One Last Beginner Question Regarding Bonds

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spdoublebass
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One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sat May 20, 2017 10:10 pm

I recently opened a Roth IRA. Retirement is 30+ years away.
My allocation is: 80/20 stocks/bonds.

My portfolio is:
20% VTI Total Stock Martket
20% VBR Small Cap Value
20% VXUS Total International
20% VSS International Small Cap
20% BND Total Bond Market


My question has to do with the Bond portion of my portfolio.

I HAVE read many of the posts in the forums. I admit, I do not understand much and am still learning.

Right now I only have BND. I have read about other bond funds that were recommended in the forums.
Specifically:
BNDX Total International Bond Market
VCIT Intermediate Term Corporate Bond
BIV Intermediate Term Bond
VGIT Intermediate Term Government Bond
VWOB emerging markets bond
Bsv Short Term treasury
Vcsh short term corporate

From what I've read, people who recommend these bond funds may be doing so for reasons that do not effect me. Since I am investing through a Roth IRA, taxes are not an issue for example.

Also, many of these funds "may" produce return larger then BND, but that is not why I invest in BND. For me, I like BND because when/if the market crashes I will have them to help buy more stocks to return to my asset allocation.
With these funds listed above, most of them were affected more then BND in 2008 for example.

My question is:
Is there another Bond fund that compliments BND, or is BND really all I need?
Should I consider any of the other funds at all and Possibly bring them in to the Bond portion of my portfolio?
The ones I would consider (based on my limited knowledge) would be the short term bonds, BSV and VCSH. This way if the market tanks, these bonds would be least affected.
Maybe have:
10% BND
5% BSV
5% VCSH

Is this logical? I'm not trying to over complicate it, but as stated before I would like the bonds to stay the least effected by a tanking market so I could rebalance.

Again, I'm asking for advice, I know I still have much to learn about bonds in general. Thank you in advance for your replays.
Last edited by spdoublebass on Sun May 21, 2017 2:26 am, edited 2 times in total.

John Laurens
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Re: One Last Beginner Question Regarding Bonds

Post by John Laurens » Sat May 20, 2017 10:35 pm

BND is my only bond holding. The portfolio experts at Vanguard recommend around 20% of bond portfolio in international bonds. You must have a strong conviction that small caps are going to outperform the overall market cap weighted index? Small caps make up roughly 60% of your equities. Market cap neutral is 10%.

Regards,
John

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sat May 20, 2017 10:40 pm

John Laurens wrote:BND is my only bond holding. The portfolio experts at Vanguard recommend around 20% of bond portfolio in international bonds. You must have a strong conviction that small caps are going to outperform the overall market cap weighted index? Small caps make up roughly 60% of your equities. Market cap neutral is 10%.

Regards,
John
Thanks for the reply. My stock allocations are based on Paul Merrimanns Ultimate buy and hold portfolio. Also, the article in the forum about going from 8 (LCB, LCV, SCB, SCV, + the same 4 in international) down to 4 (LCB, SCV, inter. LCV, inter. SCB)

I know Vanguard recommends 20% BNDX, but I just didn't know if it performs the same function as BND does....
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Re: One Last Beginner Question Regarding Bonds

Post by TheJoker » Sat May 20, 2017 10:42 pm

Read Bogle's books, he has been investing for 60 plus years. Most of us have not.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 2:32 am

I guess I'm also asking if im only buying BND for the security, why not just go with short term bonds.... or am I missing something (which I imagine I am).
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Re: One Last Beginner Question Regarding Bonds

Post by lack_ey » Sun May 21, 2017 3:37 am

spdoublebass wrote:Also, many of these funds "may" produce return larger then BND, but that is not why I invest in BND. For me, I like BND because when/if the market crashes I will have them to help buy more stocks to return to my asset allocation.
With these funds listed above, most of them were affected more then BND in 2008 for example.

Is there another Bond fund that compliments BND, or is BND really all I need?
Should I consider any of the other funds at all and Possibly bring them in to the Bond portion of my portfolio?
The ones I would consider (based on my limited knowledge) would be the short term bonds, BSV and VCSH. This way if the market tanks, these bonds would be least affected.
Maybe have:
10% BND
5% BSV
5% VCSH
Okay, if your conception of "Why bonds?" is to own something that is not-stocks, cash and other assets serve that purpose as well. Actually, you can think of cash as zero-duration fixed income. That's security in some sense.

