Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
billo43
Posts: 12
Joined: Fri Sep 22, 2017 11:37 am

Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by billo43 » Tue Apr 10, 2018 7:45 pm

I read somewhere Jack Bogle invests in Vanguard Intermediate-Term Bond Index fund. Is it a good time to do this? :confused

PFInterest
Posts: 2252
Joined: Sun Jan 08, 2017 12:25 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by PFInterest » Tue Apr 10, 2018 7:47 pm

yes. also no. also maybe.

hudson
Posts: 1486
Joined: Fri Apr 06, 2007 9:15 am

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by hudson » Tue Apr 10, 2018 8:29 pm

I personally would disregard the time and just buy and hold it.
It's rated as a 2 in Vanguard's Risk Potential. It does hold 25% Baa rated bonds. The SEC yield is over 3%; it distributes almost 3% monthly.
It's an OK taxable bond fund.

Larry Swedroe would not recommend that you buy this fund....nothing to do with the timing.
Consider reading his bond book...at least read the reviews... https://www.amazon.com/Only-Guide-Winni ... g=UTF8&me=

Bud
Posts: 139
Joined: Sun Jul 22, 2007 6:59 am

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by Bud » Tue Apr 10, 2018 8:33 pm

There is no bad time to invest in this fund - And I think you mean the Intermediate Term Bond Index.

livesoft
Posts: 62703
Joined: Thu Mar 01, 2007 8:00 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by livesoft » Tue Apr 10, 2018 8:33 pm

Similar thread from late March:
Time to sell intermediate bonds?
Wiki This signature message sponsored by sscritic: Learn to fish.

ThriftyPhD
Posts: 702
Joined: Mon Jul 31, 2017 10:43 am

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by ThriftyPhD » Tue Apr 10, 2018 8:35 pm

Last Thursday was good, but today is terrible. May 8th will be the next good day, you should invest then.

*ahem*

That is to say, nobody knows nothin. If the bond fund is what you want to invest in and fits your desired asset allocation and you have money to invest, then invest today.

rotorhead
Posts: 422
Joined: Wed Mar 17, 2010 3:59 pm
Location: Florida

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by rotorhead » Tue Apr 10, 2018 8:42 pm

OP, we have been holding VBILX in my wife's Vanguard IRA account for more than 5 years now; and it's doing just fine. Anytime is a good time.

bltn
Posts: 184
Joined: Mon Feb 20, 2017 9:32 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by bltn » Tue Apr 10, 2018 9:41 pm

I agree that predicting interest rate changes can be nearly impossible. And the rates have been at historic lows for years. .....But , the rates seem to be rising at least some over the next year or so. I think interest rate risk is unusually high currently.
I presently am keeping my fixed income investment in short and ultra short tem bond funds. One exception might be cd s with low early withdrawal penalties.

User avatar
JoMoney
Posts: 5842
Joined: Tue Jul 23, 2013 5:31 am

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by JoMoney » Wed Apr 11, 2018 12:04 am

If you're looking to invest in a portfolio of bonds that has a average duration of 6.4 years
then, ... sure.
This would be like buying a ladder of bonds going out 10 years.
For me personally, that's too far out for the money I'm keeping 'safe'/'emergency'/'contingency fund', but I have a very small allocation to fixed income.

If I had, say, a 60/40 portfolio... and I was withdrawing 4% a year off of it... then I could probably justify to myself having 4% x 10 years in something like that fund.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

User avatar
randomizer
Posts: 1508
Joined: Sun Jul 06, 2014 3:46 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by randomizer » Wed Apr 11, 2018 12:12 am

Yes.

Same answer applies to every question with “time” or “timing” or “now”.
87.5:12.5, EM tilt — HODL the course!

User avatar
peterinjapan
Posts: 454
Joined: Fri May 15, 2015 8:41 am
Location: Japan!

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by peterinjapan » Wed Apr 11, 2018 4:47 am

Great post. I am currently trying to figure out what 'balancing' strategy I should be pursuing. I have held $40,000 in BND which somehow managed to net me a profit of $200 over 3-4 years, according to Fidelity (the price declined as the money came in), which frustrated me. I'm considering a CD ladder from Fidelity since the 2 year CDs are up to 2.6%, and the overall 2 year ladder would bring in 2.3% or something. It seems worth it to lock in a decent rate and protect against the falling prices of bonds in ETFs. Am I wrong in assuming this?

