In today's situation where there is not much of a premium being paid for long term fixed income investments is it ok to be keeping money in money market funds at 5% rather than in bonds or bond funds.
Can the money market fund be thought of as a bond with a really short maturity period?
I currently have about 20% in money market funds, 14% in series I savings bonds and 6% in bond index funds.
Should I buy some bonds with the money market money? Only if I get a better rate or if I expect rates to drop in the future?
I do not think I want a lot of default risk. Can I do better than 5% on good quality corporate bonds? My bond index fund has 4.6% 5-year average return.
If I am 5 years from ER should I start building m 5 year bond ladder now?
Thanks.
Can the money market fund be thought of as a bond with a really short maturity period?
I currently have about 20% in money market funds, 14% in series I savings bonds and 6% in bond index funds.
Should I buy some bonds with the money market money? Only if I get a better rate or if I expect rates to drop in the future?
I do not think I want a lot of default risk. Can I do better than 5% on good quality corporate bonds? My bond index fund has 4.6% 5-year average return.
If I am 5 years from ER should I start building m 5 year bond ladder now?
Thanks.