Bonds - Throw it all on the table!!!

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
gkaplan
Posts: 7034
Joined: Sat Mar 03, 2007 8:34 pm
Location: Portland, Oregon

Re: Bonds - Throw it all on the table!!!

Post by gkaplan »

abuss368 wrote:
gkaplan wrote:
abuss368 wrote:Bogleheads there have been many excellent threads over the last couple of weeks related to bonds. I started a couple with polls and the results were excellent. Often a poll is limited, needs more options, etc.

I would like to try an open ended thread on your personal bond strategy.

Please simply note:

1) List the bond funds, individual bonds, CD's, etc. that you invest in
2) In which account what fixed income securities are held
3) Allocation as a percentage of Fixed Income
4) Allocation to bonds overall (i.e. age in bonds, etc.)
5) Any other plans such as adding more bonds funds, consolidating and merging, etc.

Hopefully this thread provides an inside peak into how Bogleheads manage their fixed income allocation and will help other investors.

Best.

4) How does this differ from 3, above.
Simple - are you "age in bonds" or "age something or another" or "lost in space"?
Thank you for taking my words out of context.
Gordon
User avatar
ogd
Posts: 4876
Joined: Thu Jun 14, 2012 11:43 pm

Re: Bonds - Throw it all on the table!!!

Post by ogd »

Mid thirties, stock bond 60/40 (55/45 before tax adjustment). Within fixed income:

21% TBM
20% cheap TBM-like active bond fund in 401k

In taxable:
26% VCADX + VCLAX (about half and half, a result of tax loss harvesting)
10% VFIUX (IT Treasuries)
10% TFI (national munis)
3% I-bonds
~10% cash (savings accounts, checking account, one old CD). I include my emergency fund here, the rule is that cash can't drop below a certain amount.

The percentages are somewhat accidental because of account sizes. I'd have a lot more TBM, for example, if that account was larger.
User avatar
tdirgins
Posts: 59
Joined: Wed Sep 12, 2007 3:33 pm

Re: Bonds - Throw it all on the table!!!

Post by tdirgins »

1) List the bond funds, individual bonds, CD's, etc. that you invest in
Total Bond and Total Intl Bond via VTTVX 2025 fund, VAIPX TIPS, NY LT Tax Exempt VNYUX, Limited Term Tax Exempt VMLUX

2) In which account what fixed income securities are held
401k, Rollover IRA, Taxable, Taxable

3) Allocation as a percentage of Fixed Income
29%,15%,10%,10% -- rest of fixed is in employer cash balance account

4) Allocation to bonds overall (i.e. age in bonds, etc.)
22% (rest in cash balance, total fixed is 36%)

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
Not planning to add any bonds. I was advised to dump VAIPX TIPS during my Vanguard portfolio review at the beginning of last year. I didn't. In hindsight, it turned out to be good advice, but I stuck to my original plan. (which was vetted on this very forum) :wink:
linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: Bonds - Throw it all on the table!!!

Post by linenfort »

@ gkaplan

3) is within bonds, i.e. what percentage of your bonds does FIBIX constitute?
4) is all bonds divided by (bonds+stocks+other)
gkaplan
Posts: 7034
Joined: Sat Mar 03, 2007 8:34 pm
Location: Portland, Oregon

Re: Bonds - Throw it all on the table!!!

Post by gkaplan »

linenfort wrote:@ gkaplan

3) is within bonds, i.e. what percentage of your bonds does FIBIX constitute?
4) is all bonds divided by (bonds+stocks+other)

Thank you for the explanation. I edited my initial post.
Gordon
Gauntlet
Posts: 188
Joined: Wed Nov 30, 2011 10:06 am

Re: Bonds - Throw it all on the table!!!

Post by Gauntlet »

1) List the bond funds, individual bonds, CD's, etc. that you invest in
Total Bond and G Fund

2) In which account
TSP, 401k, IRA, 529

3) Allocation as a percentage of Fixed Income
about 50/50

4) Allocation to bonds overall (i.e. age in bonds, etc.)
about 30%

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
Recently, I sold all of my I Bonds to further simplify my portfolio and get rid of an account. I Bonds were only 2% of my total portfolio and shrinking each year. I"m thinking about adding some international bonds.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

tdirgins wrote: I was advised to dump VAIPX TIPS during my Vanguard portfolio review at the beginning of last year. I didn't. In hindsight, it turned out to be good advice, but I stuck to my original plan. (which was vetted on this very forum) :wink:
That is interesting. I have read a few threads lately where Bogleheads are noting Vanguard has recommended this.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
Peter Foley
Posts: 5153
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

Re: Bonds - Throw it all on the table!!!

Post by Peter Foley »

abuss368 wrote:
I was corresponding with livesoft a few days ago and I agree that one thing is probably clear with bonds: An investor can probably own many, a couple, or one single bond fund, and will probably end up in the same place with very close results.

The simplicity of bond investing. It appears many bond funds are not needed.
I disagree with both the statements above.

There is not a lot of correlation among the following: total bond market, stable value funds, regular tips, short term tips, older I-bond and ee-bonds. I own them all - in part because of what is available to me in 403b and 457 accounts. I bonds, ee-bonds, and stable value have little or no risk. Regular tips were much more volatile than total bond market or short term tips. The mix of savings in taxable and tax deferred and the ability to save in tax deferred (limits were raised about a dozen years ago) also required some branching out for reasons of tax efficiency. All 3 bond funds and stable value are in tax deferred. Other than older I bonds and EE bonds I own only equities in taxable and Roth.