You also seem to be indicating a desire for something that's furthermore not down when stocks crash. In this case you don't want corporate bonds. Every stock market crash is different, but many of the worst ones are related to financial crises, and typically you don't want to be holding corporate bonds when everybody is freaking out about the stability of the financial system. There is sometimes a flight to quality, pushing up the prices of Treasury bonds. Again, this won't be every stock market crash by a long shot, but if that's your motivation then stick to Treasuries.

BND (total bond, as in US market investment grade, nominal, non-tax-exempt, etc. broad market bonds) is broadly diversified but has a little bit of credit risk. You don't want to be adding VCSH (short-term corporate bonds) to that, based on everything else you're saying. Also, you know BSV (short-term bonds) contains corporate bonds, more or less overlapping with all of VCSH, right? Weird mix there, though not out of the mainstream or bad per se.
spdoublebass wrote:I know Vanguard recommends 20% BNDX, but I just didn't know if it performs the same function as BND does....
BNDX (USD-hedged investment grade ex-US bonds) does more or less the same thing as BND (total bond), except it costs more. It provides some very mild diversification of term risk, as rates in different countries are correlated but not perfectly so. That is, rates could spike in the US and hurt BND but without rates going up as much elsewhere, so BNDX might not be losing money. Or the reverse.

The currency hedging at the moment adds a return to the underlying international bond yields, as US short-term rates are higher than in most of the other developed markets. But at best this is kind of a "sure, I guess" kind of investment. Currently maybe more like "meh, I'll pass."
spdoublebass wrote:I guess I'm also asking if im only buying BND for the security, why not just go with short term bonds.... or am I missing something (which I imagine I am).
For security in terms of short-term movements, volatility, predictability, etc., shorter term is better. And taking that down to the logical conclusion, why not cash, as mentioned earlier?

The reason for a long-term investor to invest in longer-term bonds (not a speculator betting on a price increase in the short term, planning to sell later) is for the expected yield advantage over the holding period. All else equal the longer-term bonds are riskier and should probably return more on average.

I'm not a huge fan of allocating fixed income based on behavior in certain stock market crashes that are pretty rare to begin with. It also matters what happens in the years (decades) between them. There may be some value to considering fixed income as a secondary source of return, not just a not-stocks holding.

That's not a recommendation to chase yield, but to examine a broader range of circumstances.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 4:48 am

lack_ey wrote:
I'm not a huge fan of allocating fixed income based on behavior in certain stock market crashes that are pretty rare to begin with. It also matters what happens in the years (decades) between them. There may be some value to considering fixed income as a secondary source of return, not just a not-stocks holding.

That's not a recommendation to chase yield, but to examine a broader range of circumstances.

I can't thank you enough for your reply. It really gave me a lot to think about.

You are right.... my argument that During a crash, I could sell BSV to buy more stock isn't a very solid one.

Specific to my situation, I may rely on selling some of my bonds to get back to my AA in the event of a market crash.

Your post got me thinking in a different direction altogether.
Would three bond funds over complicate things?
BND Total bond market
BSV Short Term bond
VGLT long term government bond.

The portion of BSV would basically be cash in hand. I could sell that first if I needed to.

VGLT would be a long term bond investment. Treasury based. Not corporate.


BND is the blend.

Would a combination of these three funds be a good approach?

Thank you again for your time. I swear I read the forum, but sometimes it's hard to find direct answers to certain questions.
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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 8:33 am

spdoublebass wrote:
VGLT would be a long term bond investment. Treasury based. Not corporate.
Most people in this forum tend to avoid the long term bonds like the plague. But by having an allocation of:
1/3 BND
1/3 BSV
1/3 VGLT

Would this possibly serve me better then only going with BND? This way I could hold the long term bonds and sell the short term if needed.

