With the endless wailing and gnashing of teeth on the news about the recent drops in the various world stock markets, I decided to update our info on our work defined contribution pension plans. I’ve written about the fact that we have money invested in a PH&N Bond Fund in this plan. I’ve agonized for several YEARS now about whether to sell that position or not. Because I am very risk averse, and a great procrastinator, and am skeptical that any significant rise in interest rates is going to hit in the short term, I’ve left the money there. And frankly I’m glad I did.
How Has the Bond Fund Done Year to Date?
So far, till almost the end of September, the Bond Fund has returned a little over 3%. Since I have made no new contributions to the fund all year, that’s a fairly accurate number.
Until a couple of months ago, that number was closer to 6.5% and it seemed a bit small compared to the 13% return we were seeing on a “mostly European” international fund.
How Are the International and TSX Funds Faring During the Slump?
Well, the international, including US, funds are breaking even. They haven’t lost any money, yet. But it’s close.
The TSX fund is in the red.
How Is the Entire Defined Contribution Balance Looking?
Well, right now it’s essentially at a break-even point. The total amount has only grown by the amount of new contributions made this year. So technically, it’s losing money at whatever the rate of inflation is for the year.
If that doesn’t sound possible, it’s important to remember that the amount invested in the Bond Fund is fairly high compared to the amount invested in the TSX and international funds. And right now, I’m happy about that!
Do you still have some money tucked away in a Bond Fund? Is it providing some comfort and peace during this time of turmoil? Please share your views with a comment.