I’ve been in the market with my retirement accounts for almost a decade now and I currently have a 0% return on them (actually down $5k). It would have been better to let them sit in an HYSA for the past decade.
My only funds are indicies and treasuries. VTSAX, VTIAX, VGSLX, and VUSTX specifically.
Am I doing something wrong here? I know the saying “time in the market is better than timing the market” but it’s still disheartening to see a 0% return after a decade of investing huge amounts of personal income in hopes of having a solid retirement fund.
No, the economy is. At least you recovered.
Just gotta wait for the quantitative easing to engage again
I literally don’t know what that is. I just comment on random new posts to make Lemmy feel more alive.
https://en.wikipedia.org/wiki/Quantitative_easing
Quantitative easing (QE) is a monetary policy action where a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity.[1] Quantitative easing is a novel form of monetary policy that came into wide application after the financial crisis of 2007–2008.[2][3] It is used to mitigate an economic recession when inflation is very low or negative, making standard monetary policy ineffective.
I hope that helps.
Had you checked it in September of ‘21 you’d be extatic.
Markets are a bit shit right now. I’d leave it and wait until it bounces back.
The only thing that really matters is the value the day you sell.If you NEED a certain amount for retirement, consider selling some if it when it reaches an acceptable level and place it into a high interest account with low risk.
If the rest goes up, well you’ll be fine but it sucks. If it goes down, you’re better of in retirement.Yeah, I’m definitely not planning on taking it out. I still have a long way to go before retirement. I was more concerned about if I’m investing into the right funds and if my returns were anomalous for the given time period.
My first guess is that most of your additions have been relatively recent. When I look for the Covid spike, around March 2020, there’s a little bit, but it’s not the 3-year setback that most funds had. Your gains Covid-2021 are 4x your Covid drop, where VTSAX was only around 3x. If your purchases are weighted to 2020-and-after, then the 2022 downturn will have exaggerated effect. International market has had much worse time in the lead-up and aftermath of Ukraine, so if you’re more heavily weighted in VTIAX, this may further exaggerate the recent weakness.
Time in the market is important, but if you’re adding $100 invested in 2014 that’s worth $200 now to $1000 invested in 2021 that’s worth $870 now, the net effect is that you have $30 loss and approximately 0% rate of return.
Yeah that’s a good point. My recent contributions were certainly focused around mid 2020 - mid 2021. I’m at roughly 70% VTSAX, and then 10% each VTIAX, VGSLX, and VUSTX.
VGSLX was certainly hit hard by COVID and the shift to remote work, and high interest rates have also impacted the value of VUSTX.
So all the gains you would have seen from VTSAX and VTIAX were counteracted by the underperformance of the other funds. I personally don’t see the value of being overweight in REITs as they are already represented by their market value in VTSAX. You may want to consider the proportions at which you allocate your money to the various funds.
Edit: So I went in to compare your results to mine. I started investing in Jan of 2015. I keep roughly 60% of my money in VTSAX, 25% in VTIAX, and 15% in VBTLX. According to Vanguard, I am up 6.2% since I opened my account.
Do you think it’s worth cutting losses in VGSLX and reinvesting in VTSAX? I guess it depends on how much prolonged high interest rates are going to continue to weigh on the real estate sector.
I think it depends on what you want your investment philosophy to be going forward. So you would want to answer why did you initially choose to be overweight in REITs? Do you still agree with whatever that reason is?
Another thing to consider, if you had $xxx in cash today (where xxx is what your current value is in VGSLX) would you buy VGSLX with that cash? Or would you choose to buy VTSAX instead? If the latter, then yes it would be worth cutting your losses.
It has honestly been a while since I rebalanced anything so I’m due for that, but I believe my thinking pre-covid was that I didn’t see many avenues where real estate would not continue to increase (you can’t make more land after all and it’s so damn difficult to build anything new in the US). Of course, no one was expecting a global pandemic.
That’s a good question though, I think the same underlying problems with lack of real estate exists over the long term so buying it now when the market is down seems like buying the dip, but interest rates are the wildcard here. If the fed wants to force high mortgage rates to slow down the market then it becomes “don’t fight the fed” and all that.
Was this a one time investment or have you continued to contribute over this time?
Ongoing, I max out my retirement funds every year.
S&P500 in November 2014 was approx. $2045 S&P500 as of today is $4308
I can see why after a decade, the results of your investment strategy are disheartening. As others have pointed out, your returns up until recently were much larger, so the time you took this screenshot plays an important role. However, to be negative from where you started ($0) doesn’t make sense compared to the broader market.
Does this include dividends?
I think so? It’s the performance chart from Vanguard.
What is your breakdown per fund? Look at the performance of each one.
Ideally you should simplify to a 3-fund with appropriate allocations or just a target date fund.
It’s split across a few accounts so it’s difficult to put a single, exact percentage on, but I’m at roughly 70% VTSAX, and then 10% each VTIAX, VGSLX, and VUSTX.
I’ve shied away from target date funds because I’ve wanted to have more control over the underlying allocations (potentially to my own detriment, I’ll accept responsibility for that).
That’s hard to comprehend, since vtsax is up about 100% since 2014. Did the other funds really perform that badly?
