Vanguard REIT Fund (VGSIX 2001-2017)
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- Опубликовано: 3 янв 2019
- Vanguard's REIT fund (VGSIX) has a place in your portfolio. Not for the entirety, of course, but as a great way to diversify.
We'll dive into using VGSIX as a PART of your portfolio in other videos but for this one we show you how it did with a 5% annual withdrawal each year going back to 2001.
I like where you are going
funny thing is, as I do these I am learning from my own number crunching. I don't know the end result yet, but I have a sneaky suspicion it's going to be a whole lot different than what I thought when I started this exercise.
The first time I heard the word "subprime" was on Feb 10, 2007. I knew that the **** was going to hit the fan. I bought VGSIX in 2003 in my Roth, and through 07, I would pull out some money each year because of the rapid increases. I sold in 2011.
Man, that's funny. I remember when I was in banking back in 2003 or so. I was a branch manager and my boss, the area executive was DESPERATE for us to do a mortgage to a "non-traditional" borrower. We had to in order to meet the COmmunity Reinvestment Act.
My boss was desperate because if we didn't meet CRA we wouldn't be able to build additional branches. Now, we were in the Shenandoah Valley so there weren't many "non-traditional" Borrowers to begin with.
Lots of undocumented laborers at the local poultry plant. (Do NOT get me started how illegal immigration only fills jobs Americans won't do! Complete, 100% Bullcrap!"
Anyway, so us various branch managers were sitting around the table wondering how to get a non-traditional borrower. The boss chimed in and basically said "Grab one off the street, even if he can't qualify. We'll qualify him."
I imagine it was like that at many other banks too. And thus, the advent of the NINJA loans. No Income, No Job, Assets.
@@HeritageWealthPlanning My lifelong dream was always to work in a poultry plant. :) Yeah, lots of phoney loans back then. The loan originators didn't care because they just sent the loans elsewhere. I saw tv ads all the time and was shaking my head.
I'm new to investing but had a simple question. Why are you withdrawing 5% out of the account annually? If you left it in, wouldn't you get the advantage of compound interest?
Just to show what happened during the distribution phase
It's closed to new investors. However VGSLX (admiral shares) is open
Even better!
New to investing. Is there a difference in expense in VGSLX (mutual fund) vs. VNQ (ETF). Both are listed as having a 0.12% expense ratio, I didnt know if there were additional expenses on the mutual fund or not. Just curious cause VGLSX has min. investment of $3,000, while VNG does not. Just trying to see if one is superior to the other.
I wouldn’t sweat it Dylan. At that low fee iyou will be fine either way
@@HeritageWealthPlanning Thanks for the reply. I noticed Vanguard had a calculator online to compare the fees for each. Over 30 years with investing $2,000 in each year, the VGSLX was only about $7 cheaper TOTAL over 30 years. So, yes no big difference
Josh - The REIT is a great choice. IMHO you are missing international or emerging markets.
Question. Why are you using mutual funds instead of ETFs. For S&P, VOO, for Total Stock Market VTI, and so forth. ETFs have the same of similar performance at about 0.10 less fee.
Of course, we are not including Wellesley or Wellington or other active managed funds but for index, there are equivalent ETFs.
Agreed. I'm buying the Vanguard ETFs now rather than the mutual funds.
My guess would be alot of ETFS did not exists back to 2000 so the analysis would be shortened and not reflect the 2 bear market/ corrections he is trying to illustrate.
@@RetireWithLess Good point. Perhaps for illustration purposes....
@@jenniferg3251 Me too but using the Wellesby(?) mutual fund as value stable core position.
100% correct, Gerry. There were very few ETFs back in the start of the 2000s. In fact, bond ETFs have only been around for around 10 yrs or so.