When the financial crisis destroyed the stock market in 2008, guess which fund weathered the storm? You guessed it Vanguard GNMA.
When the tech bust destroyed the stock market at the beginning of this century, guess which fund weathered the storm? Right again, Vanguard GNMA.
That’s two huge busts in the stock market so far this century. Many mutual funds focus on 10-year performance. As 2018 moves forward into 2019, the brutal losses of 2008 will be rolled off, and investors may not see the risk inherent in stock funds as they make their allocation decisions. But a retirement lasts longer than 10 years.
With a 20 year retirement plan in mind, study this chart for GNMA so far this century and you’ll see what it’s like to invest through the good and the bad years and, perhaps, an entire retirement.