I have 10% of my portfolio in I-Bonds, 10% in Short term treasuries. With interest rates likely to go down, would long/intermediate bond funds make sense?
Besides Individual Bonds with duration thru 2029, I have added some VCIT (Vanguard Investment Grade Intermediate Term ETF) in my IRA account in preparation for future lower interest rates.
In my traditional IRA, VSIGX Intermediate-Term Treasury Index (ER 0.07%) and VTAPX Short-Term Inflation-Protected Securities Index (ER 0.06%). In 2022’s skyrocketing interest rates, VTAPX did its intended job, paying over $44k in dividends.
While I’ve never invested in a bond fund, I am aligned with your view to extend the term. My wife and I locked in 10% of our portfolio in 5-7 year bonds late last year – mostly hi-grade corporates paying 5.5+%. This was by far the biggest and only longer-term bond commitment we’ve ever made as we’ve never been much into the fixed income side of the equation. We have another 5% of the portfolio in cash and shorter term bonds, plus stocks that could be rebalanced. We’d be happy with more extended-term, high-rate bonds if interest rates bounce again. We probably should have locked in more of the portfolio to extended-term bonds during the April and May interest rate bounce.
Most of my bond investments are in individual TIPS maturing at different years, but I do have some in inflation-protected Bond funds. Until last year, my only bond fund was VTIP, but I also have started to shift some money from VTIP to SCHP which has a higher duration than VTIP.
I’ve been thinking about adding some corporate bonds in the mix using the target-maturity funds (e.g., Bulletshare ETFs), but the small spread isn’t worth the credit risk for my taste.
Keeping it simple and diversified, BND and AGG.
Besides Individual Bonds with duration thru 2029, I have added some VCIT (Vanguard Investment Grade Intermediate Term ETF) in my IRA account in preparation for future lower interest rates.
In my traditional IRA, VSIGX Intermediate-Term Treasury Index (ER 0.07%) and VTAPX Short-Term Inflation-Protected Securities Index (ER 0.06%). In 2022’s skyrocketing interest rates, VTAPX did its intended job, paying over $44k in dividends.
While I’ve never invested in a bond fund, I am aligned with your view to extend the term.
My wife and I locked in 10% of our portfolio in 5-7 year bonds late last year – mostly hi-grade corporates paying 5.5+%. This was by far the biggest and only longer-term bond commitment we’ve ever made as we’ve never been much into the fixed income side of the equation.
We have another 5% of the portfolio in cash and shorter term bonds, plus stocks that could be rebalanced. We’d be happy with more extended-term, high-rate bonds if interest rates bounce again. We probably should have locked in more of the portfolio to extended-term bonds during the April and May interest rate bounce.
Most of my bond investments are in individual TIPS maturing at different years, but I do have some in inflation-protected Bond funds. Until last year, my only bond fund was VTIP, but I also have started to shift some money from VTIP to SCHP which has a higher duration than VTIP.
I’ve been thinking about adding some corporate bonds in the mix using the target-maturity funds (e.g., Bulletshare ETFs), but the small spread isn’t worth the credit risk for my taste.
FTHRX plus Muni Bond funds