For me, sticking to my normal buy and hold philosophy while riding downward trends with events that seem likely to continue pushing the trend further downward has not worked well for me. Hopefully this won't be a long term trend and VBTLX will turn back upward and reward you well. Time will tell.
Are You Worried About Your Bond Index Fund?
- Thread starter RHONDAVE
- Start date
For me, sticking to my normal buy and hold philosophy while riding downward trends with events that seem likely to continue pushing the trend further downward has not worked well for me. Hopefully this won't be a long term trend and VBTLX will turn back upward and reward you well. Time will tell.
corn18
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I would prefer a nice run up of the 10 year treasury to 3% and then just hang out around there for the next 35 years.
ncbill
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No guessing...my IPS says bond funds when 10 year yields 2% or more, otherwise cash equivalents (CDs, etc.)
VanWinkle
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GravitySucks
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Am I worried about bond funds? Yup.*
I moved out of AGG to a shorter term fund and to an intermediate treasuries fund. Have also bought some 1 to 3 year corporates and a 3 year MYGA. Guess im betting on a return to 'normalcy' in the next couple years.
* Also worried about equity funds and REIT funds and am not bright enough to buy individual stocks / properties.
I moved out of AGG to a shorter term fund and to an intermediate treasuries fund. Have also bought some 1 to 3 year corporates and a 3 year MYGA. Guess im betting on a return to 'normalcy' in the next couple years.
* Also worried about equity funds and REIT funds and am not bright enough to buy individual stocks / properties.
No. Can't remember who said this "If you get upset and start making drastic changes to your portfolio when one of you asset classes goes down while your whole portfolio rises, you shouldn't be managing your own money" Might have been Bernstein now that I think about it.
Nobody can predict nothing...and that absolutely includes the direction of interest rates. I too just rebalance and let the markets do what they do. Over the course of many years I have managed to do just fine. I'm not changing a thing. I have a couple close friends that panic sold in the spring 2020 market turmoil. It's very hard to recover from mistakes made during times of excessive volatility because the departures can be extremely large.
Nobody can predict nothing...and that absolutely includes the direction of interest rates. I too just rebalance and let the markets do what they do. Over the course of many years I have managed to do just fine. I'm not changing a thing. I have a couple close friends that panic sold in the spring 2020 market turmoil. It's very hard to recover from mistakes made during times of excessive volatility because the departures can be extremely large.
steelyman
Moderator Emeritus
I agree. My bond funds are squirreled away in a tax-deferred account (stocks in tax-free) and hopefully will just sit there like a fuzzy rebalanced rabbit.
Montecfo
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Seems very reasonable from the standpoint of risk/reward.
atmsmshr
Full time employment: Posting here.
Sold nearly all of my 10 year T bond fund FUAMX this past month. It was great in 2020, but can't see much upside in bond funds in the near future.
Sitting on a pile of MM funds now and trying to figure out the next move. Appreciate everyone posting their insights to help in decision making.
Sitting on a pile of MM funds now and trying to figure out the next move. Appreciate everyone posting their insights to help in decision making.
RapmasterD
Confused about dryer sheets
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No
No. My investment time horizon is not YTD. It’s 60+ years. Asset allocation with annual rebalancing is my best friend. And I meditate daily.
No. My investment time horizon is not YTD. It’s 60+ years. Asset allocation with annual rebalancing is my best friend. And I meditate daily.
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Onward
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Has Jack Bogle been dead that long? Come on, people.
The nice thing about Bonds are if you hold them to maturity you get the price they were issued at. I bought mine at 88 and it will mature at 100, so see if it is selling at a discount or at par. Most went down to par when interest rates went up, so I still have a nice gain, but am just collecting the income on it.
Ah, the good old days of the late '70s and '80s until Tall Paul Volcker broke the back of inflation. I'm old enough to remember (for a brief period) 16% CDs.
Note: I don't think we're going to get back there, although maybe gradually to 3%.
Note: I don't think we're going to get back there, although maybe gradually to 3%.
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ychuck46
Recycles dryer sheets
Not for me
I don't invest in any taxable bond fund. I have had an Intermediate Tax-Exempt fund for a number of years, but have been moving $ out of it into stock investments. I use T and other stocks with a stable dividend policy as my bond investments, if you will. With the out of control monetary policy of the Federal government it isn't worth it to invest in bond funds any longer.
I don't invest in any taxable bond fund. I have had an Intermediate Tax-Exempt fund for a number of years, but have been moving $ out of it into stock investments. I use T and other stocks with a stable dividend policy as my bond investments, if you will. With the out of control monetary policy of the Federal government it isn't worth it to invest in bond funds any longer.
That's fine if you hold actual bonds. if you own a bond fund or ETF you have no such guarantee.
I’ve got to push back on this old axiom. Stocks have drifted higher over decades because earnings increased due to innovation and rising population. What would even be the theoretical reasoning behind bonds doing well over long periods of time when starting at near record low yields?
PointBreeze
Recycles dryer sheets
This!
According to Christine Benz the formula is bond fund avg duration minus SEC yield.
Part 6: What Kinds of Bonds Should I Hold?
"...to estimate how much an investor could lose during a 12-month period if Treasury yields increased by 1 percentage point during that same 12 months, subtract a fund's SEC yield from its current duration."
lawman
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Yes I am heavily invested and worried about my bond funds. I'm not worried that prices have come down because when I went into them many years ago I knew prices would fluctuate and I really didn't care since I had no plans to sell. I hoped for higher interest rates. But now I see little hope of interest rates moving up significantly for many years and I know of no place to invest conservatively that will offer a decent return..I refuse to be forced into more equities at these valuations.. Suggestions
I too try to stay as diversified as possible via investments in index funds.
I’m no expert, but it sure seems me that bonds (and thus bond index funds) are going to be losers for the foreseeable future.
My asset allocation is 85:15, but that 15 is in GLD now.
I’m no expert, but it sure seems me that bonds (and thus bond index funds) are going to be losers for the foreseeable future.
My asset allocation is 85:15, but that 15 is in GLD now.
Dd852
Full time employment: Posting here.
@Audreyh1 I agree with you - but how often/when do you rebalance? I try to limit to twice a year and then only if my AA is out by five points or more.
GladToBeFree
Dryer sheet aficionado
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Yep, diversify diversify diversify to steal a philosophy from the real estate people.
ProGolferWannabe
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Would holding individual bonds in a “ladder” where you have equal amounts maturing in, say, 1 year, 2 years, 3 years, etc. be a reasonable alternative to holding a bond fund? It would eliminate a lot of interest rate risk for the bonds closest to maturity, so if you need to sell, some (hopefully all or most) of your principal would not be at risk; if you did not need the cash, you could reinvest at the long end of the ladder and have a portfolio of bonds that mature on a regular schedule. I guess I was thinking with a bond fund, if your fellow investor panic, the fund might have to sell at a loss even if you were content to stand pat.
