If you invested $10,000 10 years ago
SPY - $27,131.73
VWALX - $25,969.65 (most likely better than SPY once you take account into tax consideration)
Also notice how little VWALX was affected by 2002 and 2008 crash. It isn't quite like VUSUX (treasury) that actually went up in 2008, but it is stable enough most of us can stomach and just happily collect the monthly yield.
Of course, shrink the time horizon to last 10 years, or expand it to 1995, and SPY just destroys VWALX. 1995-2000 was just a massive bull run and nothing beats stocks after a 50% sell-off in 2008.
I am not suggesting bond will ever outperform stock over the long haul. But if you are like me feeling uneasy about the current bull market being long in the tooth, or want something that is closer to a rental property in a stable market without all the hassles of being a land lord, you can do a lot worse than buying Vanguard High Yield Muni (VWALX if you have $50,000, VWAHX if you do not).
Full disclosure, I opened a Vanguard account at long last and will ditch Fidelity. When it comes to low cost index funds, nobody comes close. There is simply nothing like VWALX on the market today. HYD/NHMRX are much higher volatility and do not really outperform it over the long haul. I regret not doing this sooner and allowed too much idle cash sitting on my hands. VWALX is not quite like CD but IMO 15% decline in something as hard hitting as 2008 is a fair price to pay for 5% per year appreciation.
Submitted January 21, 2018 at 09:18PM by hitmantb http://ift.tt/2rtlaxl
