Need advice on bond fund investing

[ranchoparque]

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.

 

[targatom2019]

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.

 

[audreyh1]

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.

 

[MuirWannabe]

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 you’ve heard about related to munis? I’m assuming you mean differing risk for munis as compared to risks that apply to any bond type in particular?

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

Thanks.

Muir

 

[ranchoparque]

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

I’ve got a good chunk of my portfolio in VWIUX but am not aware of any special risk I’m 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/m...olding-the-bag-for-pension-debacle-2017-01-16

 

[MuirWannabe]

Ok, thanks. I feel okay with VWIUX since it’s diversified across multiple municipalities.