How are we doing? Great! According to our plan, at the end of February 2012, the value of the 529 should be at $5,046.43. The actual value is $5,664.76, which is 12.25% ahead of plan. How do we react to this? At this time, we do not. If we were behind our plan, we might want to increase our monthly payment to “catch up.” Also, if the monthly payment were starting to stretch our budget too much, and we were ahead of plan, we could put off increasing the monthly payment. What has enabled this performance? Overall market conditions that have outpaced our conservative, yet realistic projected 7% annual growth rate in our plan and the additional contributions of family members and Upromise (THANK YOU, FAMILY MEMBERS!).

The monthly contribution amount needs to increase approximately 23% each year, according to our plan. This increases our monthly payment from $62/month to $76/month, amounting to an extra $168 per year.

Finally, some housekeeping. When I refer to CAGR, I am referring to compound annual growth rate. The plan assumes a CAGR of 7%, meaning each year, the value increases by 7%. CAGR is calculated with the equation below, where N is the number of years (or periods) in question. For Initial Value, I am using all money (minus Upromise) added to the fund, and for Ending Value I am using the value of the portfolio on February 29, 2012.

Compound Annual Growth Rate

First, let’s see what Mr. Market has done over the last two years.

Let’s see how our benchmark 529 funds did during the last two years.

The Growth Fund of America includes its 5.25% front-end load. The dividend from Growth Fund of America is not included in its cost basis. The load almost cuts its performance in half.

Drumroll, please. Here is the performance of our Vanguard 529 Index Fund portfolio over the last two years.

Being a more moderate portfolio, I would expect the 70/30 stock/bond split to underperform the general market and the more aggressive benchmarks. The Oppenheimer Blended Age-Based 7–9 Years Portfolio is actually a closer benchmark; we will have to wait a couple years in order to start comparing our portfolio to that specific benchmark.

In summary, if it were not for having a written plan, we would not know if the 16% increase over the last two years was good, bad, or just OK. Since we are 12% ahead plan, we know it is very good! I am very happy with the performance of this portfolio.

Overall market performance between January 31, 2012, and February 29, 2012:

• S&P 500 (^GSPC): +4.06%
• Dow Jones Industrial Average (^DJI): +2.53%
• NASDAQ (^IXIC): +5.44%

The performance of our benchmarks between January 31, 2012, and February 29, 2012:

• Growth Fund of America (CGFAX): +4.41% (with dividend but without fees)
• Oppenheimer Blended Age-Based 0–6 Years Portfolio: +4.11%

The performance of our Vanguard Index Fund portfolio between January 31, 2012, and February 29, 2012:

•  Vanguard 70/30 Stock/Bond Index Fund Portfolio: +3.37%

At the end of February, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 16.46% (up from 16.45%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 16.08% (up from 15.90%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 37.74% (up from 37.00%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 15.59% (down from 15.76%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 14.46% (down from 14.89%; goal = 15%)

The bond portion of our moderate portfolio is starting to lose ground. This is not the first time this has happened, but what is different this time is falling unemployment, lowered European credit risk, and a strong bull market in stocks. Bonds have had a safety net under them from the Federal Reserve’s quantitative easing policies. I would imagine those policies are coming to an end, as long as there are no major hiccups between now and the election (another round would be too unfavorable during a presidential election). The good news is that the money coming out of bonds will flow into stocks, which we have exposure to. Also, falling bond prices mean higher dividend yields; therefore, the shares we already own will “pay more” in the future (this may not offset the price drop though).

Here is a graph that plots the weekly price action of the Vanguard Total Bond Market Index (VBMFX) for the last two years. The last seven weeks have been flat.

2-Yr Weekly Price Action of VBMFX

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.

Since my last report, the S&P 500 has broken out of its second trading range and has a strong upward momentum. Can this momentum continue? With unemployment improving and corporate spending still strong, I think so. Interesting note: if you were able to invest in the Vanguard S&P 500 Index Fund (VFINX) at the low in August 2011, you would have had a 17% gain as of February 2012—a year’s worth of growth in five months. Timing the market is always tough and this is a prime example of dollar-cost averaging. Our investments during August 2011 and September 2011 have grown nicely.

Special congratulations have to go out the NASDAQ. The NASDAQ is trading above its post–Internet bubble high! The NASDAQ is at its highest since the bottom in July 2002.  Some math: if you were able to invest at the low of the NASDAQ (July 2002), you would have had a 142% gain as of February 2012.

