5 years in cash

[In-control]

You guys and gals with CD ladders did you start 'em by buying CDs of 1,2,3,...n years and say presto I've got a CD ladder or did you build 'em over many years with all longer maturity instruments until enough rungs?

I built the original 5 over time. It tock me ~ 3 years and I sold a bunch of stock options to accelerate it. This served to re-balance my portfolio. Now my portfolio funds about 80% of my needs and I need to earn the rest, since their will be little appriation of assets this year.

Once I committed to a 20%cash 40%bond and 40%stock allocation it all fell together nicely.

 

[walkinwood]

My approach is to have 1 year in money market (Vanguard Prime) and 4-5 years in short term bonds funds (VFSUX). That way I have access to everything at a moment's notice if needed for rebalancing purposes, but I get the same return smoothing benefits as if I maintained a bond ladder.

I have the same plan, but once this mess settles down, I plan to use ST & MT treasuries & TIPS instead of ST corp bonds.

 

[DblDoc]

I have the same plan, but once this mess settles down, I plan to use ST & MT treasuries & TIPS instead of ST corp bonds.

I made that switch about 18m ago based on the advice of Swedroe, Swenson and others and have learned why that advice was/is good. Take your risk with equities and stick to gumint bonds. Unfortunately I only have access to bond funds so still have some NAV variability that I cannot control. For that reason I'm planning on cash + CD ladder for 4-5 years worth and the remaining fixed income in bond funds.

I'd still like to hear how people created their CD ladder. As mine will not be tax advantaged and I'm in a high marginal tax rate I'm loathe to create them until absolutely necessary.

DD

 

[In-control]

I made that switch about 18m ago based on the advice of Swedroe, Swenson and others and have learned why that advice was/is good. Take your risk with equities and stick to gumint bonds. Unfortunately I only have access to bond funds so still have some NAV variability that I cannot control. For that reason I'm planning on cash + CD ladder for 4-5 years worth and the remaining fixed income in bond funds.

I'd still like to hear how people created their CD ladder. As mine will not be tax advantaged and I'm in a high marginal tax rate I'm loathe to create them until absolutely necessary.

DD

I started to setup my portfolio w/o ladderd CD's, using bond funds, and quickly realized that the variabiltiy of bond funds made them bad choices for the cash source that needed to be guareenteed. Before I RE'd I rebalanced to have the 5 yr cd Ladder and am very thankful that I did. I don't really see anyother good choice, especially with FDIC insurance.