tominboise
Recycles dryer sheets
We have some money in a few bond funds in our IRA's. They are now in a loss position, on the order of -10.8% from our initial investment. We are holding a 60/35/5 AA. We don't plan on tapping this money for another 7.5 years, when RMD's will start for us.
Looking back this year, I should have sold these bond funds when they approached the value of our initial investment, but didn't. I am thinking that perhaps I should sell them now and ladder some of the money into CDs or Treasuries, and put the rest into cash and stock funds. This would, of course, lock in the "loss". It would be around a $120k loss.
The alternative would be to hold the funds for the next 7.5 years and hope for them to rise back 11% (or higher) over the next 7.5 years. Is this a realistic expectation (the Prognostication part of my question)(I understand the risks of market timing and also that no one can predict the future).
This doesn't account for any dividends from the funds, nor from the money that I would earn on the CDs etc, just to keep the question simple.
What would you be doing - selling and reinvesting, or hold and hope?
Looking back this year, I should have sold these bond funds when they approached the value of our initial investment, but didn't. I am thinking that perhaps I should sell them now and ladder some of the money into CDs or Treasuries, and put the rest into cash and stock funds. This would, of course, lock in the "loss". It would be around a $120k loss.
The alternative would be to hold the funds for the next 7.5 years and hope for them to rise back 11% (or higher) over the next 7.5 years. Is this a realistic expectation (the Prognostication part of my question)(I understand the risks of market timing and also that no one can predict the future).
This doesn't account for any dividends from the funds, nor from the money that I would earn on the CDs etc, just to keep the question simple.
What would you be doing - selling and reinvesting, or hold and hope?