FANOFJESUS
Thinks s/he gets paid by the post
Vanguard Short-Term Bond Index Fund Investor Shares vs. a 2 year CD for 2%
Which would you buy and why looking out two years?
Which would you buy and why looking out two years?
ST bond fund... I like to be liquid...
Nobody is wondering where he found a 2 year CD for 2%??
I do own a big chunk of VFSUX and no CD's for all the reasons above (liquidity, better returns expected vs any CD I have access to, Fed rates essentially nil into 2014). But we all have to do what's best for ourselves...
Fair enough, and I could argue both sides. I am 50/50 VFSUX & VBTLX and ordinarily I would be comfortable with all VBTLX - and was until the Fed started "committing" to holding down rates for years. I wanted to shorten duration to reduce the inevitable hit bond fund NAVs will take once the Fed increases rates - that 99% of us won't be able to act fast enough to avoid. But I realize I am giving up some yield with VFSUX in the meantime and it may all come out in the wash, hopefully no better no worse in the end?I wonder if it pays to employ this strategy if you already have a good deal invested in VBTLX? Is there a diversification in using alongside VFSUX? Is it reasonable to assume that since no rate increases until 2014 that VFSUX would be a better deal than say a brokered CD at 3% for 10 years? Or should one just go with more VBTLX and stay the course so to speak.
Sometimes I wonder if it is all worth the effort or should I just go for the sure thing and put it all in 10 year Cd's for 3 percent and be done with it .
It did give me pause, Vanguard isn't much focused on marketing are they.If I were a fund manager I don't think I'd like it if my fund's ticker ended in "SUX"...