One final housekeeping item. This month’s return for the Growth Fund of America (CGFAX) includes its dividend, which was paid in December. I also updated the dividend from December 2010, since I had previously not included it.

Performance for December 2011:

Overall market performance between November 30, 2011, and January 03, 2012:

• S&P 500 (^GSPC): +2.41%
• Dow Jones Industrial Average (^DJI): +2.92%
• NASDAQ (^IXIC): +1.08%

The performance of our benchmarks between November 30, 2011, and January 03, 2012:

• Growth Fund of America (CGFAX): +0.75% (with dividend but without fees)
• Oppenheimer Blended Age-Based 0–6 Years Portfolio: +1.16%

The performance of our Vanguard Index Fund portfolio between November 30, 2011, and January 03, 2012:

•  Vanguard 70/30 Stock/Bond Index Fund Portfolio: +1.28%

At the end of December, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 16.18% (-%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.93% (-%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 36.66% (-%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 15.966% (-%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 15.26% (-%; goal = 15%)

NOTE: My Excel formulas had an error in them, so I lost the history on the allocation percentages. I have gone back and recalculated December 2011 and January 2012.

Performance for January 2012:

Overall market performance between January 03, 2012, and January 31, 2012:

• S&P 500 (^GSPC): +2.77%
• Dow Jones Industrial Average (^DJI): +1.90%
• NASDAQ (^IXIC): +6.23% (!! WOW !!)

The performance of our benchmarks between January 03, 2012, and January 31, 2012:

• Growth Fund of America (CGFAX): +5.05% (before fees)
• Oppenheimer Blended Age-Based 0–6 Years Portfolio: +3.21%

The performance of our Vanguard Index Fund portfolio between January 03, 2012, and January 31, 2012:

•  Vanguard 70/30 Stock/Bond Index Fund Portfolio: +3.59%

At the end of January, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 16.45% (up from 16.18%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.90% (down from 15.93%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 37.00% (up from 36.66%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 15.76% (down from 15.96%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 14.89% (down from 15.26%; goal = 15%)

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.

Here are some comments from Vanguard economists who share their insights on the U.S. and Europe for 2012:

Since I do not want to promote individual stocks on this blog, I am going to propose a diversified portfolio of four ETFs in my contest entry. This contest has simple rules; they are as follows:

• Four stocks picked at the beginning of the year
• No trading allowed (buy and hold)
• Canadian or USA stocks
• Dividends count in end-of-year yield calculation

1. I am big fan of dividend-paying stocks. They provide income (and “free” shares if the dividends are reinvested, lowering your cost per share) and can have a “floor” to their prices. If the price drops too much (for example, because of bad news from Europe), the yield increases. As the yield increases, the stock becomes more and more attractive to buyers. The financial sector is still too risky for me, especially when it comes to dividends. Some banks are reinstating dividends and some are actually increasing their dividends, but it just takes one act of Congress (during an election year) or a new regulation to reverse the positive dividend trend.

ETF:  WisdomTree Dividend ex-Financials Fund

WisdomTree Dividend ex-Financials index measures the performance of high dividend-yielding stocks outside the financial sector. The index consists primarily of large- and mid-capitalization companies listed on major U.S. stock exchanges that pass WisdomTree Investments market capitalization, liquidity and selection requirements.

2. Next it is time for some diversification. Typically, different sectors or asset classes act independently of each other (this is referred to as correlation, or lack thereof). Last year, everything was correlated. All sectors and/or asset classes would go up or down together. I hope some of the correlation goes away this year. Typically, real estate investment trusts (REITs) have a low correlation to stocks. I like their income, and as the economy slowly improves, the sector should improve.

ETF: Vanguard REIT Index Fund ETF Shares

The fund employs a passive management or indexing investment approach designed to track the performance of the MSCI US REIT Index. The MSCI US REIT Index, a free float-adjusted market capitalization index, consists of equity REITs that are included in the MSCI US Investable Market 2500 Index, except for specialty equity REITs that do not generate a majority of their revenue and income from real estate rental and leasing operations.

3. As mentioned previously, I am a little cautious of the financial sector. There is one niche sector that I do like, even though it is a little more risky: business development companies (BDCs). BDCs are typically closed-end management investment companies that make long-term private investments. For tax purposes, they are commonly structured as regulated investment companies (RICs), which means that the companies have to pay much of their taxable income out to shareholders as dividends. These companies focus on making business loans to lower- and middle-market companies. They provide long-term debt as well as equity capital. Most BDCs will also offer managerial expertise to assist the companies they invest in, as needed. I like BDCs because they are filling in the void left by regional banks, which, since the financial crisis, have stopped or limitied thier lending to small and midsized companies.

