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Much appreciations for everyone's input on my newbie questions. I have learned a lot here. Just wished I have discovered this forum a few year earlier. Would have save me a very EXPENSIVE lesson. Okay to further my education, this time regarding bond.
We know that a good balance portfolio need to have some bond. How much depends on the risk profile of the investor. So far, so good? I also know that bond moves in the opposite direction of interest rate with the interest rate having more effect on long bond than short term bond.
Now my question. In the period of rising interest rates, is it desirable to switch to short term bond and vice versa during a period of declining interest rates or is it better to stay put and rebalance? I realize that like stocks, we can not be totally certain of the direction of interest rate movement. But it seems to this novice investor that the direction of the interest rate is more predictable based on the Fed's policy than the stock market's movement. Any thoughts?
Van
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