Are intermediate bonds funds a good place to be in this economy?

Question

This is part of a diversified portfolio.

Answer 1

This is a question that has a very subjective answer. All I can really say on this is what you need to consider in making such a decision. Such a fund is going to yield about 5% to 8% which will be fully taxed. The actual yield will depend on the quality of the holdings. Taxes and inflation will consume almost all of your return. At 5% you will actually be running in the red. Compared to equities currently running a little in the red might actually be the lesser of two evils. Certainly, those who currently hold t-bills are of that oppinion.

Answer 2

The answer is Yes and No. As your Bond Asset Allocation I would be in Short ot Intermediate Bonds - Possibly the Total Bond Market Mutual Fund and maybe some TIPS if you are concerned with inflation.

I would not suggest however being 100% Bonds. I like low cost Passively Managed Stock Index Mutual Funds. and diversified with bonds to decrease the volatility and risk of my portfolio.

Vanguard is a good company to so this. Remember low fees and no loads.

Good Luck Gerry

Answer 3

Intermediate term bonds are a good place to be in (almost) any economy. And are a good diversifier in an all stock portfolio. Plus they provide some safety and return in a stock market that seems to be going nowhere (for now anyway).

Answer 4

This shouldn't be an issue. As part of a good "asset allocation" it's time will always be here.

A well balanced "asset allocation" insures you'll always have part of your portfolio in the right place.

BTW: If anyone knew the answer to your question..... they'd make the richest person on earth look poor.

Answer 5

Bond funds of any kind are never a good place to be. Ever. Think about it. With the market down shouldn't you be buying stock mutual funds. If you already own stock mutual funds why would you sell them now with the market down. You need help. Please read my profile.