need some help on my situation

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Posts: 659
Joined: Thu Mar 01, 2007 7:14 pm
Location: morgan hill ,ca

need some help on my situation

Post by looking » Thu Nov 03, 2016 1:48 pm

Hello all
I need some feedback or comment on my situation

Back ground
75 years old
15% tax bracket
10 to 15 year time horizon
Risk - moderate
Only social security is current income
50/50 AA
All Taxable
This is retirement income
Invested to all vanguard ETF
Current portfolios;
As retiree i keep cash instead of fixed income ( bond,domestic /international so on--) with A.A asset allocation 50/50, if you ask me why -i dont have answer.
I need bond now instead of cash -my question to you is that is it good time to get in for bond,or wait for good time or too late.( sound like timing ) , if ok to get in now then which bond funds ???

I'm thinking following;
Vg Municipal index bond fund
Total bond
Short term investment grade
Intermediate term investment grade
Total international
High yield
Emerging bond
Thank you in advance

Posts: 10891
Joined: Sat Oct 04, 2008 11:42 am

Re: need some help on my situation

Post by DSInvestor » Thu Nov 03, 2016 1:54 pm

Vanguard Total Bond Market VBMFX Investor VBTLX Admiral or BND ETF would be a good choice for a tax advantaged account like IRA. It is not tax efficient so may not be a good choice for a taxable account if you're in a high tax bracket.

Another good choice is Vanguard Intermediate Term Bond Index VBIIX Investor, VBILX Admiral or BIV ETF.

For taxable account, consider Vanguard Intermediate Term Tax Exempt Bond VWITX Investor or VWIUX Admiral. No ETF share class for this fund. If in high tax bracket in CA, also consider adding Vanguard California Intermediate Term Tax Exempt VCAIX Investor or VCADX Admiral (50K minimum initial purchase).

Bond funds are much less volatile than stock funds so I don't worry about whether it's a good time to buy them. In 2008, Total Stock Market was down 37% but Total Bond gained 5.15%, Intermediate Term bond Index gained 5%.

The vanguard mutual fund share classes are best held directly at Vanguard where you can buy them commission free. There could be hefty transaction fees to buy Vanguard mutual fund shares at other firms.

Posts: 19301
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: need some help on my situation

Post by Grt2bOutdoors » Thu Nov 03, 2016 2:06 pm

With a 10-15 year horizon, I would use a combination of short-term bond (BSV) and intermediate term bond (BIV) etf's. You can allocate more towards shorter end if you feel rising rate environment affects your risk tolerance or ability to tolerate market volatility, obviously that will affect the total yield from the income side of the portfolio as rates are still on the lower end at that point of the duration.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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