My fixed holdings are about 52% of my total portfolio - I would like them to be simpler but I am not going to give up good fixed interest rates or inflation protection to do so.
lazyday
Posts: 3797
Joined: Wed Mar 14, 2007 10:27 pm

Re: Bonds - Throw it all on the table!!!

Post by lazyday »

Peter Foley wrote:, stable value funds, regular tips, short term tips,
Do short term tips add much, in this trio?
livesoft
Posts: 73518
Joined: Thu Mar 01, 2007 8:00 pm

Re: Bonds - Throw it all on the table!!!

Post by livesoft »

Peter Foley wrote:I disagree with both the statements above.
I would be curious if you have calculated the performance of your fixed income assets as in average annual return for the last 1, 3, 5, 10 years.
Wiki This signature message sponsored by sscritic: Learn to fish.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

lazyday wrote:
Peter Foley wrote:, stable value funds, regular tips, short term tips,
Do short term tips add much, in this trio?
Thank you!
John C. Bogle: “Simplicity is the master key to financial success."
Bracket
Posts: 417
Joined: Sun Mar 10, 2013 7:50 pm

Re: Bonds - Throw it all on the table!!!

Post by Bracket »

abuss368 wrote:
tdirgins wrote: I was advised to dump VAIPX TIPS during my Vanguard portfolio review at the beginning of last year. I didn't. In hindsight, it turned out to be good advice, but I stuck to my original plan. (which was vetted on this very forum) :wink:
That is interesting. I have read a few threads lately where Bogleheads are noting Vanguard has recommended this.
Can anyone tell me why vanguard is advising people to dump this fund? I'd guess they are saying switch to the short term TIPS fund, or are they saying dump TIPS entirely? So far I have stuck with my intermediate term TIPS fund, despite it's less than stellar performance, but I'd be interested in hearing Vanguard's advice.
BillyG
Posts: 421
Joined: Sat Nov 17, 2012 9:02 pm
Location: Maryland, USA

Re: Bonds - Throw it all on the table!!!

Post by BillyG »

1) List the bond funds, individual bonds, CD's, etc. that you invest in
VG Total Bond Admiral (or Spartan in a Fidelity Account), VG TIPS Admiral, split roughly 50/50 between Intermediate and Short Term TIPS

2) In which account what fixed income securities are held
100% in Tax-deferred

3) Allocation as a percentage of Fixed Income
All of fixed income is in bond index funds

4) Allocation to bonds overall (i.e. age in bonds, etc.)
Age 57; 60% stocks (40% US, 20% International), 40% bonds split at 30% total bond index and 10% TIPS

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
Today I rebalanced with bonus money and my entire 2014 401(K) contributions and matching; the new investments were roughly 85% bonds and TIPS, 15% international stocks. No new US stock purchases. Back door Roth was funded a couple of weeks ago with 100% VG US stock index fund.

New money invested during the year will be allocated according to rebalancing needs.

I need to look at whether it makes sense to trade the short term TIPS to intermediate TIPS.

I also need to consider putting my emergency fund currently in VG Prime MMF into a short or intermediate term non-taxable or other bond fund.

Billy
User avatar
czeckers
Posts: 1048
Joined: Thu May 17, 2007 3:49 pm
Location: USA

Re: Bonds - Throw it all on the table!!!

Post by czeckers »

1) VG inter-term treasury bond fund -- I have an agressive slince-n-dice portfolio on the stock side so am going for maximum safety on the bond side.

2) All investments are in tax-deferred retirement accounts

3) Fixed income = 20%

4) Age-15 in bonds, adjusted every 10 years on 35th, 45th, 55th birthday, etc.

5) My plan is to increase the bond percentage by 10% every 10 years until I hit 50% at age 65 and leave it there.
Given the long horizon right now, I do not hold any TIPS as I expect the stock side to be able to keep up with inflation over the long run, but plan to convert half of the bond portfolio to the VG TIPS fund once I'm 10 years out from retirement.

-K
Last edited by czeckers on Thu Jan 30, 2014 6:15 pm, edited 1 time in total.
The Espresso portfolio: | | 20% US TSM, 20% Small Value, 10% US REIT, 10% Dev Int'l, 10% EM, 10% Commodities, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."
User avatar
siamond
Posts: 5637
Joined: Mon May 28, 2012 5:50 am

Re: Bonds - Throw it all on the table!!!

Post by siamond »

Didn't we have a very similar thread a few days ago? Sounds to me that the OP is checking if we provide consistent answers, thread after thread... :wink:

1) List the bond funds, individual bonds, CD's, etc. that you invest in
=> FXSTX, PTRAX, VMATX, VWEHX, plus another HY fund in a Vanguard annuity
=> no individual bonds, no CD, no TIPS, nothing else

2) In which account what fixed income securities are held
=> VMATX in taxable securities, the rest in various tax-deferred vehicles

3) Allocation as a percentage of Fixed Income
=> I aim at 100%. Ok, there is always a tiny bit of cash lingering here and there. No emergency account (can't see the point).

