- Joined
- Sep 10, 2006
- Messages
- 4,073
Hi all,
My brother is re-working his 401K (getting out of hi-cost funds) and needs to choose some bond funds. He has set his asset allocation for 70% stock, 30% bond.
Choosing bond funds is a weak area for me. We personally don't have many selections to choose from in our 401K's, so I have just stuck with what is offerred that has reasonable expenses: an intermediate, high quality bond fund. My brother has a TON of possible funds to choose from, however, in his 401K. I was hoping for input from the group. Here are the categories from which he can choose (multiple fund offerings within each):
Ultrashort Bond
Short Government
Short-Term Bond
Intermediate Govt
Intermediate-Term Bond
Inflation-Protected Bond
Long Govt
Long-Term Bond
Multisector Bond
High Yield Bond
Bank Loan
World Bond
Emerging Markets Bond
How would you recommend he set up his bond allocation? Stick with one group? Choose 2 or 3 to split up the allocation between? Why/why not? Once he sets up his asset allocation for bonds we will then look at the particular funds in detail.
Thanks for your input!
P.S. He is in hid mid 50's, and risk tolerance I think could be described as fairly aggressive. No immediate plans to retire early; has one in college and another one still in highschool that he needs to put through.
My brother is re-working his 401K (getting out of hi-cost funds) and needs to choose some bond funds. He has set his asset allocation for 70% stock, 30% bond.
Choosing bond funds is a weak area for me. We personally don't have many selections to choose from in our 401K's, so I have just stuck with what is offerred that has reasonable expenses: an intermediate, high quality bond fund. My brother has a TON of possible funds to choose from, however, in his 401K. I was hoping for input from the group. Here are the categories from which he can choose (multiple fund offerings within each):
Ultrashort Bond
Short Government
Short-Term Bond
Intermediate Govt
Intermediate-Term Bond
Inflation-Protected Bond
Long Govt
Long-Term Bond
Multisector Bond
High Yield Bond
Bank Loan
World Bond
Emerging Markets Bond
How would you recommend he set up his bond allocation? Stick with one group? Choose 2 or 3 to split up the allocation between? Why/why not? Once he sets up his asset allocation for bonds we will then look at the particular funds in detail.
Thanks for your input!
P.S. He is in hid mid 50's, and risk tolerance I think could be described as fairly aggressive. No immediate plans to retire early; has one in college and another one still in highschool that he needs to put through.