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Bond mutual funds
Old 08-03-2010, 02:32 PM   #1
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Bond mutual funds

We have a chunk of cash sitting around doing nothing both in & out of IRAs. I am considering 3: Fidelity GNMA Fund (FGMNX), Fidelity Floating Rate High Income Fund (FFRHX), and PIMCO Real Return CL D (PRRDX).

We use Fidelity, no surprise given the list. I we are 70+ so mutual funds would work better for us than bonds themselves. And, as we are in the withdrawal phase of our lives I want to minimize risk (particularly principal risk) in this portion of our investments.

My thought is to divvy the pot among these three.

Am I overlooking anything similar that is better?

Duck bjorn.
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Old 08-03-2010, 03:09 PM   #2
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Just keep in mind the NAV of your fund may drop if interest rates begin to creep up. It all balances out (my understanding) if you stay invested in the funds long enough. But your principal could possibly look damaged in the short run. You are probably aware of this but since you have shown concern about principal wanted to warn you.

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Old 08-03-2010, 03:16 PM   #3
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My concern is loss from bonds imploding, but thanks for reminding me to look at maturities.
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Old 08-03-2010, 04:14 PM   #4
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What is wrong with a CD? 3% yield for 5 years at pen fed.
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Old 08-03-2010, 07:50 PM   #5
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I'd recommend checking this out of your local library: The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today (9780312353636): Larry E. Swedroe, Joseph H. Hempen: Books before making any big decisions.

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