Best Credit Cards for Small Businesses
Honeywell
Why Honeywell International is a Solid Long-Term Dividend Stock
Tablets
The 20 Best Tablets in 2019
airplane technologies
The 10 Best Airplane Technologies of 2019
This is the Reason Why Graphics Cards are So Expensive
Antivirus Programs
The 10 Best Antivirus Software Programs of 2019
MSC Cruises
The 10 Worst Cruise Lines in the World in 2019
tornado 8
The 20 Worst Tornadoes in World History
The Burj Al Arab
The Five Most Expensive Hotels in Dubai in 2019
Bel Air Treehouse
12 Reasons to Stay at the Treehouse, Bel Air in Los Angeles
 1970 AMC Gremlin
The 20 Worst Car Models Ever, and We Mean Ever
2020 Hyundai Tucson
The 20 Best Small SUVs Heading into 2020
2019 Rolls Royce Cullinan - $325,000
The 20 Most Expensive SUVs of All-Time
20 Best Midsize SUV's
The 20 Best Midsize SUV’s Heading into 2020
A Closer Look at the Hublot Bigger Bang
IWC Big Pilot's Watch Constant-Force Tourbillon Edition Le Petit Prince
A Closer Look at the IWC Big Pilot’s Watch Constant-Force Tourbillon Edition Le Petit Prince
A Closer Look at the Jaeger-LeCoultre Master Ultra Thin Tourbillon
Time Traveling: The Hublot Classic Fusion Zirconium