all weather Total portfolio adjustment

[perinova]

I have been a believer of the Total Market / Total Bond and Total International portfolio, and it served me well up to now.
However I am getting concerned about asset prices and specially the interest rate climb, which will surely put a damper on the Total Bond fund.

I have to say that there is a while I heven't checked my asset allocation so my bond fund is probably somewhat under allocated.

Any advice? Do you think I should stay the course or is there some alternative to the Total Bond Market Fund, such as going shorter term? It seems that a lot of you are making changes.

I am using the same allocation in tax defrred accounts as in the Taxable accounts.

Thanks.

 

[COcheesehead]

All weather should mean all weather, right?

 

[Out-to-Lunch]

I have to say that there is a while I heven't checked my asset allocation so my bond fund is probably somewhat under allocated.

Well, go ahead and check. Bond funds are down by similar amounts as stock funds, so I wouldn't be surprised if you AA is still close to your target. (Mine is.)

 

[daylatedollarshort]

It seems that a lot of you are making changes.

I switched to a dividend fund only early in the year and sold all the bond funds and any target fund with bonds. I put the bond fund money mostly in a short term Treasury ladder and will start buying more TIPS soon as the Treasuries mature and rates go up even more. I only have stable value, individual bonds and CDs we will hold to maturity, so the change in interest rates hasn't impacted the redemption values. The dividend fund hasn't gone down too much, leaving our portfolio in pretty good shape right now. I'm hoping the real yield on TIPS goes to 2%. At 0% real yield they provide a 3.33% safe withdrawal rate over 30 years, and at 1.3% the SWR would be 4%. At our current ages that should be more than enough.

 

[target2019]

I have been a believer of the Total Market / Total Bond and Total International portfolio, and it served me well up to now.
However I am getting concerned about asset prices and specially the interest rate climb, which will surely put a damper on the Total Bond fund.

I have to say that there is a while I heven't checked my asset allocation so my bond fund is probably somewhat under allocated.

Any advice? Do you think I should stay the course or is there some alternative to the Total Bond Market Fund, such as going shorter term? It seems that a lot of you are making changes.

I am using the same allocation in tax defrred accounts as in the Taxable accounts.

Thanks.

I was surprised by the wider range of discussion on B-Heads about bonds. There was a time when you'd get a steady reply of TSM, TBM, etc., and nothing else required. Lately there is a noticeable change to shorter duration, MYGA, CDs, and so on.

About 5 years ago we started using Wellesley VWIAX for some of our bond AA. When an inheritance came, we only invested in 2-yr CD's and high-interest account.

Can't really tell you what to do, though.

 

[arcyallen]

All weather should mean all weather, right?

I agree. I'm a big fan of laying out a well thought out plan (simple or complicated) and then sticking with it. Historically investors are horrible...well, investors. We buy when we should sell and sell when we should buy and move when we should stay still. Usually if you have the urge to make a change it'll prove to be the wrong move.

 

[Rianne]

Our thought is to preserve the principal with some guaranteed interest in our bonds for the length of terms we know. Are bond funds going to perform? Are they truly a hedge? We are 60/40

Historical Bond Index portfolio (tIRA): We've been reinvesting dividends in the bond funds and have not WD. Will start WD 2023

10 yr. 3.7%
5 yr 3.4%
3 yr 3.1%
1 yr -6.3%
YTD -9%

Historical Stock fund (after-tax)

10yr 8.6%
5 yr 9.7%
3 yr 10.1%
1 yr -3.6%
YTD -13%

Staying in after-tax stock index funds.
Moving to laddered treasuries and CDs in tIRA