CaseInPoint
Recycles dryer sheets
I'm considering buying a decent amount (at least in my terms) of Vanguard's California Intermediate-Term Muni fund - VCADX - for tax purposes, and to stick with my AA, which is crying out for more bonds. (I am a resident of CA).
With interest rates so low and an economic recovery likely in the next year or two, it's a safe bet that interest rates (and inflation) will rise in the not-too-distant future. That means that bond prices will decline. True, the total yield will remain the same but, still, in a fund like this, the price is likely to drop, no?
The same considerations must hold true for anyone considering bond funds these day. Or so I think...
Setting aside the issues of California in particular, do you think it's a good idea to invest in bond funds these days, considering the likelihood that interest rates will rise?
With interest rates so low and an economic recovery likely in the next year or two, it's a safe bet that interest rates (and inflation) will rise in the not-too-distant future. That means that bond prices will decline. True, the total yield will remain the same but, still, in a fund like this, the price is likely to drop, no?
The same considerations must hold true for anyone considering bond funds these day. Or so I think...
Setting aside the issues of California in particular, do you think it's a good idea to invest in bond funds these days, considering the likelihood that interest rates will rise?