Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Thinking of Moving Fixed Income AA to CDs. Advice Please
Old 09-21-2015, 07:33 AM   #1
Recycles dryer sheets
 
Join Date: Sep 2012
Location: Madison
Posts: 161
Thinking of Moving Fixed Income AA to CDs. Advice Please

Hello,

I am not that financially astute and was thinking of moving the 49% of our nest egg that is not equities into laddered CDs. Does anyone have a good reason not to? Of this 49% we have 28% in four bond funds we can place in CDs. Here's the AA of them presently, based on seeing an hourly CFP, a Fidelity advisor and following Bob Brinker's newsletter, however, I'm worried that if interest rates rise we will lose value. Also, High Yield can be volatile and acts more like stocks. Some advisors say that it should be listed in equities in one's AA. Thoughts? Thanks.

7.15% VFISX VANGUARD SHORT TERM TREASURY Average Duration = 2.3 Yrs

7.16% VFSTX VANGUARD SHORT TERM INVESTMENT GRADE BOND FUND Average Duration = 2.5 Years

7.08 VWEHX VANGUARD HIGH YIELD CORPORATE BOND FUND Average Duration = 3.9 Years

6.98 VIPSX VANGUARD INFLATION PROTECTED SECURITIES
__________________

__________________
Cheesehead 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 09-21-2015, 08:01 AM   #2
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
Where is the other 21% of your FI? Your durations look pretty short and this doesn't look like a bad mix of bond funds to me. Even if rates rise, its the velocity of change that will matter, and I suspect any increases will be small and gradual over time and could very well rise and then fall again depending on economic conditions.
__________________

__________________
Doing things today that others won't, to do things tomorrow that others can't. Of course I'm referring to workouts, not robbing banks.
DFW_M5 is offline   Reply With Quote
Old 09-21-2015, 08:06 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Houston
Posts: 1,435
As long as you don't panic sell and your duration is not very long, rising interest rates are actually better for the bond fund investor over the long run. And forecasting interest rates is not that easy.
__________________
soupcxan is offline   Reply With Quote
Old 09-21-2015, 08:15 AM   #4
Recycles dryer sheets
 
Join Date: Sep 2012
Location: Madison
Posts: 161
Hi DFW_M5,

The rest is in CDs and 2% is in I Bonds. The other 50% is in index equity funds
__________________
Cheesehead is offline   Reply With Quote
Old 09-21-2015, 08:30 AM   #5
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,982
Quote:
Originally Posted by Cheesehead View Post
Hi DFW_M5,

The rest is in CDs and 2% is in I Bonds. The other 50% is in index equity funds
Given that, I think your FI allocation looks like a good conservative mix, and I see no reason to make it more conservative.
__________________
Doing things today that others won't, to do things tomorrow that others can't. Of course I'm referring to workouts, not robbing banks.
DFW_M5 is offline   Reply With Quote
Old 09-21-2015, 08:35 AM   #6
Recycles dryer sheets
 
Join Date: Sep 2012
Location: Madison
Posts: 161
Thanks!
__________________

__________________
Cheesehead 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
Moving IRA CDs from bank to bank Rpharmer FIRE and Money 19 02-19-2014 11:14 PM
Thinking of SS as a fixed income portion of portfolio dtbach FIRE and Money 39 09-15-2013 01:00 PM
Thinking of moving from bonds to CDs pb4uski FIRE and Money 42 05-15-2013 02:28 PM
UK fixed ISA better than US CDs nun FIRE and Money 0 03-31-2011 11:11 AM

 

 
All times are GMT -6. The time now is 06:31 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.