Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
How many bond funds are needed?
Old 02-11-2007, 11:47 AM   #1
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,063
How many bond funds are needed?

I am the proud investor in these bond funds:Vanguard Short-Term; Vanguard High Yield; Buffalo High Yield (in an IRA) and Dodge and Cox Income Fund (in an IRA). I also have the TIPs ETF. Too many bond funds? Does the Dodge and Cox Income Fund cover everything, so I don't actually need the other funds?
__________________

__________________
Carpe cōleī
redduck is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: How many bond funds are needed?
Old 02-11-2007, 06:58 PM   #2
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 961
Re: How many bond funds are needed?

Quote:
Originally Posted by redduck
I am the proud investor in these bond funds:Vanguard Short-Term; Vanguard High Yield; Buffalo High Yield (in an IRA) and Dodge and Cox Income Fund (in an IRA). I also have the TIPs ETF. Too many bond funds? Does the Dodge and Cox Income Fund cover everything, so I don't actually need the other funds?
I don't know about TIPS, but DODIX can and does hold HY bonds, and can shift its duration around [for example, going from ST to IT, etc.], as well as shift sectors around [Treasuries, Corporates, Mortgages]. You could always call Dodge and Cox and ask about TIPS.

I view DODIX as a substitute for an IT total bond fund [like VBMFX].

Any reason you'd want to own 2 HY bond funds?

- Alec
__________________

__________________
ats5g is offline   Reply With Quote
Re: How many bond funds are needed?
Old 02-11-2007, 07:37 PM   #3
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,063
Re: How many bond funds are needed?


[Any reason you'd want to own 2 HY bond funds?]

- Alec

Not really. Awhile back, I was able to buy the Buffalo HY Fund at Schwab (in my IRA) with no transaction fee. Thought it was a good idea at the time (so did Barron's Magazine--that's where I got the idea). My guess it's not a necessary part of my portfolio. I could sell it and put the proceeds into Dodge and Cox Income Fund. One less fund to monitor. Oh, D&C income fund does have TIPs in it.


And, one day, I'm going to figure out how to quote a reply the correct way on this website. (But, probably not today).
__________________
Carpe cōleī
redduck is offline   Reply With Quote
Re: How many bond funds are needed?
Old 02-11-2007, 09:25 PM   #4
Full time employment: Posting here.
 
Join Date: Dec 2006
Posts: 509
Re: How many bond funds are needed?

I carry very few actual bonds in my portfolio. I am invested in some LLCs that return 9-10% annually with very low volatility and minimal risk, so I basically consider that my bond portion.

Also, I have a couple of Whole Life insurance policies (got duped, but now that I'm in... might as well) that I consider also the "bond" part of my portfolio.

Everything else is in equities... my 401k has a 0% bond allocation, and after tax I'm in the Vanguard Total Market as well as the aforementioned LLCs (which I also carry some shares in my Roth IRAs).
__________________
Peaceful_Warrior is offline   Reply With Quote
Re: How many bond funds are needed?
Old 02-12-2007, 11:12 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,484
Re: How many bond funds are needed?

Quote:
Originally Posted by redduck
I am the proud investor in these bond funds:Vanguard Short-Term; Vanguard High Yield; Buffalo High Yield (in an IRA) and Dodge and Cox Income Fund (in an IRA). I also have the TIPs ETF. Too many bond funds? Does the Dodge and Cox Income Fund cover everything, so I don't actually need the other funds?
Yes, IMO DODIX is good enough. One nice thing about DODIX is that they shorten or lengthen the duration based on where the best value is in the yield curve.

The only other thing is if you want a couple of years of money in shorter-term income - money that you expect to withdraw in 2-3 years time. Then a short term or ultra short term will take care of that. Might be a good enhancement.

Holding high yield funds usually increases total return, but it also increases your credit risk and volatility. Another problem with high yield is that it tanks when stocks tank (and vice versa) so it doesn't really give you the rebalancing benefit that other fixed income will.

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: How many bond funds are needed?
Old 02-12-2007, 02:51 PM   #6
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 961
Re: How many bond funds are needed?

Quote:
Originally Posted by redduck
[Any reason you'd want to own 2 HY bond funds?]

- Alec

Not really. Awhile back, I was able to buy the Buffalo HY Fund at Schwab (in my IRA) with no transaction fee. Thought it was a good idea at the time (so did Barron's Magazine--that's where I got the idea). My guess it's not a necessary part of my portfolio. I could sell it and put the proceeds into Dodge and Cox Income Fund. One less fund to monitor. Oh, D&C income fund does have TIPs in it.


And, one day, I'm going to figure out how to quote a reply the correct way on this website. (But, probably not today).
The whole quoting thingee is not all that hard. Simply pick the post that you want to quote and click "quote".

As long as your fine with DODIX's management moving the fund's holdings around as they see fit, you're good. Though, it is a little pricey for me for a bond fund.

- Alec
__________________
ats5g is offline   Reply With Quote
Re: How many bond funds are needed?
Old 02-12-2007, 06:20 PM   #7
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Re: How many bond funds are needed?

Quote:
Originally Posted by redduck
I am the proud investor in these bond funds:Vanguard Short-Term; Vanguard High Yield; Buffalo High Yield (in an IRA) and Dodge and Cox Income Fund (in an IRA). I also have the TIPs ETF. Too many bond funds? Does the Dodge and Cox Income Fund cover everything, so I don't actually need the other funds?
It depends if you want to do "sliced and diced" or fine tuning on bond allocation.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: How many bond funds are needed?
Old 02-12-2007, 06:37 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,884
Re: How many bond funds are needed?

I have 3 bond funds in my portfolio.

1) TIPS Idx fund @ Vanguard (I have it in RO IRA as well as my Roth)

2) Intermediate-Term Bond Idx fund @ VG (Also RO and Roth)

(Note: The above funds include about 40% of my entire stash)

3) ST Bond index fund @ VG (It is the back-up for my taxable Prime MMF also @ VG) Currently returning less that PMMF, so it is not a current winner.

I tend to favor equities over fixed investments, so I generally retain that part of my stuff as a diversification play.


__________________

__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Where to park/invest funds needed at certain time intervals during retirement? Bailing-Bob FIRE and Money 11 12-17-2006 10:58 PM
Bond funds: continuing to get hosed soupcxan FIRE and Money 31 10-29-2005 08:45 AM
TIPS: bonds vs bond funds wabmester FIRE and Money 4 07-07-2005 08:25 AM
Low cost funds into ETFs? Olav23 FIRE and Money 26 07-06-2005 10:42 PM
Building a short-term bond portfolio for 20+ years Nords FIRE and Money 3 02-12-2004 08:54 PM

 

 
All times are GMT -6. The time now is 07:02 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.