Again, just curious. Thank you.
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Re: One Last Beginner Question Regarding Bonds

Post by Beensabu » Sun May 21, 2017 1:32 pm

Consider that Merriman recommends Short-Term and Intermediate-Term Treasury funds, but also says a Total Bond fund is just fine. BND holds government and corporate bonds of short, intermediate, and long effective maturities -- that ends up having an average intermediate duration. So you've already got some long-term treasuries in the mix. Something that would tend to go up when stocks crash, but have less interest rate risk than a Long-Term Treasury fund, would be an Intermediate-Term Treasury fund. A separate short-term bond fund appears to be something that folks add when they are closer to needing to make withdrawals. The general consensus seems to be that any quality intermediate duration bond fund is fine for an investment horizon that is at least as long as the average duration of the fund.

I hope someone will correct me if I am off base here, but this is my current understanding.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 1:43 pm

Beensabu wrote:Consider that Merriman recommends Short-Term and Intermediate-Term Treasury funds, but also says a Total Bond fund is just fine. BND holds government and corporate bonds of short, intermediate, and long effective maturities -- that ends up having an average intermediate duration. So you've already got some long-term treasuries in the mix. Something that would tend to go up when stocks crash, but have less interest rate risk than a Long-Term Treasury fund, would be an Intermediate-Term Treasury fund. A separate short-term bond fund appears to be something that folks add when they are closer to needing to make withdrawals. The general consensus seems to be that any quality intermediate duration bond fund is fine for an investment horizon that is at least as long as the average duration of the fund.

I hope someone will correct me if I am off base here, but this is my current understanding.

Thank you very much for your reply.

I have read more today and realized real fast I have no need for a long term bond fund.

I have been comparing what has happened in 2008 in regards to BND and other funds. Just for something to sell if/when the stock market crashes, I am still intrigued by the short term bonds. I may or may not have extra cash on hand and may like this as an option. But again, maybe only a small portion of my bond allotment.
Please feel free to disagree if this is unwise. Again, this is alll very knew to me.
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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 2:24 pm

To be clear....

I'm interested in these three funds:
-BND Total Bind Market
-VGSH Governemnt Short Term (BSV=Short Term bond, is nice as well, but VGSH was more stable in 2008 due to including less corporate bonds)
-BIV Inter-Term Bond. I know this is similar to BND, but I was thinking of a small portion just for balance and the long haul.

I was thinking of a an equal allotment of these three or maybe 50% BND, 25% VGSH, 25% BIV for my bond allotment.


However, maybe this is making it too complicated. Could a counter argument be that if the market crashed 10 years from now, that the amount BND would be up to in ten years would be greater even with a decline then the amount I'd have in a short term fund?

Thanks again for everyone's help.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 3:39 pm

The more I look at 2008, BND Total bond market performed just fine. I think I'll opt to just keep it simple and go with that one fund.
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Re: One Last Beginner Question Regarding Bonds

Post by aristotelian » Sun May 21, 2017 8:30 pm

For 20% of your portfolio, BND is fine and anything you add would probably not make a significant difference. That said, I would recommend reading a good book on different types of bonds. They all have a place depending on your needs. I had good luck with Larry Swedroe's Only Winning Bond Strategy.

Some to consider:

If you are in a high tax bracket and out of space in your retirement accounts, muni bonds are exempt from federal taxes.

If you are seeking stability with less risk of principal loss, you will want a short term bond fund. (BND, which is intermediate term, can have negative total return, particularly when interest rates rise).

If you are seeking inflation protection, TIPS or I-Bonds are good choices because their interest rates change with the inflation rate.

If you are seeking divergence from US Stock Market, you may want to exclude corporate bonds and overweight US Treasury bonds.

If you are seeking higher overall return, you may want to exclude US Treasury bonds and overweight corporate bonds.

Swedroe does not like BND because it includes GNMA bonds, which he considers inherently risky.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Sun May 21, 2017 10:07 pm

aristotelian wrote:For 20% of your portfolio, BND is fine and anything you add would probably not make a significant difference. That said, I would recommend reading a good book on different types of bonds. They all have a place depending on your needs. I had good luck with Larry Swedroe's Only Winning Bond Strategy.

Some to consider:

If you are in a high tax bracket and out of space in your retirement accounts, muni bonds are exempt from federal taxes.

If you are seeking stability with less risk of principal loss, you will want a short term bond fund. (BND, which is intermediate term, can have negative total return, particularly when interest rates rise).