ETF: ETRACS Linked to the Wells Fargo Business Development Company Index

The ETRACS Linked to the Wells Fargo Business Development Company Index due April 26, 2041 is designed to track an investment in the Wells Fargo Business Development Company Index (“Index”), and may pay a variable quarterly coupon linked to the cash distributions associated with the underlying BDC constituents, less investor fee. The Wells Fargo Business Development Company Index is a float adjusted, capitalization-weighted Index that is intended to measure the performance of all Business Development Companies (“BDC”) that are listed on the New York Stock Exchange (“NYSE AMEX”) or NASDAQ and satisfy specified market capitalization and other eligibility requirements. To qualify as a BDC, the company must be registered with the Securities and Exchange Commission (“SEC”) and have elected to be regulated as a BDC under the Investment Company Act of 1940 (“1940 Act”).

4. Finally, my fourth pick. As mentioned in my previous post, inflation can be a killer. I would like some inflation protection. Typically, dividend-paying stocks can keep up with inflation over time. A short-term spike in inflation can dampen profits in the short term, though. I am guessing the inflation we will see over the next year will be either food or energy related. One way to invest would be through Treasury Inflation-Protected Securities (TIPS), which are special bonds from the U.S. government. The TIP ETF from iShares currently has a nice yield around 4%. There is one other risk I would like to hedge against over the next year, and that is geopolitical tensions. Any issues in the Middle East could upset energy prices and drive down stock prices; I would like a hedge against that. I decided to go with a commodity ETF that follows the energy sector. I hope to get some inflation protection and a hedge against geopolitical tensions.

ETF:  PowerShares DB Energy Fund

The PowerShares DB Energy Fund (Fund) is based on the DBIQ Optimum Yield Energy Index Excess Return™ (Index) and is managed by DB Commodity Services LLC. The Index is a rules-based index composed of futures contracts on some of the most heavily traded energy commodities in the world: Light Sweet Crude Oil (WTI); Heating Oil; Brent Crude Oil; RBOB Gasoline; and Natural Gas. The Index is intended to reflect the performance of the energy sector. 

Here is a final summary of my ETF portfolio for 2012:

I will provide quarterly updates and track the dividend reinvestments. For a benchmark, I am going to use Vanguard S&P 500 Index ETF, ticker: VOO. Here are my starting positions for each ETF:

The nice folks at the PNC Financial Services Group (PNC) have continued the tradition of determining the cost of the 12 Days of Christmas. This year, the cost has increased only 3.5%, in line with the CPI. Remember, last year, the cost increased 9.2% over 2009, and in 2009 it increased only 1.8% over 2008 prices. This year, two turtle doves increased by 25% and four calling birds decreased by –13.3%.

PNC really did a great job on the interactive website this year; I recommend taking some time and playing around with it. Great for little ones!

Link:  PNC – Christmas Price Index

November was another volatile month for the markets. The month started off well behaved and traded “flat”.  Need the end of the month the market took a nose dive based on bad news out of Europe, only to recover by the very end of the month. I added a third line to the chart of the Vanguard S&P 500 Index fund. One can see a second, higher, trading range forming between 111.5 and 118.

S&P 500: Nov-2011 (Year to Date)

Overall market performance between October 31, 2011, and November 30, 2011:

• S&P 500 (^GSPC): -0.51%
• Dow Jones Industrial Average (^DJI): +0.76%
• NASDAQ (^IXIC): -2.39%

Our sample actively managed mutual fund, the Growth Fund of America (CGFAX), was down -0.55% (before fees) between October 31, 2011, and November 30, 2011. Whereas our age-based benchmark, the Oppenheimer Blended Age-Based 0–6 Years Portfolio, was down -1.26%.

Our more conservative Vanguard index fund portfolio was down -1.57% between October 31, 2011, and November 30, 2011 (before the monthly automatic investment). The heavy weighting in the International Index fund hurt us this month, in addition to the High-Yeild Corporate Bond fund. All five funds were in the red this month.  Here is the performance of each individual fund in our index fund portfolio:

At the end of October, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 16.16% (up from 16.01%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.79% (up from 15.62%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 37.05% (down from 37.45%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 15.68% (down from 15.79%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 15.32% (up from 15.14%; goal = 15%)

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.

