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Thread: Bond Funds

  1. #1

    Bond Funds

    Bond funds have been doing well in recent years and I am thinking about investing in them. However, several financial advisors are saying to stick with my 1-5 year bond ladder. The ladder has provided safety, but not much return. I am looking at the following, but concerned about the height of our stock market and what will happen with bond funds when rates rise:

  2. #2
    5-yr bond ladder has duration of about 2.5, so that would be like short-term bond funds. Some of the bond funds mentioned, or the bond portions of balanced funds, have higher durations and may be of lower quality. Keep this mind in shifting from bond ladder to funds.

  3. #3
    Unless your wanting to swtich to go for the Ylds?
    I would stick with thsoe ST Bonds and consdier them as In return for cash alternative
    and Use those Cash/Bonds for the purpose of being your banker to borrow $ from when the time comes that your Equities Go On sale ( ie: Major Correction or Outright Bear..)
    FOr this time around, I owuld have more in cash/Bonds to do that
    Why? I don't expect Bonds to Do their Expected job as they have in the past( Take 2000-002') for Example
    and we had to sell almost if not all our bonds to cover our Buying our Equities for early to Mid 09'
    If, OTOH your a B&H type and won't be planning on doing any Rebalancing?
    Then By all means, I would move into those bonds
    My $ making Bond funds are Pimco's.. PIMIX, PIGIX..

  4. #4
    Personally, I had a large slug of cash set aside to balance my stock portfolio and put it into PIMCO INCOME D (PONDX, 2/3rds of it) and BNDX (which is Vanguards hedged foreign bond fund - the other 1/3rd). PONDX actually has a short component (look at the Morningstar portfolio composition tool), which appears to smooth out pullbacks on interest rate rises, and BNDX removes the volatility from currency fluctuations. It is the only hedged foreign bond fund, in ETF format, to my knowledge.


 

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