No, largely because I don’t see much of an alternative other than cash, which we also already have a highish allocation to, and I wouldn’t want to overdo this either.
However, I am considering two things re bonds:
(1) Embracing a larger opportunity set in bonds. Our largest bond holding is a “core plus” fund, which is like any other diversified intermediate term fund except that it has a limited ability to invest in high yield and foreign bonds if the mangers see fit. I like this in the base case, but I think especially now when the bond market is in flux and the better opportunities may lie outside the usual index.
(2) Hedging against neighbor risk. As Nick’s question suggests, bond funds may be subject to shareholders losing faith and selling out of their funds forcing redemptions. I have no interest in dealing with individual bonds, but – Fidelity offers a separately managed account in which they build a portfolio of individual bonds. I may consider this for a portion of our bond holdings.
I participate in financial planning/retirement FB community and one ongoing theme is questioning bonds in a portfolio as opposed to zero questioning of the stock market. Cash vs bonds-do I need any bonds-I hate bonds-the performance is poor-these are just some of the themes. I am a strong proponent of bonds place in a retirement portfolio and believe, at least to some extent, a lack of understanding underpins this ongoing questioning. I actually have even more faith in the bond market now as it seemed to have been a sanity check factor recently in questionable economic policy leading to a policy adjustment. The bond market dwarfs the stock market and, at least to some extent, underpins it’s performance. We own both a few bond ETFs and a few individual bonds (TIPS) which are doing just fine and I expect that to continue. We actually sold a bit of our bond funds as part of our rebalancing strategy in preparation to buy some stock ETFs.
No, because we own bonds rather than bond funds. This eliminates the inherent interest rate risk to valuation that bond funds incur at the time of maturity or needed withdrawal. Individual bonds increase default risk which can be reduced via diversification or owning treasuries. To us, the interest rate risk with bond funds exceeds the default risk and increased complexity of owning individual bonds.
lost faith in our govt that the constitution is not being respected
our president obviously missed those courses
I’m beginning to lose faith in our ability to keep this site free from gratuitous political commentary, from whatever side.
What’s it been, a day since Jonathan had to close a thread to new comments?
No, largely because I don’t see much of an alternative other than cash, which we also already have a highish allocation to, and I wouldn’t want to overdo this either.
However, I am considering two things re bonds:
(1) Embracing a larger opportunity set in bonds. Our largest bond holding is a “core plus” fund, which is like any other diversified intermediate term fund except that it has a limited ability to invest in high yield and foreign bonds if the mangers see fit. I like this in the base case, but I think especially now when the bond market is in flux and the better opportunities may lie outside the usual index.
(2) Hedging against neighbor risk. As Nick’s question suggests, bond funds may be subject to shareholders losing faith and selling out of their funds forcing redemptions. I have no interest in dealing with individual bonds, but – Fidelity offers a separately managed account in which they build a portfolio of individual bonds. I may consider this for a portion of our bond holdings.
I participate in financial planning/retirement FB community and one ongoing theme is questioning bonds in a portfolio as opposed to zero questioning of the stock market. Cash vs bonds-do I need any bonds-I hate bonds-the performance is poor-these are just some of the themes. I am a strong proponent of bonds place in a retirement portfolio and believe, at least to some extent, a lack of understanding underpins this ongoing questioning. I actually have even more faith in the bond market now as it seemed to have been a sanity check factor recently in questionable economic policy leading to a policy adjustment. The bond market dwarfs the stock market and, at least to some extent, underpins it’s performance. We own both a few bond ETFs and a few individual bonds (TIPS) which are doing just fine and I expect that to continue. We actually sold a bit of our bond funds as part of our rebalancing strategy in preparation to buy some stock ETFs.
No, because we own bonds rather than bond funds. This eliminates the inherent interest rate risk to valuation that bond funds incur at the time of maturity or needed withdrawal. Individual bonds increase default risk which can be reduced via diversification or owning treasuries. To us, the interest rate risk with bond funds exceeds the default risk and increased complexity of owning individual bonds.