4) Allocation to bonds overall (i.e. age in bonds, etc.)
=> AA is 75/25 (equities/bonds). Then bonds are roughly 55% total-bonds, 20% high-yield, 25% Munis, although I don't fret if such split varies a tad.
=> no age-in-bonds or equivalent progressive strategy. I'm just waiting for big milestones to reassess (e.g. large 'magic' number reached; I turn 65). Does this mean 'lost in space'? :happy

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
=> Will simplify a bit once my Deferred Comp Plan is over (exit PTRAX). Will probably reduce HY to 10% if & when regular bonds come back to better yields.
=> I might reassess the use of munis once I am fully retired (with a much lower tax rate) and regular bonds come back to better yields.
=> I decided against TIPS and Int'l Bonds. I never tried to use CDs or Individual Bonds though, maybe one day, I'll play around and see what goes. I have little urge to do so though.
Code Commit
Posts: 138
Joined: Mon Mar 04, 2013 11:42 am

Re: Bonds - Throw it all on the table!!!

Post by Code Commit »

I don't know if the OP is testing us for consistent answers or simply looking for confirmation bias ;) After everyone posted various fixed income allocations (including TBM, short-term bond funds, int-term bond funds, stable value, i-Bonds, individual TIPS, TIPS funds, high-interest FDIC insured CD's, etc.), the OP just concludes that many holdings are not needed and that's the way to achieve simplicity. I am actually seeing in this thread that everyone uses their own concept of simplicity. The definition of "simple" could be very personal, some may want simply one fund, others may want a simple way to account for unexpected inflation, while others may want to get a guaranteed high-interest rate (compared to TBM yield) from a FDIC insured CD, thus avoiding any NAV fluctuation, etc. Just like Taylor likes to say, there are many roads to Dublin. Could there be many roads to simplicity as well?

Anyway -
1) List the bond funds, individual bonds, CD's, etc. that you invest in
VG Total Bond Market, VG short-term investment grade, VG inter-term investment grade, non-brokered CD

2) In which account what fixed income securities are held
401k, Rollover IRA

3) Allocation as a percentage of Fixed Income
[Correction, as percentage of fixed income]: 40%, 30%, 15%, 15%

4) Allocation to bonds overall (i.e. age in bonds, etc.)
18% (not related to age, at all)

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
Not really. Move some short-term inv-grade to CD's (may be), but no, not really. Too lazy.
Last edited by Code Commit on Thu Jan 30, 2014 7:29 pm, edited 1 time in total.
User avatar
Peter Foley
Posts: 5153
Joined: Fri Nov 23, 2007 10:34 am
Location: Lake Wobegon

Re: Bonds - Throw it all on the table!!!

Post by Peter Foley »

livesoft wrote:
I would be curious if you have calculated the performance of your fixed income assets as in average annual return for the last 1, 3, 5, 10 years.
I know how well some fixed income assets have performed. Regular TIPs were only available in one of our deferred account - and only for about the last 5 years. Short term TIPs are only a couple years old and I moved funds from my 457 to an IRA to take advantage of that. That leaves Stable Value, Total Bond Fund, and older EE -bonds and I-bonds.

Over the past 10 years our three stable value funds have remained stable: 4.5% for deposits prior to 2002, 4.0% deposits through 2009 and 3.5% for deposits in 2010 - 2012.
EE Bonds (mid 1980's) - yield at 5.25% for many years.
I-bonds - the inflation adjustment changes every year, they are mostly with base rates of 2% to 3%.
Total bond fund is 2.62 for 10 year (using yahoo finance basic chart) and 6.47 for 5 years.

Total bond has had good and poor returns over a longer period as have Regular TIPs. Regular TIPs significantly underperformed Total bond last year. Total Bond and TIPs have market risk that the other holdings do not have. I would not hold TIPs if I-bonds were available in greater amounts.
Middle
Posts: 245
Joined: Tue Feb 08, 2011 7:15 pm

Re: Bonds - Throw it all on the table!!!

Post by Middle »

1) Total Bond Fund Index, Short Term Inv Grade Index, Loomis Sayles Strategic Income, Pimco Total Return.
2) All held in Roth, tIRA, and 401k.
3) I actually don't know the breakdown but I listed them in roughly descending order of allocation.
4) Age-40%. More aggressive than most, but I haven't liked the future of bonds for a number of years now.
5) I have been rebalancing over these last few months and will be shifting further to increase bond allocation.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

siamond wrote:Didn't we have a very similar thread a few days ago? Sounds to me that the OP is checking if we provide consistent answers, thread after thread... :wink:

1) List the bond funds, individual bonds, CD's, etc. that you invest in
=> FXSTX, PTRAX, VMATX, VWEHX, plus another HY fund in a Vanguard annuity
=> no individual bonds, no CD, no TIPS, nothing else

2) In which account what fixed income securities are held
=> VMATX in taxable securities, the rest in various tax-deferred vehicles

3) Allocation as a percentage of Fixed Income
=> I aim at 100%. Ok, there is always a tiny bit of cash lingering here and there. No emergency account (can't see the point).

