I know bonds get banged around here quite a bit and you have those, like me, who have made peace (although, continue to question) that bonds are a ballast and then others who have punted bonds in this low yield/inflationary risk environment. Over the last few years I have continued to simplify my generally 60/40 AA with a mix of equity (i.e. small/large/foreign growth & value) funds and mid/short term bond funds. I do have a smidgeon of preferreds & REIT funds. As a TR investor, I took a peek at my YTD total returns of my short & mid term bonds and they are returning 0% & -2.5% respectively, with preferreds hovering around 1%. This is all without any big Fed action. This has me scratching my head wondering if my bond allocation will still act as a ballast for the foreseeable future?? Should my bond allocation start including more inflationary hedges such as more REIT holdings, commodities, gold, other?? Should I allocate more into my HY Savings account as interest rates rise as part of my ballast? I have a little bit of new $$ I was going to throw into my fixed allocation, so I am having a hard time throwing it in bonds... hence, the impetus of this post.
As always, I will probably just stand there and do nothing!
Is it DIFFERENT this time What say you?
As always, I will probably just stand there and do nothing!
Is it DIFFERENT this time What say you?