It took me a number of years, but I finally made peace with holding bond funds in my AA viewing them as a ballast as opposed to a "must get yield/total return" investment. My 60/40 AA holds a majority of intermediate bond funds/ETFs in the fixed allocation with maybe a 1/3rd in short term treasuries.
As we all know, rising interest rates has been a prediction now for many years and my intermediate bond funds over time have performed just as I had hoped during this time. Due to the market run up, along with some new money I will be investing, I had planned to do a little early rebalancing. YTD, my intermediate bond funds are down between 2.5% - 3% with my short term treasuries returning around 0%. This all got me thinking that perhaps I should be more like 50/50 short term bond funds & intermediate? For those ballasts folks, what type of bond mix do you keep and what triggers any tweaks, fine tuning, if at all?
As we all know, rising interest rates has been a prediction now for many years and my intermediate bond funds over time have performed just as I had hoped during this time. Due to the market run up, along with some new money I will be investing, I had planned to do a little early rebalancing. YTD, my intermediate bond funds are down between 2.5% - 3% with my short term treasuries returning around 0%. This all got me thinking that perhaps I should be more like 50/50 short term bond funds & intermediate? For those ballasts folks, what type of bond mix do you keep and what triggers any tweaks, fine tuning, if at all?