How to reenter into bonds?

[wanaberetiree]

Hello all,


On start of the coronavirus snafu I've sold my 'CA muni position Vanguard California Intermediate-Term Tax-Exempt Fund Admiral Shares' (VCADX)

I am not regretting as muni future seems uncertain to me and I also wanted to sit on ca$h.

However sooner or later I want to get back to bonds to maintain my AA.

Now wonder where to ?

Working idea - combination of BND, BNDX (as vanguard advisor suggests) and maybe plus junk bonds.

Ideas? Anybody in the same line of thinking ?


Stay safe !

 

[Freedom56]

None of the above.

Buy individual bonds of strong technology, biotechnology, pharma, and telecom companies when they go on sale. That is the safest way to buy corporate bonds.

 

[pb4uski]

For long-term buy and hold investors, I'm not so keen on bonds these days. First, there is higher credit risk as a result of the coming recession. Second, with interest rates so low I am concerned with interest rate risk.

I've been investing in credit union CD specials, but it requires a lot of patience. In the meantime, park the money in an online savings account... they currently pay about 1.4-1.7% and are FDIC insured so no credit risk and no interest rate risk.

ETA: Needless to say, keep the FDIC insurance limits in mind.

 

[Montecfo]

Go to Morningstar. Lots of great tools there, a lot is free.

I would avoid ETFs. During the selloff many traded at a discount to their holdings-exactly what you do not want in a time of disruption.

And go for quality. junk bonds trade like equity. Consider them part of your equity allocation .

Also watch out for funds that use leverage. That increases your risk. Easy to identify using Morningstar.

Good luck.