For a number of years, the fixed income side of my portfolio has been mostly invested in high quality, relatively short term bond funds -- a mix of US corporate, global, muni, and TIPs. But I feel like I am not being compensated well for the risk in the bond funds. That risk is low, but the returns have also very been low -- and in some funds, for some periods of time, negative. So I am in the process of moving the fixed income side of the portfolio toward CDs and treasuries (more CDs). I feel like if this side of the portfolio can generate 2.5% to 3% returns (these days; it will obviously vary) with essentially zero risk, it is doing its job. The main goal on this side is capital preservation. Of course, I am happy to take what return is available, but don't want or need risk on the fixed income side of the portfolio. The other 50-55% of my portfolio is in equities and that is where I will take the risk and seek return.
I am interested in any comments you all might have about my idea of moving the fixed income side away from bond funds and toward relatively short term CDs and treasuries. Thanks.
I am interested in any comments you all might have about my idea of moving the fixed income side away from bond funds and toward relatively short term CDs and treasuries. Thanks.
Last edited: