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Posted by Andrew Koenig on March 21, 2007, 12:24 pm
> Would it be reasonable to put my money into Wellesley or is Wellington
> a better choice?
Until recently, the question was a no-brainer because Wellington was closed
to new investors :-)
However, it's been reopened, so the question is legitimate again.
I'm not an expert in this stuff, but it seems to me that Wellesley is aimed
at providing income that appreciates over time, and Wellington is more aimed
at capital growth. This distinction is unimportant if you're in an IRA, but
if it is a taxable investment, you would have to pay taxes immediately on
the income, which would be a disadvantage if you were planning to reinvest
it rather than spend it.
In an IRA, it seems that Wellington has done somewhat better over the past
1-, 3-, 5-, and 10-year periods. This is not surprising, as Wellesley is
about 60% bonds and Wellington is about 65% stocks. In exchange for that,
Wellesley has been significantly less volatile, especially during the
2000-2002 bear market.
As they say, ya pays yer money and ya takes yer choice.
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