4) Allocation to bonds overall (i.e. age in bonds, etc.)
=> AA is 75/25 (equities/bonds). Then bonds are roughly 55% total-bonds, 20% high-yield, 25% Munis, although I don't fret if such split varies a tad.
=> no age-in-bonds or equivalent progressive strategy. I'm just waiting for big milestones to reassess (e.g. large 'magic' number reached; I turn 65). Does this mean 'lost in space'? :happy

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
=> Will simplify a bit once my Deferred Comp Plan is over (exit PTRAX). Will probably reduce HY to 10% if & when regular bonds come back to better yields.
=> I might reassess the use of munis once I am fully retired (with a much lower tax rate) and regular bonds come back to better yields.
=> I decided against TIPS and Int'l Bonds. I never tried to use CDs or Individual Bonds though, maybe one day, I'll play around and see what goes. I have little urge to do so though.
Exactly! I noted in the opening post that polls often are challenging and difficult to find the right options. After starting a thread and receiving responses it sometimes becomes apparent items or considerations that may have been left out. This thread was open ended in nature, and I must say the results have been excellent, beneficial, and informative to say the least. I would like to thank you for taking the time to participate in this thread.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

Code Commit wrote: I am actually seeing in this thread that everyone uses their own concept of simplicity.
I would agree with you. Investors must determine what works for their portfolio based on time frame, goals, and tolerance for risks.

Best.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
White Coat Investor
Posts: 14948
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Bonds - Throw it all on the table!!!

Post by White Coat Investor »

richard wrote:
EmergDoc wrote:
richard wrote:
ot1138 wrote:I keep all fixed income in taxable accounts. This is the opposite of what the wiki suggests. My reasoning for this is that my future expected returns for equities will be significantly higher than bonds, so I'd rather shelter as much equities as I can in TAA accounts.
It really depends on your numbers, but that often is not the best strategy.

A large part, if not most, of equity returns are increases in value (as opposed to yield), which accumulate tax-free, so there would be no current tax on this portion if held in taxable. When you start spending from the portfolio, sales of stock in taxable are taxed at capital gains rates, while withdrawals from a 401(k) or IRA are taxed at ordinary income rates, which are likely to be higher. Also, remember that reinvested yield increases total basis.
On the contrary, in our low yield times, it is the right strategy for almost everyone. Run the numbers and you'll see. You have to consider not only the tax-efficiency of the asset, but also the expected return. Several changes in recent years make bonds in taxable much more attractive.

1) Low yields/low expected returns for bonds
2) Higher taxes on stocks- 23.8% for some
3) Smaller, sometimes even negative, difference between muni yields and treasury yields

Run the numbers for yourself. You might be very surprised. I don't have a taxable account, but if I did, it would be filled with I Bonds and Munis. This can be altered, of course, if you donate appreciated shares of equities to charity or just plan to hold them to death to get the step-up in basis then. But for anyone in a moderate to high tax bracket actually planning to sell their equities at some point, you're going to want bonds in taxable.
Lower bond yields, less of a spread between capital gains taxes and ordinary income taxes and less of a spread between munis and treasuries all push against the conventional advice of holding tax efficient stocks (and munis) in taxable and bonds (and tax inefficient stocks) in tax-deferred accounts. How far they push depends on the numbers.

I find it hard to believe all of the factors you list will persist, although anything is possible. A slower economy associated with low bond yields should also diminish stock returns, higher taxes on stocks depends on income level, the spread between ordinary rates and capital gains rates can easily change and at some point the traditional positive spread between munis and treasuries should return.

Assume no yield on stocks or bonds and that stocks increase in value over time. Holding stocks in taxable results in no tax until they are sold, with increases in value taxed at capital gains rates. Holding stocks in tax-deferred results in no tax until they are withdrawn, with withdrawals taxed at ordinary income rates. So long as cap gains rates are lower than ordinary income rates, holding stocks in taxable wins. Add interest on bonds and dividends on stocks and it becomes a question of numbers (further complicated by the frequently debated question of whether one should discount the value of assets, especially in tax-deferred, due to tax rates).
Your analysis is too simplistic as you are not accounting for the benefit of the additional tax-protected space, one of the biggest reasons to put the higher returning asset into the tax-protected account. You are only analyzing the tax efficiency aspect.

Even if those factors don't persist, it is far easier to change from bonds in taxable to stocks in taxable than vice versa, as there are few capital gains with bonds and thus little tax penalty to pay for a change in strategy.

I have a post coming up on Monday on this topic on the blog. I wrote it more than a month ago, it's just been waiting in queue. I was VERY surprised to see how much better bonds in taxable is.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
linenfort
Posts: 2241
Joined: Sat Sep 22, 2007 9:22 am
Location: #96151D

Re: Bonds - Throw it all on the table!!!

Post by linenfort »

Code Commit wrote: I am actually seeing in this thread that everyone uses their own concept of simplicity. <snip> Could there be many roads to simplicity as well?
So true. Maybe simplicity = what you can easily handle.
2beachcombers
Posts: 645
Joined: Sat Jul 31, 2010 5:10 pm
Location: Savannah

Re: Bonds - Throw it all on the table!!!

Post by 2beachcombers »

abuss368 wrote:Bogleheads there have been many excellent threads over the last couple of weeks related to bonds. I started a couple with polls and the results were excellent. Often a poll is limited, needs more options, etc.

I would like to try an open ended thread on your personal bond strategy.

1) List the bond funds, individual bonds, CD's, etc. that you invest in
2) In which account what fixed income securities are held
3) Allocation as a percentage of Fixed Income
4) Allocation to bonds overall (i.e. age in bonds, etc.)
5) Any other plans such as adding more bonds funds, consolidating and merging, etc.



