All this talk about bond funds has set me to thinking about our allocations in this area.* We are age 51/47 + 3 teens, newly ER and still worrying watching everything like a hawk to see how things go in these next few crucial years.* Our current allocation is as follows:
Cash* * * * * * * * * * * * * * 1.1% (all except checking a/c at Emigrant Direct @ 4.5%)
cds* * * * * * * * * * * * * * *12.5% (yielding ave. 4.55%, maturities out to 7 yrs)
i bonds* * * * * * * * * * * * 2.6%* (thinking we'll cash these for education expenses)
VMLUX TE Ltd term muni* * *9.7%
VILQX TE Ins LT muni* * * * * 6.3%
VWALX High Yield TE muni* *6.3%
VWETX LT Inv Grade* * * * * 4% (IRA)
VBILX Int Term Ind* * * * * * *6.1%(IRA)
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* * * * * * * * * * * * * * *Total* * 48.6%
This is a percentage in fixed income that we are comfortable with.* As you see we are trying to hedge our bets as much as possible between taxable and tax exempt, bond funds and cds, and a few i bonds thrown in for good measure.*
The average yield on the cds at 4.55% is not too good as we could have cash with Emigrant Direct at 4.5%, but we've had 4 to 4.5% for some time now on our longer term cds.* The cd ladder smoothes things out.* Soon our lowest yielding cds (2.75%) will mature and we shall see 7 yrs of 6% from our Pen Fed cds.* I am struggling with putting any more in our Vanguard bond funds as I see the NAV go down almost every day.*
Comments guys?
PS forgot to say, we also have an additional 4% in a Dutch pension fund which we understand is very conservative and can be considered equivalent to bonds in Euros, can't do anything with this for another 14 years.*
By the way - I LOVE this board - who is that bozo who wants "better quality" posts?* If he wants
serious tell him to go to the Diehards.* (That's also a good board IMO, just with a completely different character from this one.)