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If you want diversification, wont long term corporate bonds be the ticket
Old 12-05-2011, 05:12 PM   #1
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Quantum Sufficit's Avatar
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If you want diversification, wont long term corporate bonds be the ticket


I have posted a few times but mostly I just enjoy reading all of the posts and learning what I can. If diversification is best when assets negatively correlate, I was wondering what you all thought of a portfolio 35% bonds comprised of vanguard long term investment grade corporate, 65% stocks made of 50% TSM and 15% total international stock from vanguard. The chart is here:

Please give me your thoughts. I see some excellent strong negative correlation. I understand people typically recommend treasuries as a flight to quality ensues in bear markets but is this not just as good? Why/ why not?

Please advise


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Old 12-05-2011, 05:40 PM   #2
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Psst Wellington.

I like the way you are thinking, but I'd probably buy total bond market instead of VWESX if you want diversity.

“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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Old 12-05-2011, 07:46 PM   #3
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Want non-correlation? Add PCRIX and some REITs with a sprinkling of Emerging Markets
Can't you see yourself in the nursing home saying, " Darn! Wish I'd spent more time at the office instead of wasting time with family and friends."
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