S&P 500 Trading Range, Oct-2011

Overall market performance between September 30, 2011, and October 31, 2011:

• S&P 500 (^GSPC): +10.77%
• Dow Jones Industrial Average (^DJI): +9.54%
• NASDAQ (^IXIC): +11.13%

Our sample actively managed mutual fund, the Growth Fund of America (CGFAX), was up +10.45% (before fees) between September 30, 2011, and October 31, 2011. Whereas our age-based benchmark, the Oppenheimer Blended Age-Based 0–6 Years Portfolio, was up +10.21%. Even though the performance of CGFAX is impressive, it still did not outperform the Total Stock Market Index, Small-Cap Index, S&P 500, or NASDAQ.

Our more conservative Vanguard index fund portfolio was up +8.79% between September 30, 2011, and October 31, 2011 (before the monthly automatic investment). Even though this is less than the other two more aggressive investments, 8.79% is not bad by any means. The money that was put into the account for the month of September has already had more than a year’s worth of growth. Keep in mind, our yearly target is 7% on average. Here is the performance of each individual fund in our index fund portfolio:

At the end of October, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 16.01% (up from 15.11%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.62% (up from 15.23%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 37.45% (down from 36.93%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 15.79% (down from 16.30%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 15.14% (down from 16.43%; goal = 15%)

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.

The age-based fund has taken back first place by a small margin and all three investment options are back to the positive territory. Last month the actively managed fund had actually lost money (its value was below the money put into the fund).

Finally, here is an interesting article to read in regard to index fund investing: Indexing Fans Have a Lot to Thank Vanguard for This Year, by William Samuel Rocco of Morningstar.

There was some positive economic news recently. From the September-2011 ISM report:

Manufacturing continued its growth in September as the PMI registered 51.6 percent, an increase of 1 percentage point when compared to August’s reading of 50.6 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 28th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the 26th consecutive month. Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through September (56.2 percent) corresponds to a 4.8 percent increase in real gross domestic product (GDP). In addition, if the PMI for September (51.6 percent) is annualized, it corresponds to a 3.2 percent increase in real GDP annually.”

ISM’s Employment Index registered 53.8 percent in September, which is 2 percentage points higher than the 51.8 percent reported in August. An Employment Index above 50.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Also, a quote from Mr. Warren Buffett himself:

Our railroad carried 200,000 carloads last week,” Buffett said Oct. 4 at a Fortune magazine conference in Laguna Niguel California. “That’s the highest total in three years. And that’s stuff moving around the country, supplying merchants and doing all kinds of things.

Overall market performance between August 31, 2011, and September 30, 2011:

• S&P 500 (^GSPC): –7.17%
• Dow Jones Industrial Average (^DJI): –6.02%
• NASDAQ (^IXIC): –6.36%

Our sample actively managed mutual fund, the Growth Fund of America (CGFAX), was down –8.77% (before fees) between August 31, 2011, and September 30, 2011. Not sure what caused its poor performance. If you look at the two sectors that did the worst over the past month, CGFAX is only 20% international and underweight to the S&P 500 in regard to financials. The 20% in international must have been a huge drag on the performance. CGFAX underperformed (before fees!) by more than 1% in one month alone.

Our age-based benchmark, the Oppenheimer Blended Age-Based 0–6 Years Portfolio, performed better than CGFAX, down –7.90%. The Oppenheimer age-based fund performed almost a full percentage point better than CGFAX but still underperformed the general (U.S.) market. Oppenheimer has officially given up the lead to the Vanguard index fund portfolio in regard to overall portfolio value. Both still have positive “profits”; the Vanguard portfolio’s is currently greater.

Our Vanguard index fund portfolio was down –7.83% between August 31, 2011, and September 30, 2011 (before the monthly automatic investment). Of the portfolios, the Vanguard did the best, because of its weighting in bonds. It would have done better if the equity portion were not weighted toward international. The only funds outperforming the general market were the two bond funds; even one of those was in the red for the month. Here is the performance of each individual fund in our index fund portfolio:

At the end of September, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 15.11% (down from 15.65%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.23% (unchanged from 15.23%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 36.93% (down from 38.76%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 16.30% (up from 15.34%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 16.43% (up from 15.03%; goal = 15%)

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.

