You know, it has been a good year-end advance for Vanguard GNMA. Which is why, if investors can take away one thing from 2018, it’s that they should never allow predictions to run their money.
Because, if you recall, it was at this time last year when everyone was predicting higher interest rates for 2018. And because of that (not you of course) many soured on Vanguard GNMA and bonds all together, hence removing a most powerful counterbalancing force in their portfolio. Not a good move as it turns out.
Predicting the direction of interest rates is about as useful as predicting the direction of the stock market.
Make a New Year’s resolution: Do not allow predictions to ruin your portfolio. Because, as we’ve seen thus far in 2018, even if your prediction is right you may just end up being wrong about the outcome.