If you are seeking inflation protection, TIPS or I-Bonds are good choices because their interest rates change with the inflation rate.

If you are seeking divergence from US Stock Market, you may want to exclude corporate bonds and overweight US Treasury bonds.

If you are seeking higher overall return, you may want to exclude US Treasury bonds and overweight corporate bonds.

Swedroe does not like BND because it includes GNMA bonds, which he considers inherently risky.

I have read up on Swedroe's position and I agree with it. However, that is not saying much based on my overall lack of knowledge.

My main reason for going in a different direction than BND is to be able to sell them in a crashing market to buy stocks and rebalance. I'm wondering if I should have a portion of short term for that purpose. Then, that got me considering a two fund approach. Maybe VGSH or BSV and then BIV.

I know it's not much difference, but I was just wondering what people do. Even 60/40 BIV and BSV.

Thanks for all the information you provided. Very helpful.

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Re: One Last Beginner Question Regarding Bonds

Post by aristotelian » Sun May 21, 2017 10:28 pm

spdoublebass wrote:

I have read up on Swedroe's position and I agree with it. However, that is not saying much based on my overall lack of knowledge.

My main reason for going in a different direction than BND is to be able to sell them in a crashing market to buy stocks and rebalance. I'm wondering if I should have a portion of short term for that purpose. Then, that got me considering a two fund approach. Maybe VGSH or BSV and then BIV.

I know it's not much difference, but I was just wondering what people do. Even 60/40 BIV and BSV.

Thanks for all the information you provided. Very helpful.
You might take a look at Intermediate Treasury (VFIUX) or Intermediate Government (VSIGX) for that purpose. Intermediate Treasury returned 13% in '08. Of course, no guarantee it will do that in the next bear market.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Mon May 29, 2017 5:55 pm

aristotelian wrote:
You might take a look at Intermediate Treasury (VFIUX) or Intermediate Government (VSIGX) for that purpose. Intermediate Treasury returned 13% in '08. Of course, no guarantee it will do that in the next bear market.

I'm not trying to beat a dead horse with this issue.

-I understand BND Total Bond Market is generally fine overall.
- I'd like to add treasury bonds for the sole purpose of selling them if Stocks go down to buy stocks.
- I don't want to over complicate things.

If my allotment for bonds is 20%.
Would a breakdown of this be ok?:
10% BND
10% VGLT long term government (treasury)

The only reason I'm asking is because I've read you should have some short term bonds to balance your long term bond.
So would this be better?:
10% BND
5% VGlT
5% BSV short term bond
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Re: One Last Beginner Question Regarding Bonds

Post by GLState » Mon May 29, 2017 6:22 pm

I would suggest sticking with what you have. You don't know why the alternatives may be good choices. None of us know what the next crash will be like. Your portfolio is good enough. You seem to be planning for a crash and yet you have an 80/20 stock bond portfolio with a size & value tilt. Perhaps, this is too risky for you in spite of what the Merriman portfolio holds.

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Re: One Last Beginner Question Regarding Bonds

Post by aristotelian » Mon May 29, 2017 6:24 pm

spdoublebass wrote:
aristotelian wrote:
You might take a look at Intermediate Treasury (VFIUX) or Intermediate Government (VSIGX) for that purpose. Intermediate Treasury returned 13% in '08. Of course, no guarantee it will do that in the next bear market.

I'm not trying to beat a dead horse with this issue.

-I understand BND Total Bond Market is generally fine overall.
- I'd like to add treasury bonds for the sole purpose of selling them if Stocks go down to buy stocks.
- I don't want to over complicate things.

If my allotment for bonds is 20%.
Would a breakdown of this be ok?:
10% BND
10% VGLT long term government (treasury)

The only reason I'm asking is because I've read you should have some short term bonds to balance your long term bond.
So would this be better?:
10% BND
5% VGlT
5% BSV short term bond
I do not like VGLT. Non-correllative to stocks is good but almost as risky. That is not what I want from a bond fund.

I like the second one better but honestly you would be fine with 20% BND or 20% VGIT.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Mon May 29, 2017 6:35 pm

aristotelian wrote:
I do not like VGLT. Non-correllative to stocks is good but almost as risky. That is not what I want from a bond fund.