If the Greece debt issue is resolved smoothly (meaning no last-minute surprises of some sort), we should be in good shape. If there are any surprises from Europe, an overreaction is bound to take place in the U.S. markets. The S&P 500 is trading in a range finally, so hopefully, the sell-off is complete.

Vanguard S&P 500 Index Fund Prices

Here is a very good article by Dirk Van Dijk of Zacks Investment Research, Expectations Starting to Fall, dated 12-Sept-2011. The title sounds a lot more glum than the text of the article. For example:

“…The expectations for the full year are very healthy, with total net income for 2010 rising to $793.0 billion in 2010, up from $543.6 billion in 2009. In 2011, the total net income for the S&P 500 should be $916.1 billion, or increases of 45.9% and 15.5%, respectively. The expectation is for 2012 to have total net income passing the $1 Trillion mark to $1.009 Trillion, for growth of 9.4%. That will also put the “EPS” for the S&P 500 over the $100 “per share” level for the first time at $105.79. That is up from $56.90 for 2009, $83.12 for 2010 and $96.02 for 2011. In an environment where the 10-year T-note is yielding 1.92%, a P/E of 14.3x based on 2010 and 12.4x based on 2011 earnings looks attractive. The P/E based on 2012 earnings is 11.2x. Those P/Es are based on the Thursday close, so are even lower after Friday’s fall.“

Overall market performance between July 29, 2011, and August 31, 2011:

• S&P 500 (^GSPC): –5.68%
• Dow Jones Industrial Average (^DJI): –4.36%
• NASDAQ (^IXIC): –5.34%

Our sample actively managed mutual fund, the Growth Fund of America (CGFAX), was down –6.86% (before fees) between July 29, 2011, and August 31, 2011.

Our age-based benchmark, the Oppenheimer Blended Age-Based 0–6 Years Portfolio, performed a little better than CGFAX,  down –6.51%. Oppenheimer has officially given up the lead to the Vanguard index fund portfolio in regard to overall portfolio value. Both still have positive “profits”; the Vanguard portfolio’s is currently greater.

Our Vanguard index fund portfolio was down –5.91% between July 29, 2011, and August 31, 2011 (before the monthly automatic investment). The only funds outperforming the general market were the two bond funds; even one of those was in the red for the month. Here is the performance of each individual fund in our index fund portfolio:

At the end of June, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 15.65% (down from 16.07%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.23% (down from 15.24%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 38.76% (down from 39.85%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 15.34% (up from 14.91%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 15.03% (up from 13.94%; goal = 15%)

This is a sign of a well-balanced portfolio (if I do say so myself). Most improved goes to the Total Bond fund, which is back to a 15% asset allocation. High-Yield Bond has also corrected itself. Small-Cap Index is still correcting itself and the Total International is losing ground.

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.

• S&P 500 (^GSPC): –2.14%
• Dow Jones Industrial Average (^DJI): –2.18%
• NASDAQ (^IXIC): –0.62%

Our sample actively managed mutual fund, the Growth Fund of America (CGFAX), was down –1.42% (before fees) between June 30, 2011, and July 29, 2011. The Growth Fund of America was on par with the market as a whole (before fees). It outperformed the S&P 500 and the Dow but lost to the NASDAQ.

Our age-based benchmark, the Oppenheimer Blended Age-Based 0–6 Years Portfolio, performed worst than CGFAX,  down –2.02%.

Our Vanguard index fund portfolio was down –1.22% between June 30, 2011, and July 29, 2011 (before the monthly automatic investment). Best monthly performance of the three but still not strong enough to outperform the NASDAQ. Here is the performance of each individual fund in our index fund portfolio:

At the end of June, the allocation of our Vanguard portfolio was:

• Vanguard Small-Cap Index (NAESX):
  • 16.07% (down from 16.52%; goal = 15%)
• Vanguard Total Stock Market Index (VTSMX):
  • 15.24% (down from 15.41%; goal = 15%)
• Vanguard Total International Stock Index (VGTSX):
  • 39.85% (down from 40.00%; goal = 40%)
• Vanguard High-Yield Bond (VWEHX):
  • 14.91% (up from 14.52%; goal = 15%)
• Vanguard Total Bond Market Index (VBMFX):
  • 13.94% (up from 13.54%; goal = 15%)

This is a sign of a well-balanced portfolio (if I do say so myself).  The two bond funds are correcting their way back to 15% and the small-cap fund is correcting its way down to 15%.

You can see the relative performance of each portfolio on the performance page: Vanguard Index Fund 529 Performance.