Move from MM to Total Bond and from S-T to Total bond

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
mymoneyresearch
Posts: 42
Joined: Fri Feb 10, 2012 2:20 pm

Move from MM to Total Bond and from S-T to Total bond

Post by mymoneyresearch »

I am considering moving several thousand from MM and short term bond fund to VG total bond market. In general, is this a good time, bad time, or average time? I am not exactly trying to time the market, rather just advoiding a dumb move if sitting tight at this point would seem best.
retired@50
Posts: 3463
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Move from MM to Total Bond and from S-T to Total bond

Post by retired@50 »

mymoneyresearch wrote: Mon Jul 27, 2020 8:40 am I am considering moving several thousand from MM and short term bond fund to VG total bond market. In general, is this a good time, bad time, or average time? I am not exactly trying to time the market, rather just advoiding a dumb move if sitting tight at this point would seem best.
What is your time horizon?

Do you have an emergency fund?

Over very long periods (over 10 years or more) a total bond fund will probably outperform a money market fund.

Regards,
This is one person's opinion. Nothing more.
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: Move from MM to Total Bond and from S-T to Total bond

Post by dbr »

1. You are trying to time the market.

2. What fraction of your portfolio is "several thousand" and why is this money thought of as different from all the rest of your money? Where are all the rest of your savings?

3. Generally a long term portfolio of stocks and bonds will do very well in low cost, diversified, intermediate term bond funds of any choice.

4. Money that you know will be needed in a known amount on a known given date in the short term should be in money markets, savings, or CDs.
sycamore
Posts: 1215
Joined: Tue May 08, 2018 12:06 pm

Re: Move from MM to Total Bond and from S-T to Total bond

Post by sycamore »

The answer is unknowable because we don't know what's going to happen to rates in the short or intermediate or long term. Lots of people say "oh the Fed will do this or do that" but it's not like there's some law of nature that guarantees/requires rates to move in a certain direction from here. Are some moves more likely than others? Perhaps, but no guarantees in any case.

As a practical matter, I wonder how you'll use the answer to your question. Say now is a bad time to switch from short term to Total Bond, how will you know when it's a good time? I guess you'd have to keep asking every week or month?
User avatar
mickeyd
Posts: 4825
Joined: Fri Feb 23, 2007 3:19 pm
Location: Deep in the Heart of South Texas

Re: Move from MM to Total Bond and from S-T to Total bond

Post by mickeyd »

Market timing is seldom a winning strategy.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
Van
Posts: 759
Joined: Wed Oct 27, 2010 9:24 am

Re: Move from MM to Total Bond and from S-T to Total bond

Post by Van »

mickeyd wrote: Mon Jul 27, 2020 11:31 am Market timing is seldom a winning strategy.
How do you know that?
Topic Author
mymoneyresearch
Posts: 42
Joined: Fri Feb 10, 2012 2:20 pm

Re: Move from MM to Total Bond and from S-T to Total bond

Post by mymoneyresearch »

retired@50 wrote: Mon Jul 27, 2020 8:46 am
mymoneyresearch wrote: Mon Jul 27, 2020 8:40 am I am considering moving several thousand from MM and short term bond fund to VG total bond market. In general, is this a good time, bad time, or average time? I am not exactly trying to time the market, rather just advoiding a dumb move if sitting tight at this point would seem best.
What is your time horizon?

Do you have an emergency fund? Yes

Over very long periods (over 10 years or more) a total bond fund will probably outperform a money market fund.

Regards,
Time horizon: None.
Emerg. Fund: Yes.
Topic Author
mymoneyresearch
Posts: 42
Joined: Fri Feb 10, 2012 2:20 pm

Re: Move from MM to Total Bond and from S-T to Total bond

Post by mymoneyresearch »

dbr wrote: Mon Jul 27, 2020 9:58 am 1. You are trying to time the market.

2. What fraction of your portfolio is "several thousand" and why is this money thought of as different from all the rest of your money? Where are all the rest of your savings?

3. Generally a long term portfolio of stocks and bonds will do very well in low cost, diversified, intermediate term bond funds of any choice.

4. Money that you know will be needed in a known amount on a known given date in the short term should be in money markets, savings, or CDs.
Thanks for your input. Technically, I am trying to time the market, in the same way that I tend to glance both ways before crossing the street. This money is same as rest of VG investments, except it is in lower a yielding fund except for MM.
Topic Author
mymoneyresearch
Posts: 42
Joined: Fri Feb 10, 2012 2:20 pm

Re: Move from MM to Total Bond and from S-T to Total bond

Post by mymoneyresearch »

sycamore wrote: Mon Jul 27, 2020 11:18 am The answer is unknowable because we don't know what's going to happen to rates in the short or intermediate or long term. Lots of people say "oh the Fed will do this or do that" but it's not like there's some law of nature that guarantees/requires rates to move in a certain direction from here. Are some moves more likely than others? Perhaps, but no guarantees in any case.

As a practical matter, I wonder how you'll use the answer to your question. Say now is a bad time to switch from short term to Total Bond, how will you know when it's a good time? I guess you'd have to keep asking every week or month?
Granted, no guarantees. Its just that in spite of the Co-vid 19 ups and downs, both stocks and bonds seem pricy to me, and I just wondered if there is some sort of consensus on that. There are pro and cons for and against moving funds. Its not urgent.
User avatar
mickeyd
Posts: 4825
Joined: Fri Feb 23, 2007 3:19 pm
Location: Deep in the Heart of South Texas

Re: Move from MM to Total Bond and from S-T to Total bond

Post by mickeyd »

Van wrote: Mon Jul 27, 2020 11:44 am
mickeyd wrote: Mon Jul 27, 2020 11:31 am Market timing is seldom a winning strategy.
How do you know that?
An old guy I once knew of named Bogle mentioned it once or twice I believe.
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
Post Reply