Rebalancing: Bond Alternatives

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Rebalancing: Bond Alternatives

Post by markesquire » Mon Jan 22, 2018 1:55 pm

With recent growth, my stocks (VTSAX, VTIAX) have outpaced my bonds (VTBLX), and I need to rebalance.

Typically, I would just sell excess stocks and buy more of the bonds. But my bonds have done poorly, and most folks expect interest rate increases over the next year.

What bond alternatives exist that (1) would serve the portfolio function of bonds by offsetting volatility in equities, but that (2) don't have the very likely downside that bonds appear to have? Maybe I'm not understanding the bond market, and now is a great time to buy, in which case I would be happy to hear other perspectives.

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Re: Rebalancing: Bond Alternatives

Post by whodidntante » Mon Jan 22, 2018 1:59 pm

Brokered CDs or treasury bonds held to maturity
I bonds.
Stable value funds.
Last edited by whodidntante on Mon Jan 22, 2018 2:02 pm, edited 1 time in total.

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Re: Rebalancing: Bond Alternatives

Post by bogglehead125 » Mon Jan 22, 2018 2:02 pm

Short-term treasuries have lower interest rate sensitivity.

Somewhat unrelated: what information do you think you have about bonds that the rest of us don't know about?

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