Anybody who was paying attention in 2022 should realize that there is a downside to bond funds over individual bonds. As a US Federal employee I have access to the G fund in the TSP (Federal 401k equivalent). That has no duration and cannot lose value, and provides yields similar to Treasury Bills. Outside of that, I had a bond fund (Vanguard BND) that took a 15-20% dive at the same time that large cap and total market indexes (Vanguard VTI) took a similar dive. So much for non-correlated investments and spreading risks. That got me to finally pay attention to the mechanics of investing in treasury notes. It seems a lot safer than a bond fund, and it appears that doing so is more tedious than complex. My wife and I are pre-retirees and still pressed for time and attention, so she uses a SPDR short term treasury ETF in the hope that it's the next best thing to actually taking the time to build a T-Bill bond ladder.
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Anybody who was paying attention in 2022 should realize that there is a downside to bond funds over individual bonds. As a US Federal employee I have access to the G fund in the TSP (Federal 401k equivalent). That has no duration and cannot lose value, and provides yields similar to Treasury Bills. Outside of that, I had a bond fund (Vanguard BND) that took a 15-20% dive at the same time that large cap and total market indexes (Vanguard VTI) took a similar dive. So much for non-correlated investments and spreading risks. That got me to finally pay attention to the mechanics of investing in treasury notes. It seems a lot safer than a bond fund, and it appears that doing so is more tedious than complex. My wife and I are pre-retirees and still pressed for time and attention, so she uses a SPDR short term treasury ETF in the hope that it's the next best thing to actually taking the time to build a T-Bill bond ladder.
Post: Should you buy bond funds or individual bonds?
Link to comment from March 25, 2023