Am curious how folks break down their fixed income allocation. Aside from duration, credit quality, etc. I think about these other "buckets":
1) within balanced funds; allows some overall portfolio balancing to be done by professionals
2) bond mutual funds or etfs of various flavors; professional management and probably better returns over time, but loss of principal stability
3) directly owned securities including CDs, treasuries, etc; stable principal but illiquid (assuming you hold to maturity)
4) true cash; e.g., money market funds; stable principal and liquid
I am currently wrestling with how much to allocate between buckets 2 and 3.