1. Muni Ladder,VBIIX, high yield, corp. Ibonds, Bank of Dad loans,(also consider my SS as Tips equivalent_)
2 muni-taxable, next 3 in IRAs
3 70% w/o SS; 62% considering SS
4 Allocation for Grand kids--so I should be more aggressive but like the 70/30 ring.
5 Will add more VBIIX and muns as Bank of Dad loans come in :P and will move away from HY and Corps
Plan is Bond fund, Ibonds, and Munis

Interesting post

jerry

Best.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

This thread has received a lot of really good responses. This has been especially helpful and interesting to read the various strategies Bogleheads use in terms of bonds.

Best.
John C. Bogle: “Simplicity is the master key to financial success."
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: Bonds - Throw it all on the table!!!

Post by letsgobobby »

abuss368 wrote:Bogleheads there have been many excellent threads over the last couple of weeks related to bonds. I started a couple with polls and the results were excellent. Often a poll is limited, needs more options, etc.

I would like to try an open ended thread on your personal bond strategy.

Please simply note:

1) List the bond funds, individual bonds, CD's, etc. that you invest in
2) In which account what fixed income securities are held
3) Allocation as a percentage of Fixed Income
4) Allocation to bonds overall (i.e. age in bonds, etc.)
5) Any other plans such as adding more bonds funds, consolidating and merging, etc.

Hopefully this thread provides an inside peak into how Bogleheads manage their fixed income allocation and will help other investors.

Best.
1, 2, 3. Fixed income is split 46% VBMFX in wife's 403b and 401a and Fidelity US Bond index in my 403b/401a/457b. 46% stable value fund paying 1.55% in my 403b/401a/457b. Yikes, that rate is down a lot, I'm going to have to do something about that. 8% I bonds.

4. My goal is age in bonds, so I'm currently 40% and age 40. That is flexible depending on PE10.

5. In order to get out of that stable value fund without changing my asset allocation, I'd have to convert some of our 403b/401a fixed income to stocks; and convert some of our Roth IRA stocks to fixed income, either getting a CD or using a Vanguard fund like TBM or TIPS. I hate the thought of giving up a large part of my future equity gains to the government, and I hate the thought of giving up Roth IRA space to fixed income. So I don't really see an easy way to switch things around much. Just at the end of 2013, with the ten year treasury touching 3%, I had thoughts of rebalancing some of my SVF into my TBM to get closer to 60% TBM and 32% SVF, but obviously the environment has changed enough the last month that I see no urgency now, and I'll probably just sit and do nothing.
Johm221122
Posts: 5193
Joined: Fri May 13, 2011 6:27 pm

Re: Bonds - Throw it all on the table!!!

Post by Johm221122 »

Bonds 30% of portfolio
EE bonds 4%(2000-2001 year)
I bonds 2%(2001-2002)
((401) stable value 18% paying 1.41%
(Roth) spectrum income 5%
A little under weight, going to add Total bond in Roth next time my plan says to increase bond percentage
John
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

Johm221122 wrote:Bonds 30% of portfolio
EE bonds 4%(2000-2001 year)
I bonds 2%(2001-2002)
((401) stable value 18% paying 1.41%
(Roth) spectrum income 5%
A little under weight, going to add Total bond in Roth next time my plan says to increase bond percentage
John
Adding the Vanguard low cost and diversified Total Bond Index fund to a portfolio will be a wise decision.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
500Kaiser
Posts: 173
Joined: Sat Mar 14, 2009 3:00 am
Location: Ireland

Re: Bonds - Throw it all on the table!!!

Post by 500Kaiser »

33% Stable
33% Short Term Bond Index for rebalancing dry powder
33% Intermediate Term Treasury
All in Tax deferred

Plus collection of Ibonds

Age minus 5 in Bonds

Used to be 100% Stable, but post 2008, diversified into other 2, just in case......

Occasionally debate with myself about TBM, IT Treasury, IT Bond Index. Have never switched, and know that any of these 3 are ok, but that doesn't stop the debate with myself.

Intent is to roll 50% of FI into TIPS Ladder for Flooring if 10 year TIPS start to go above 2%

Excellent thread, thanks for initiating.
Higher risk = higher HOPEFUL returns, not expected returns.
sanfran
Posts: 22
Joined: Wed Nov 20, 2013 11:39 pm

Re: Bonds - Throw it all on the table!!!

Post by sanfran »

Great thread title.

403b: 60% TIAA Traditional & 40% TBM.

Age minus 10 in fixed income. No plans for more at the moment.
bargainhuntingking
Posts: 220
Joined: Wed May 14, 2008 3:48 am

Re: Bonds - Throw it all on the table!!!

Post by bargainhuntingking »

Total fixed allocation: 25% fixed (which is approx equal to age minus 20, but I plan to stay at only 25% for a while, then perhaps change to 50% at retirement)

1/3 Total Bond Index (Schwab ETF) in 401k

1/3 Intermediate Treasuries Index (Schwab ETF) in 401k

1/3 Divided equally between Vanguard TIPS fund (in 401k) and Vanguard Total International Bond Index (in Roth)

Future plans: Add Vanguard Muni Bond fund to taxable; possibly add a small amount to a money market fund to taxable.
User avatar
kenyan
Posts: 3002
Joined: Thu Jan 13, 2011 12:16 am

Re: Bonds - Throw it all on the table!!!

