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Are you still holding short-term bond?
Old 11-19-2005, 08:25 AM   #1
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Are you still holding short-term bond?

The return of short-term bond has been dismal the last two years. Any plan of ditching it?
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Re: Are you still holding short-term bond?
Old 11-19-2005, 08:32 AM   #2
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Re: Are you still holding short-term bond?

I'm just sitting in the money market account at my brokerage - 3.20 right now. Has been slowly rising each week, expect it to continue to rise as the fed brings rate up....I occasionally make a quick trade and then park it back into the MMF.
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Re: Are you still holding short-term bond?
Old 11-19-2005, 08:52 AM   #3
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Re: Are you still holding short-term bond?

The current thinking is that the Fed will move short rates up to 4.5%-5%, which should mean a bit more pain for short duration bonds. I have most of my fixed income portfolio in cash.
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Re: Are you still holding short-term bond?
Old 11-19-2005, 10:18 AM   #4
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Re: Are you still holding short-term bond?

My current plan is to ride up the rate increases with my Vanguard Short-Term Investment Grade and GNMA funds.* I am currently reinvesting those dividends.* I also hold some Vanguard Intermediate-Term Investment Grade that I plan to sell and buy a few preferred stocks with the proceeds.
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Re: Are you still holding short-term bond?
Old 11-19-2005, 10:50 AM   #5
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Re: Are you still holding short-term bond?

Never did have much of anything in bonds with exception of a few balanced mutual funds which have not performed that well. Keeping virtually all of my 'fixed income' in cash at the moment at ING.
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Re: Are you still holding short-term bond?
Old 11-19-2005, 11:08 AM   #6
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Re: Are you still holding short-term bond?

Not in short term bonds already, but may make a move soon to vanguard short term bond of some sort. I think the interest rate increases will be over in another 0.5% increase or maybe 1.0%.

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Re: Are you still holding short-term bond?
Old 11-19-2005, 08:29 PM   #7
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Re: Are you still holding short-term bond?


A local bank is offering a 4.5% 1 yr. CD. I'm moving a bunch out of the Vanguard MMF to jump on this rate.

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Re: Are you still holding short-term bond?
Old 11-19-2005, 08:35 PM   #8
 
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Re: Are you still holding short-term bond?

Quote:
Originally Posted by BUM
A local bank is offering a 4.5% 1 yr. CD. I'm moving a bunch out of the Vanguard MMF to jump on this rate.

Emmigrant is currently paying 4% on just a savings account. I would not lock up the money for a year, there is a good chance that the rate will go up! - I've got my cash parked there currently.
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Re: Are you still holding short-term bond?
Old 11-19-2005, 08:35 PM   #9
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Re: Are you still holding short-term bond?

I am slowly tiptoeing back into modestly longer maturities, 5 years or so. *I think the Fed is going to stop raising rates soon.
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Re: Are you still holding short-term bond?
Old 11-19-2005, 10:07 PM   #10
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Re: Are you still holding short-term bond?

Agreed. Think the new guy has to do one or two more bumps to make a point he is an inflation fighter and then back off before the country goes into recession.... for a soft landing.
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Re: Are you still holding short-term bond?
Old 11-21-2005, 04:08 PM   #11
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Re: Are you still holding short-term bond?

Yes still holding it for money that I may spend in the next 5 years. I don't worry about the return so much, at times money markets will outperform, but on average the fund will win. I have no ability to predict the direction of interest rates. I did move some cash into CDs this year, and I'm not convinced it was worth the hassle.
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Re: Are you still holding short-term bond?
Old 11-21-2005, 08:11 PM   #12
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Re: Are you still holding short-term bond?

If history os of any guidance, short-term bond funds should outperform money market funds in the long run. I intend to keep the bond funds.
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