Also, what is the best ETF version of VBILX? I compared it to LQD but LQD is only down 0.71 over the past year, compared to 2.56 for VBILX. I thought the two were similar?

lahob
Posts: 24
Joined: Mon Feb 26, 2018 10:17 am
Location: USA

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by lahob » Wed Apr 11, 2018 9:44 am

peterinjapan wrote:
Wed Apr 11, 2018 4:47 am
Also, what is the best ETF version of VBILX? I compared it to LQD but LQD is only down 0.71 over the past year, compared to 2.56 for VBILX. I thought the two were similar?
BIV is the ETF version of VBILX.

You are looking at price and not total return. Both are up over the past 12 months, though LQD is up more. YTD is another story: LQD is down more.

VBILX and LQD look pretty different to me: LQD has longer duration and lower credit quality. Apparently those difference were rewarded over the past year.

User avatar
ruralavalon
Posts: 13938
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by ruralavalon » Wed Apr 11, 2018 10:18 am

In my opinion most investing questions using the word "time" are the wrong question. Don't try to time the bond market.

Our only bond fund is Vanguard Intermediate-term Bond Index Fund Admiral Shares (VBILX). It is 50% of pur portfolio.

The current SEC Yield is 3.20%. In evaluating a fund look at the total return, not just the share price.

Over the long haul higher interest rates are a positive for a bond investment. Invest for the long-term.

The ETF version is Vanguard Intermediate-term Bond ETF (BIV).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

invstar
Posts: 95
Joined: Tue Apr 25, 2017 1:20 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by invstar » Wed Apr 11, 2018 11:00 am

Why do people care about price and not total returns for bonds? I mean, if I open a 5 year 2.6% CD with 50k - my annual return would be $1300. Let's say an intermediate bond fund returns around 3% ($1500), doesn't it mean that the bond fund is better than the CD?

billo43
Posts: 12
Joined: Fri Sep 22, 2017 11:37 am

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by billo43 » Wed Apr 11, 2018 9:36 pm

Thanks ....The reason I was asking is Mr. Bogle does an "asset allocation known as the 60-40 rule — 60 percent in a U.S. stock index fund and 40 percent in a U.S. bond index fund. He maintained that allocation for himself for years." One bond fund is Inter. Term index fund. The allocation is different according to age groups. I'm in my 60s. :sharebeer

fredjohnson
Posts: 89
Joined: Fri Nov 15, 2013 7:28 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by fredjohnson » Thu Apr 12, 2018 8:40 pm

Any time is a good time. Trying to time the market never works.

billo43
Posts: 12
Joined: Fri Sep 22, 2017 11:37 am

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by billo43 » Thu Apr 12, 2018 8:56 pm

Thanks. I just saw a recent clip on YouTube with Mr. Bogle. He was saying to invest in bond funds to be safe when you get older.

ksualum
Posts: 79
Joined: Mon Jan 15, 2018 3:01 pm

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by ksualum » Fri Apr 13, 2018 9:52 am

Billo,
Also depends which accounts you are talking about (taxable vs tax deferred). You might consider municipal bonds in a taxable account for instance. If you are brave enough to share with us more details of you accounts, your amounts (actually don't really need amounts, but we need percentages of your overall portfolio that you will be holding this bond fund at and the % of your overall investments that you have other stocks in), we may be able to give you more detailed advice . . .

There is a sticky at the top of this page (2nd post from the top) on how to ask portfolio questions.

User avatar
abuss368
Posts: 12835
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Is it a good time to invest in Vanguard Intermediate-Term Bond fund?

Post by abuss368 » Sat Aug 18, 2018 8:24 pm

billo43 wrote:
Tue Apr 10, 2018 7:45 pm
I read somewhere Jack Bogle invests in Vanguard Intermediate-Term Bond Index fund. Is it a good time to do this? :confused
Hi billo43 -

Welcome to the Bogleheads! The Vanguard Intermediate Term Bond Index Fund is an excellent fund. In my opinion any short or intermediate term bond fund that is low cost, diversified, and of high quality will provide safety and income to an investment portfolio.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

Post Reply