Post by kenyan »

1) List the bond funds, individual bonds, CD's, etc. that you invest in
Vanguard Int-Term Bond Index VBIIX
Vanguard TIPS VAIPX
5-year CDs held at Ally Bank, not considered part of retirement portfolio.


2) In which account what fixed income securities are held
Bond funds held in pretax retirement accounts

3) Allocation as a percentage of Fixed Income
65% nominals, 35% TIPS

4) Allocation to bonds overall (i.e. age in bonds, etc.)
26% by design, currently closer to 23-24%

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
Occasionally toy with the idea of adding more corporates, but not seriously. There are other, higher priority ideas on my annual IPS review. I consolidated TBM + IT-Term into all IT-Term last year for simplicity.
Retirement investing is a marathon.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

I believe it is fair to say that Bogleheads employ many different strategies in terms of bonds in their portfolios.

I am of the opinion that whether an investor invests in one or more bond funds, the end result is probably close to the same over the long term. Would this be a fair and reasonable assessment?
John C. Bogle: “Simplicity is the master key to financial success."
poppa23
Posts: 151
Joined: Sat May 12, 2012 1:24 pm

Re: Bonds - Throw it all on the table!!!

Post by poppa23 »

abuss368 wrote:
poppa23 wrote:70 /30 Bond Stock... I feel I dont need to take any risk as I have hit our number and I still have 10 years to work to increase that number..
Congrats! Isn't that a great position to be in?
Thank you Im very fortunate.....hard work has paid off.
User avatar
telemark
Posts: 2763
Joined: Sat Aug 11, 2012 6:35 am

Re: Bonds - Throw it all on the table!!!

Post by telemark »

1) List the bond funds, individual bonds, CD's, etc. that you invest in

An unnamed fund that tracks the Barclays US Aggregate Bond index
An unnamed fund that track the Barclays US TIPS index
Pioneer Bond Fund Class Y (PICYX)
Templeton Global Bond Fund Advisor Class (TGBAX)
Vanguard Inflation-Protected Securities (VIPSX)
Vanguard Long-Term Treasury Fund (VUSTX)

2) In which account what fixed income securities are held

The first two in my old 401K, the middle two in my current 401K, the last two in my Roth IRA

3) Allocation as a percentage of Fixed Income

100%

4) Allocation to bonds overall (i.e. age in bonds, etc.)

40%

5) Any other plans such as adding more bonds funds, consolidating and merging, etc.

Will roll over my current 401K to an IRA at the earliest opportunity. I also have some money in I Bonds, but consider that part of my emergency fund rather than an investment.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

poppa23 wrote:
abuss368 wrote:
poppa23 wrote:70 /30 Bond Stock... I feel I dont need to take any risk as I have hit our number and I still have 10 years to work to increase that number..
Congrats! Isn't that a great position to be in?
Thank you Im very fortunate.....hard work has paid off.
No problem. Posts such as yours only motivates the accumulators! The discipline and low cost investment strategy can work and hopefully pay off at retirement.
Last edited by abuss368 on Fri May 23, 2014 9:49 pm, edited 1 time in total.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

I was just looking back at my thread. I feel like this was an excellent thread with a lot of really great responses.

Thank you Bogleheads!
John C. Bogle: “Simplicity is the master key to financial success."
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: Bonds - Throw it all on the table!!!

Post by letsgobobby »

EmergDoc wrote: I don't have a taxable account, but if I did, it would be filled with I Bonds and Munis.
I was just rereading this and want to understand a few things.

I know you have recently accumulated a 7 figure portfolio, yet you have no taxable account. So your entire 7 figures must be in pretax and Roth accounts, and I gather the vast majority are in pretax accounts. Doesn't this mean you have created a very large future tax liability that will be taxed at your marginal tax rate? And I assume that will never be under 25%, and with state tax could be considerably higher?

In contrast, if you'd had a taxable account and filled it with stocks, those would be taxed at closer to 15%, maybe a little higher, but certainly never 25% (I realize that's the meat of the other discussion and don't really mean to resurrect that conversation here)?

Meanwhile, since there is a good chance you will leave an estate upon death, wouldn't you like to take advantage of the step up in basis for highly appreciated assets in taxable, assets such as equities? I know I would! So it's 15%+ on a higher base, yes, but only on the portion that you actually sell/redeem. The portion that you plan to leave for heirs might never be taxed at all, and 0% tax rate is pretty hard to beat or achieve from 7 figure pretax accounts.

Under current economic conditions (low yields, certain tax rules), standard asset location advice has been turned on its head and we've had lots of discussions about there here. But I still get stuck on the above considerations.

Our bond AA is:

10% I bonds in taxable

And in his and hers 403b/401a/457b
45% stable value fund
45% VBMFX

I refuse to put bonds in Roth IRAs and will buy munis in taxable before doing so.

I don't like our SVF with rates currently in the 1.5% range and at the beginning of the year I had planned to shift about half of SVF to VBMFX. Unfortunately the bond market got away from me before I had done anything and with yields having fallen significantly since then, I'm just going to stay the course now.
User avatar
Topic Author
abuss368
Posts: 22110
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!
Contact:

Re: Bonds - Throw it all on the table!!!

