For the person who can handle the slow and steady road to wealth, the importance of a balanced portfolio cannot be overstated.
In 2011, I coined the phrase “Sleep Well-esley at Night” to capture the safety first, survivalist manner of the balanced Vanguard Wellesley fund.
It’s not an exciting fund. After all, close to two-thirds of the Vanguard Wellesley fund is in bonds. The rest is in stocks. The fund’s performance over time is a testament to the power of a balanced portfolio.
You can see in the chart above that during Vanguard Wellesley’s long performance history, the fund has had a big bounce back after nearly every year of decline, with only one instance of two consecutive down years in history.
Action Line: A balanced portfolio is important, but I still encourage investors to be the owners of their own securities and to mostly eschew mutual funds. If you need help building a balanced portfolio of individual stocks and bonds, let’s talk.
E.J. Smith - Your Survival Guy
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