Culture
Recycles dryer sheets
- Joined
- Apr 15, 2007
- Messages
- 491
What is your take on bond investments right now with respect to corporate bonds vs. goverment?
I have all of my bonds and cash in vanguard treasury money market, treasury short term bonds and treasury intermediate term bonds. With the "flight to quality," yields are very low (1.5%/1.8%/3.4%).
I figure that bonds have been beat down enough that it is time to switch to investment grade corporate bonds, such as Vanguard Short Term Investment Grade (6.1%) and Vanguard intermediate Term Investment Grade (7.7%). Obviously, I am taking the risk of some future defaults, however the upside is a closing of the yield spread as things level out. proving some capital gains. The vanguard high-yield corporate bond fund (junk) does not look tempting even at 13.2%. Maybe in six months.
I have reviewed this carefully (I think) and it seems like a no-brainer to me. I am planning on moving half of my bonds and cash to these investment grade corporate bond funds. The question that I am asking, is what am I missing? Whether or not your agree with this move, what arguments would your make if you were trying to convince me not to do this? I am taking about moving an amount of money in the low six figures, so I do not want to make a mistake.
Thanks for your help. You guys usually manage to raise at least one point that I have missed.
I have all of my bonds and cash in vanguard treasury money market, treasury short term bonds and treasury intermediate term bonds. With the "flight to quality," yields are very low (1.5%/1.8%/3.4%).
I figure that bonds have been beat down enough that it is time to switch to investment grade corporate bonds, such as Vanguard Short Term Investment Grade (6.1%) and Vanguard intermediate Term Investment Grade (7.7%). Obviously, I am taking the risk of some future defaults, however the upside is a closing of the yield spread as things level out. proving some capital gains. The vanguard high-yield corporate bond fund (junk) does not look tempting even at 13.2%. Maybe in six months.
I have reviewed this carefully (I think) and it seems like a no-brainer to me. I am planning on moving half of my bonds and cash to these investment grade corporate bond funds. The question that I am asking, is what am I missing? Whether or not your agree with this move, what arguments would your make if you were trying to convince me not to do this? I am taking about moving an amount of money in the low six figures, so I do not want to make a mistake.
Thanks for your help. You guys usually manage to raise at least one point that I have missed.