I like the second one better but honestly you would be fine with 20% BND or 20% VGIT.

Thanks. I'm realizing that's probably the best option. The only reason I gave it any thought is because if we do have a crash, I'd like to have some bonds to rebalance with.

When I put bond funds up against VTI (total stock market) VGlT and BSV do pretty well. So does BND.

But I know VGLT is not good for a long term investment. I guess I am chasing yield, but not long term, only trying to get an extra few points doing a crash.

Thanks again for your reply.
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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Mon May 29, 2017 6:48 pm

GLState wrote:I would suggest sticking with what you have. You don't know why the alternatives may be good choices. None of us know what the next crash will be like. Your portfolio is good enough. You seem to be planning for a crash and yet you have an 80/20 stock bond portfolio with a size & value tilt. Perhaps, this is too risky for you in spite of what the Merriman portfolio holds.
There's a difference between preparing for a crash and fearing a crash. I just want to be in a position to buy and rebalance.

I know what you mean though. At this stage, bonds to me are things to sell to by stock in a crash. I'm not worried or concerned with the interest of them.
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Re: One Last Beginner Question Regarding Bonds

Post by NiceUnparticularMan » Mon May 29, 2017 6:53 pm

My two cents:

I'd consider owning a LESS diverse set of U.S. bonds than BND. This is based on the theory bonds are risk-management tools and you only want to buy the tools that help you accomplish your goals.

But I wouldn't consider adding other U.S. bond funds to BND. That to me is going in the wrong direction in terms of focus. Note BND already has about 45% in bonds that are in the 0-5 years range in effective majority. It already has about 43% in Treasury/Agency. It is all in there, because that is the nature of BND.

So I would recommend you stick with BND unless and until you decide you want to use a more focused bond strategy, in which case you will be exchanging BND for something else.

The only exception to all this is if you decide to add international bonds. That's something BND doesn't hold.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Mon May 29, 2017 7:06 pm

NiceUnparticularMan wrote:My two cents:

I'd consider owning a LESS diverse set of U.S. bonds than BND. This is based on the theory bonds are risk-management tools and you only want to buy the tools that help you accomplish your goals.

But I wouldn't consider adding other U.S. bond funds to BND. That to me is going in the wrong direction in terms of focus. Note BND already has about 45% in bonds that are in the 0-5 years range in effective majority. It already has about 43% in Treasury/Agency. It is all in there, because that is the nature of BND.

So I would recommend you stick with BND unless and until you decide you want to use a more focused bond strategy, in which case you will be exchanging BND for something else.

The only exception to all this is if you decide to add international bonds. That's something BND doesn't hold.
I think this is what I am interested in. Any recommendations as to where to find reading/information on this? The only thing I have found so far is from the wiki and forum. Watered down, it seems to suggest that treasury bonds are what to get. I could be WAY off on this.

I am not attached to BND in any way. I wouldn't mind going in another direction, but I have not read enough on the subject as of yet. All I have done to this point is compare different Bond funds against the Total Stock Market. BSV, VGLT were the two I liked besides BND. What do people do instead of BND?

As for International bonds.......I have only read negative things about them. Yes, I know Vanguard is putting them in the target funds. My limited knowledge and research has me wondering though if I should get some small amount. They seem to have negative correlation to total international stock, even if we have limited data so far.
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Re: One Last Beginner Question Regarding Bonds

Post by Beensabu » Mon May 29, 2017 8:07 pm

These are a couple books I have seen repeatedly recommended here that you may find helpful:

The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today

~ Larry Swedroe and Joseph Hempen

The Bond Book

~ Annette Thau

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Mon May 29, 2017 8:15 pm

Beensabu wrote:These are a couple books I have seen repeatedly recommended here that you may find helpful:

The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today

~ Larry Swedroe and Joseph Hempen

The Bond Book

~ Annette Thau

Thanks!!!!!!!
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Re: One Last Beginner Question Regarding Bonds

Post by NiceUnparticularMan » Mon May 29, 2017 8:48 pm

spdoublebass wrote:
NiceUnparticularMan wrote:My two cents:

I'd consider owning a LESS diverse set of U.S. bonds than BND. This is based on the theory bonds are risk-management tools and you only want to buy the tools that help you accomplish your goals.

