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IRA investment
Old 09-05-2013, 06:29 PM   #1
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IRA investment

I am senior citizen who retired 20 years ago. I notice that my IRA which is invested in Vanguard ST bond has been going down for the past week or so. What is happening to the bond market?
Should I consider transferring this IRA deposit to the Vanguard MM which has almost no interest payment at all, or should I let it stay in the Short Term?

I remember a month or so ago, the bond market went down almost every day for about a month. Is the same thing happening now?

I have a few other Vanguard investments and am thinking of closing them and taking the loss and transfer the money to a bank CD.

Any help please?

Alice
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Old 09-05-2013, 06:48 PM   #2
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As interest rates rise, the value of bonds goes down. Anyone owning bonds, especially long term bonds, is in the same boat.

I'm hanging tight and will wait for the increased interest rate on newly acquired bonds to make up for the loss. The alternative is to take a permanent loss.
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Old 09-05-2013, 07:18 PM   #3
Confused about dryer sheets
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Originally Posted by travelover View Post
and will wait for the increased interest rate on newly acquired bonds to make up for the loss.
Please, what does that mean? Newly acquired bonds in currently held funds?
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Old 09-05-2013, 07:57 PM   #4
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Please, what does that mean? Newly acquired bonds in currently held funds?
Yes, the bond funds are constantly retiring old bonds and buying new bonds. The newer bonds pay higher interest.
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Old 09-05-2013, 08:01 PM   #5
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Quick questions: Since you have been retired quite a while, do you remember what happened the last time your bond funds dropped this much and this quickly? What did you do at that time?
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Old 09-05-2013, 10:17 PM   #6
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A short term fund should have all new bonds after not too long.

A good alternative would be an online savings account from Ally Bank or similar. 0.84% currently with no minimum amount or time period.
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Old 09-06-2013, 10:26 AM   #7
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You could consider exchanging the fund and buy laddered Tips to meet your needs.
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