Bond index funds ( to bond fund or not)

[big-papa]

The bond index funds tracking the BBgBarc US Agg Bond TR USD hold about 70% US government debt including treasuries, and about 30% investment grade corporate debt. They generally behave quite well during stock downturns. So good enough for me.

Yep - it's the most common choice and a perfectly fine one indeed! As I mentioned above, bonds can behave well during downturns, especially the last two big ones. That hasn't always been the case, so I tend to think of them more as just another uncorrelated asset. Even with that said, treasuries tended to do even better during those 2 downturns, but I'm not counting on it. For me, it's just a way of completely separating out my bonds from the corporate world, since I already have plenty of coverage via my stocks.

 

[Spock]

Re: TIPS and Treasuries:
Anybody buying these through your broker instead of treasurydirect.gov??
Maybe I'm looking in the wrong place, but I see typical minimum purchase quantities of $200K+ at the broker with occasional smaller quantities on the secondary market.

 

[OldShooter]

Re: TIPS and Treasuries:
Anybody buying these through your broker instead of treasurydirect.gov??
Maybe I'm looking in the wrong place, but I see typical minimum purchase quantities of $200K+ at the broker with occasional smaller quantities on the secondary market.

I am not a big bond guy but I have bought t-bills on the auction, new issue brokered CDs and used TIPS through the Schwab bond desk. Great guys. Easy transactions. 800-824-4027 I suggest that you call them with your question. They probably have enough industry knowledge to tell you about at least some the competiion's rules and practices.

I have no interest in screwing around with a treasurydirect.com account and consequent funds transfers. I have never even looked into it.

 

[njhowie]

Re: TIPS and Treasuries:
Anybody buying these through your broker instead of treasurydirect.gov??
Maybe I'm looking in the wrong place, but I see typical minimum purchase quantities of $200K+ at the broker with occasional smaller quantities on the secondary market.

I buy them one at a time frequently through Fidelity and Merrill.

If you're looking at the secondary market screen on Fidelity, it will only show the best price/yield - which generally requires a larger purchase. However, if you click on the Depth of Book icon towards the right, it will show all of the other offers.

At auction, similarly, you're free to purchase as few as one.

 

[COcheesehead]

Re: TIPS and Treasuries:
Anybody buying these through your broker instead of treasurydirect.gov??
Maybe I'm looking in the wrong place, but I see typical minimum purchase quantities of $200K+ at the broker with occasional smaller quantities on the secondary market.

Fidelity has an easy interface to buy new or secondary issues. The smallest amount I found just doing a quick search was 25 bonds. So not $200k, but still a reasonably high minimum.

 

[Spock]

Fidelity has an easy interface to buy new or secondary issues. The smallest amount I found just doing a quick search was 25 bonds. So not $200k, but still a reasonably high minimum.

I just used NJHOWIE's tip of buying a 100K minimum treasury from the Fidelity "depth of book" icon and bought 22K maturing in July to play with. I could have bought only one.

 

[COcheesehead]

I just used NJHOWIE's tip of buying a 100K minimum treasury from the Fidelity "depth of book" icon and bought 22K maturing in July to play with. I could have bought only one.

Nice!

 

[COcheesehead]

I just used NJHOWIE's tip of buying a 100K minimum treasury from the Fidelity "depth of book" icon and bought 22K maturing in July to play with. I could have bought only one.

I just checked that out myself. What a great tip.