But I wouldn't consider adding other U.S. bond funds to BND. That to me is going in the wrong direction in terms of focus. Note BND already has about 45% in bonds that are in the 0-5 years range in effective majority. It already has about 43% in Treasury/Agency. It is all in there, because that is the nature of BND.

So I would recommend you stick with BND unless and until you decide you want to use a more focused bond strategy, in which case you will be exchanging BND for something else.

The only exception to all this is if you decide to add international bonds. That's something BND doesn't hold.
I think this is what I am interested in. Any recommendations as to where to find reading/information on this? The only thing I have found so far is from the wiki and forum. Watered down, it seems to suggest that treasury bonds are what to get. I could be WAY off on this.

I am not attached to BND in any way. I wouldn't mind going in another direction, but I have not read enough on the subject as of yet. All I have done to this point is compare different Bond funds against the Total Stock Market. BSV, VGLT were the two I liked besides BND. What do people do instead of BND?

As for International bonds.......I have only read negative things about them. Yes, I know Vanguard is putting them in the target funds. My limited knowledge and research has me wondering though if I should get some small amount. They seem to have negative correlation to total international stock, even if we have limited data so far.
I'd second the recommendation for Swedroe's book.

Personally, almost all my fixed income is in non-bonds (a cash-balance pension and a stable value fund, and down the road I am planning to use a lot of the TSP's G Fund). I have a small allocation to TIPs, but no nominal bonds. However, if I wasn't doing all that, I would likely be using shorter-term Treasuries. That is in fact because I believe in going with fewer, but safer fixed-income/bonds as opposed to more, but riskier fixed-income/bonds, and taking my risks in diversified equities.

That's a reasonably common perspective, but again going with BND until you are sure what you want to do is very reasonable.

On international bonds, as I understand it, Vanguard's research doesn't really suggest much need for them until you are around 50% fixed-income. I'm short of that, so I am not bothering currently, and instead I just have a healthy (40%) allocation to international equities (which in turn are further tilted away from U.S. exposure--but that is a whole other story). I don't see any harm in it either, and wouldn't hesitate to recommend their balanced funds with international bonds, but again I wouldn't worry about it yet unless you are planning to be really high in bonds in general.

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Re: One Last Beginner Question Regarding Bonds

Post by spdoublebass » Mon May 29, 2017 9:07 pm

NiceUnparticularMan wrote:


I'd second the recommendation for Swedroe's book.

Personally, almost all my fixed income is in non-bonds (a cash-balance pension and a stable value fund, and down the road I am planning to use a lot of the TSP's G Fund). I have a small allocation to TIPs, but no nominal bonds. However, if I wasn't doing all that, I would likely be using shorter-term Treasuries. That is in fact because I believe in going with fewer, but safer fixed-income/bonds as opposed to more, but riskier fixed-income/bonds, and taking my risks in diversified equities.

That's a reasonably common perspective, but again going with BND until you are sure what you want to do is very reasonable.

On international bonds, as I understand it, Vanguard's research doesn't really suggest much need for them until you are around 50% fixed-income. I'm short of that, so I am not bothering currently, and instead I just have a healthy (40%) allocation to international equities (which in turn are further tilted away from U.S. exposure--but that is a whole other story). I don't see any harm in it either, and wouldn't hesitate to recommend their balanced funds with international bonds, but again I wouldn't worry about it yet unless you are planning to be really high in bonds in general.


Thanks very much for this info. I'm getting that book.
Also the info and explanations you gave were very helpful.
Resist much, obey little.

NibbanaBanana
Posts: 222
Joined: Sun Jan 22, 2017 10:34 pm

Re: One Last Beginner Question Regarding Bonds

Post by NibbanaBanana » Mon May 29, 2017 9:31 pm

I know nothing about bonds either but bought my first bond fund to hold about three years living expenses in case of a big market drop. Tried to get as good a yield as possible while choosing almost completely on how well the fund behaved over the last ten years. ie didn't drop in 2008. Just looked at the chart on vanguard.com and compared funds. That's how sophisticated a bond investor I am. I bought the Vanguard GNMA fund.

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