Need help, making changes Bond Portfolio

[rkser]

Need help, making changes in Bond Portfolio

Question - I am thinking of exchanging a portion(1/4) of VBTLX to a short term bond fund in my tax deferred accounts ??

As I will start withdrawal in a few years from the Bond Funds, considering the Interest Rate environment & the pathetic Bond yields, will this be an appropriate move.

All I have in our Tax deferred are VBTLX 80% & VTABX 20%, with all stock funds in taxable.

If you agree, which Short Term Bond Funds would be advised ?

Thank you in advance .

 

[VanWinkle]

Question - I am thinking of exchanging a portion(1/4) of VBTLX to a short term bond fund in my tax deferred accounts ??

As I will start withdrawal in a few years from the Bond Funds, considering the Interest Rate environment & the pathetic Bond yields, will this be an appropriate move.

All I have in our Tax deferred are VBTLX 80% & VTABX 20%, with all stock funds in taxable.

If you agree, which Short Term Bond Funds would be advised ?

Thank you in advance .

I agree with your thoughts for short term spending needs. You could just do a high yield savings account(1%) or VSCSX is a short term bond fund I have used in the past. With the interest rates where they are, I might even consider an ultra short(1 year duration) bond fund like VUBFX

https://investor.vanguard.com/mutual-funds/profile/VUBFX

Good luck to you,

VW

 

[mrfeh]

My preferred shorter duration Vanguard bond fund is VFSUX.

 

[pb4uski]

I'm parked in VSGDX.... 0.96% 30-day SEC yield, 1.29% distribution yield, 2.2 year duration, negligible credit risk.... not gaga about it but it seems to be one of the best looking horses in the glue factory.

 

[rkser]

Thanks everyone to chime in.

Another question is, as the Fed usually increases the rate in 0.25 increments.

Does it not give us enough time to move from VBTLX to a short Term Bond Fund or VSGDX then ?
or would you suggest I would rather change the Bond Fund now.

I start withdrawal plan next year & will probably first spend the cash in online savings for first two years, then roughly in yr 2023 I will be using the Bonds for our living expenses.

Please advice, I do not know much about this issue or in Bonds in general.

Thanks

 

[mrfeh]

Thanks everyone to chime in.

Another question is, as the Fed usually increases the rate in 0.25 increments.

Does it not give us enough time to move from VBTLX to a short Term Bond Fund or VSGDX then ?
or would you suggest I would rather change the Bond Fund now.

I start withdrawal plan next year & will probably first spend the cash in online savings for first two years, then roughly in yr 2023 I will be using the Bonds for our living expenses.

Please advice, I do not know much about this issue or in Bonds in general.

Thanks

Don't try to time the market. Choose your allocation and stick to it.

 

[rkser]

As I am unable to decide, will stick with VBTLX for now as I have been with them for a long time.

The Fed decreased the rate to help the recovery of the virus related Job losses & the resulting down economy, the economy will take a year at least to get back up & running.
Even if the increase in the interest rates catch us by surprise the total return of the The Bond Index may not go down much, as the Total return is the price of the Bond + its Yield and as the individual Bonds with lower yields mature the replacing newer Bonds with higher rates will gradually get the total return up.

I keep hearing Bonds are for safety & to focus the risks with the equities. Bonds are & were always very difficult for me to understand.

Thanks everyone for chiming in.