Post by abuss368 »

letsgobobby wrote:
EmergDoc wrote: I don't have a taxable account, but if I did, it would be filled with I Bonds and Munis.
I was just rereading this and want to understand a few things.

I know you have recently accumulated a 7 figure portfolio, yet you have no taxable account. So your entire 7 figures must be in pretax and Roth accounts, and I gather the vast majority are in pretax accounts. Doesn't this mean you have created a very large future tax liability that will be taxed at your marginal tax rate? And I assume that will never be under 25%, and with state tax could be considerably higher?

In contrast, if you'd had a taxable account and filled it with stocks, those would be taxed at closer to 15%, maybe a little higher, but certainly never 25% (I realize that's the meat of the other discussion and don't really mean to resurrect that conversation here)?

Meanwhile, since there is a good chance you will leave an estate upon death, wouldn't you like to take advantage of the step up in basis for highly appreciated assets in taxable, assets such as equities? I know I would! So it's 15%+ on a higher base, yes, but only on the portion that you actually sell/redeem. The portion that you plan to leave for heirs might never be taxed at all, and 0% tax rate is pretty hard to beat or achieve from 7 figure pretax accounts.

Under current economic conditions (low yields, certain tax rules), standard asset location advice has been turned on its head and we've had lots of discussions about there here. But I still get stuck on the above considerations.

Our bond AA is:

10% I bonds in taxable

And in his and hers 403b/401a/457b
45% stable value fund
45% VBMFX

I refuse to put bonds in Roth IRAs and will buy munis in taxable before doing so.

I don't like our SVF with rates currently in the 1.5% range and at the beginning of the year I had planned to shift about half of SVF to VBMFX. Unfortunately the bond market got away from me before I had done anything and with yields having fallen significantly since then, I'm just going to stay the course now.
No TIPS fund?
John C. Bogle: “Simplicity is the master key to financial success."
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: Bonds - Throw it all on the table!!!

Post by letsgobobby »

Neither of our employers 403b/401a accounts offers a TIPS fund, and I don't want to use the Roth space for fixed income. So, no. If real yields were 3-4%+ I'd assume stocks would also be profoundly more expensive and then I'd probably be willing to use some of that Roth space for TIPS, but not at this point.
Dandy
Posts: 6384
Joined: Sun Apr 25, 2010 7:42 pm

Re: Bonds - Throw it all on the table!!!

Post by Dandy »

Age 66 overall allocation 42% equity 58% fixed income. Approx 60% tax sheltered 40% taxable

Recent goals are to have 1/3 intermediate, 1/3 short term and 1/3 "safe" no loss of principal and have 20-25 years of retirement expenses in the latter two categories. Other than those two goals I don't worry too much about how fixed income is allocated between funds/products - main focus is equity vs fixed income.

Tax sheltered
Short and Intermediate: TIPS, Investment grade bond funds
Total Bond and Short term bond index
5yr brokered CD ladder (recently added 7yr and 10yr) each rung is equal to 1 year of retirement expense.

At age 70 might go to Retirement Income fund, CD ladder and short term corporate.

Taxable/u]
Short and Intermediate Muni
EE/HH bonds (legacy/inherited)
CD, High Yield Savings (funding retirement expenses for delay in SS until 70 and Roth Conversions)
Money Market Deposit account (funding for home improvements/major purchases)

At age 70 might go with Intermediate muni, High yield Savings.
pascalwager
Posts: 1869
Joined: Mon Oct 31, 2011 8:36 pm

Re: Bonds - Throw it all on the table!!!

Post by pascalwager »

1) List the bond funds, individual bonds, CD's, etc. that you invest in
2) In which account what fixed income securities are held
3) Allocation as a percentage of Fixed Income
4) Allocation to bonds overall (i.e. age in bonds, etc.)
5) Any other plans such as adding more bonds funds, consolidating and merging, etc.
1) I-bonds and cash.
2) I-bonds in Treasury Direct account, cash in bank savings.
3) I-bonds 7% of fixed income, cash 93% of fixed income.
4) I-bonds 1% of portfolio, cash 12% of portfolio.
5) Plan to purchase I-bonds annually, may gradually add other govt bonds.
User avatar
White Coat Investor
Posts: 14948
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Bonds - Throw it all on the table!!!

Post by White Coat Investor »

letsgobobby wrote:
EmergDoc wrote: I don't have a taxable account, but if I did, it would be filled with I Bonds and Munis.
I was just rereading this and want to understand a few things.

I know you have recently accumulated a 7 figure portfolio, yet you have no taxable account. So your entire 7 figures must be in pretax and Roth accounts, and I gather the vast majority are in pretax accounts. Doesn't this mean you have created a very large future tax liability that will be taxed at your marginal tax rate? And I assume that will never be under 25%, and with state tax could be considerably higher?

In contrast, if you'd had a taxable account and filled it with stocks, those would be taxed at closer to 15%, maybe a little higher, but certainly never 25% (I realize that's the meat of the other discussion and don't really mean to resurrect that conversation here)?

Meanwhile, since there is a good chance you will leave an estate upon death, wouldn't you like to take advantage of the step up in basis for highly appreciated assets in taxable, assets such as equities? I know I would! So it's 15%+ on a higher base, yes, but only on the portion that you actually sell/redeem. The portion that you plan to leave for heirs might never be taxed at all, and 0% tax rate is pretty hard to beat or achieve from 7 figure pretax accounts.

