Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Need advice on bond fund investing
Old 01-17-2018, 07:20 PM   #1
Dryer sheet aficionado
 
Join Date: Jan 2008
Posts: 32
Need advice on bond fund investing

I have some questions relating to bond fund investing.


In my taxable account I currently have most of my bond fund investments in Vanguard's California Intermediate Muni Bond (VCADX) and the Limited Term Tax Exempt Fund (VMLTX). I would be in the 22% Marginal Tax Rate in 2018.


I've heard that there may be some risk for munis so I am considering putting new money into VBILX which is an Intermediate term bond index fund which invests in government and corporate bonds. Does this make sense? The duration is 6.4 years and I don't see the need to withdraw from the fund for at least 7-10 years. Or perhaps there is no problem with adding new money to the bond funds I already have.


I have an adequate emergency fund in cash. My overall asset allocation is about 40/55/5. Most of my living expenses are covered by pension/ss/annuity income.
__________________

ranchoparque 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!

Old 01-17-2018, 09:50 PM   #2
Recycles dryer sheets
 
Join Date: Mar 2016
Posts: 165
I have over 600k+ in muni bonds and only buy INSURED A rated bonds. I am 48 and I build a bond ladder with maturity dates out to year 2035 max. Each bond is 5K and I don't buy more 15k for each muni.
__________________

vipertom1970 is offline   Reply With Quote
Old 01-17-2018, 10:17 PM   #3
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: 23,519
Quote:
Originally Posted by ranchoparque View Post
I have some questions relating to bond fund investing.


In my taxable account I currently have most of my bond fund investments in Vanguard's California Intermediate Muni Bond (VCADX) and the Limited Term Tax Exempt Fund (VMLTX). I would be in the 22% Marginal Tax Rate in 2018.


I've heard that there may be some risk for munis so I am considering putting new money into VBILX which is an Intermediate term bond index fund which invests in government and corporate bonds. Does this make sense? The duration is 6.4 years and I don't see the need to withdraw from the fund for at least 7-10 years. Or perhaps there is no problem with adding new money to the bond funds I already have.


I have an adequate emergency fund in cash. My overall asset allocation is about 40/55/5. Most of my living expenses are covered by pension/ss/annuity income.
I think diversifying is a good idea. I have only a portion of my bond allocation is muni bond funds.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 01-18-2018, 02:14 PM   #4
Thinks s/he gets paid by the post
MuirWannabe's Avatar
 
Join Date: Oct 2009
Posts: 1,067
Quote:
Originally Posted by ranchoparque View Post
I have some questions relating to bond fund investing.



I've heard that there may be some risk for munis so I am considering putting new money into VBILX which is an Intermediate term bond index fund which invests in government and corporate bonds.

Can you elaborate on the risk youíve heard about related to munis? Iím assuming you mean differing risk for munis as compared to risks that apply to any bond type in particular?

Iíve got a good chunk of my portfolio in VWIUX but am not aware of any special risk Iím carrying by owning this over bond funds in general.

Thanks.

Muir
__________________
ďOf all the paths you take in life, make sure a few of them are dirt.Ē John Muir
MuirWannabe is offline   Reply With Quote
Old 01-18-2018, 03:53 PM   #5
Dryer sheet aficionado
 
Join Date: Jan 2008
Posts: 32
Quote:
Originally Posted by MuirWannabe View Post
Can you elaborate on the risk youíve heard about related to munis? Iím assuming you mean differing risk for munis as compared to risks that apply to any bond type in particular?

Iíve got a good chunk of my portfolio in VWIUX but am not aware of any special risk Iím carrying by owning this over bond funds in general.

Thanks.

Muir
The risk is usually connected to municipal problems such as bankrupt city government in places like Stockton, CA and San Bernardino CA.

Here is a link to one article: https://www.marketwatch.com/story/mu...cle-2017-01-16
ranchoparque is offline   Reply With Quote
Old 01-18-2018, 04:49 PM   #6
Thinks s/he gets paid by the post
MuirWannabe's Avatar
 
Join Date: Oct 2009
Posts: 1,067
Ok, thanks. I feel okay with VWIUX since itís diversified across multiple municipalities.
__________________

__________________
ďOf all the paths you take in life, make sure a few of them are dirt.Ē John Muir
MuirWannabe 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
Deciding Between Intermediate Bond Fund and Stable Value Fund sengsational FIRE and Money 12 06-13-2013 09:04 PM
Prime Money Market Fund vs. Total Bond Fund two4theroad FIRE and Money 2 04-10-2008 01:46 PM
need fund advice for friend new to investing igsoy FIRE and Money 4 12-12-2007 01:51 PM
Bond Fund and Money Market Fund Tax Treatment Question terminator FIRE and Money 4 03-01-2007 07:56 AM
TIPS: Buy Bond or Bond FUND? Pros & Cons please! Jane_Doe FIRE and Money 67 11-20-2006 09:29 PM

» Quick Links

 
All times are GMT -6. The time now is 05:44 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.
×