My bond allocation

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jerome99
Posts: 193
Joined: Tue Jan 10, 2012 8:38 am

My bond allocation

Post by jerome99 » Mon Jul 15, 2013 2:03 pm

Currently my wife and I have our bond allocation split up between TSP G fund and the Vanguard Total Bond Market Index.

The TSP makes up 73% of all bond holdings. Do I need to consider making any adjustments knowing such a significant amount of my bond exposure is in government bonds?

I am not looking to do anything out of fear or attempting to guess what rates will do, etc, but for the long haul (30 years til retirement) can my current bond allocation be improved on?

Jim180
Posts: 322
Joined: Wed Jun 26, 2013 9:47 pm

Re: My bond allocation

Post by Jim180 » Mon Jul 15, 2013 2:08 pm

I would look upon that G Fund as a Stable Value Fund, not really a bond fund that can lose money. If you have the Total Bond Market that is fine.

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ogd
Posts: 4854
Joined: Thu Jun 14, 2012 11:43 pm

Re: My bond allocation

Post by ogd » Mon Jul 15, 2013 2:10 pm

The TSP G fund is a sweetheart deal that the rest of us would love to have. The government assumes all your interest rate risk, and it has no credit risk under our monetary system in spite of what letters a single misguided ratings agency might have put on it.

If I were you, I'd put the entire FI allocation in G, until such time as the TBM yields considerably more or the G fund falls behind inflation (if ever). And I'm saying this as a fan of TBM, generally speaking.

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