Under current economic conditions (low yields, certain tax rules), standard asset location advice has been turned on its head and we've had lots of discussions about there here. But I still get stuck on the above considerations.

Our bond AA is:

10% I bonds in taxable

And in his and hers 403b/401a/457b
45% stable value fund
45% VBMFX

I refuse to put bonds in Roth IRAs and will buy munis in taxable before doing so.

I don't like our SVF with rates currently in the 1.5% range and at the beginning of the year I had planned to shift about half of SVF to VBMFX. Unfortunately the bond market got away from me before I had done anything and with yields having fallen significantly since then, I'm just going to stay the course now.
First, I haven't accumulated a 7 figure portfolio, either recently or over the last decade while I"ve accumulated a large 6 figure portfolio. You must be referring to the chapter in my recent book that details how we became millionaires-If you read it you'll recall we counted home equity. At any rate, maybe we're at 7 figures now, I haven't been tracking that closely and haven't checked in months.

Second, yes I have a high future tax liability. All of my tax-deferred money will either have to come out and have taxes paid on it or will have to be donated to charity. But I don't look at it as a "high future tax liability." I look at it as having saved me a bundle in taxes, allowing me to live higher on the hog and save more. It's all perspective.

Third, it is not smart to deliberately pass up the opportunity to put money into tax-advantaged and asset protected accounts in order to invest in a taxable account for tax diversification purposes. Run the numbers and you'll see that's not smart unless you're using a tax-deferred account and you aren't getting much of a tax break now and expect to be in the highest brackets later. None of that applies to me. Of course I'd like a step-up in basis at death, but I'm not willing to give up all the awesome stuff that comes with using a retirement account to use it.

Fourth, I don't know why you think I won't be able to withdraw at least some of my tax-deferred money at 0%, 10%, and 15%. I expect to withdraw/convert quite a bit at those rates. What did you think I was going to fill the lower brackets with if not tax-deferred retirement account withdrawals?

Fifth, refusing to put bonds in Roth IRAs probably indicates you aren't tax adjusting your asset allocation. No advantage to doing that if you actually tax adjust your AA. It's just a riskier portfolio and you're likely to get paid for taking that risk.

Hope that helps. Thanks for the PM.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
cowboysFan
Posts: 290
Joined: Sat Jan 25, 2014 1:46 pm

Re: Bonds - Throw it all on the table!!!

Post by cowboysFan »

EmergDoc wrote: Fifth, refusing to put bonds in Roth IRAs probably indicates you aren't tax adjusting your asset allocation. No advantage to doing that if you actually tax adjust your AA. It's just a riskier portfolio and you're likely to get paid for taking that risk.

Hope that helps. Thanks for the PM.
How did you decide roths are riskier and how do you define risk? I think the only definition of risk that matters is the probability of running out of money.
scotthal
Posts: 185
Joined: Wed Nov 06, 2013 9:20 pm
Location: Portland, Oregon

Re: Bonds - Throw it all on the table!!!

Post by scotthal »

Age 60, retired; AA 60/34/6 equities:bonds:cash. As percentages of the bond allocation:

Taxable: 13% VMLUX - Limited term tax exempt

Rollover IRA: 11% VFSUX - Short term IG, 23% VFIDX - Intermediate term IG, 24% VWEAX - High-Yield corporate, 24% LSBDX

Roth IRA: nada - but for a small chunk of Wellesley; will change as I continue to convert over the next decade, utilizing the 15%/25% marginal tax brackets.
Last edited by scotthal on Mon May 26, 2014 1:33 am, edited 1 time in total.
Growtch, grinch; paranoid contrarian
User avatar
White Coat Investor
Posts: 14948
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Bonds - Throw it all on the table!!!

Post by White Coat Investor »

cowboysFan wrote:
EmergDoc wrote: Fifth, refusing to put bonds in Roth IRAs probably indicates you aren't tax adjusting your asset allocation. No advantage to doing that if you actually tax adjust your AA. It's just a riskier portfolio and you're likely to get paid for taking that risk.

Hope that helps. Thanks for the PM.
How did you decide roths are riskier and how do you define risk? I think the only definition of risk that matters is the probability of running out of money.
I never said Roths are riskier. I disagree that the only definition of risk that matters is the probability of running out of money. I think this might explain what your quote is discussing:

http://whitecoatinvestor.com/what-shoul ... friday-qa/

Basically, if you put stocks in Roths and bonds in Tax-deferred, that's the equivalent of having a more aggressive asset allocation with stocks in the tax-deferred.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: Bonds - Throw it all on the table!!!

Post by letsgobobby »

EmergDoc wrote: Fourth, I don't know why you think I won't be able to withdraw at least some of my tax-deferred money at 0%, 10%, and 15%. I expect to withdraw/convert quite a bit at those rates. What did you think I was going to fill the lower brackets with if not tax-deferred retirement account withdrawals?
This is the part I always forget! Social security will fill some but not all of your low bracket space.

I still prefer the traditional allocation advice, knowing I'll have relatively low future taxes because of a relatively small RMD. Plus I think I recall reading that if one planned not to consume all taxable assets in one's lifetime, the traditional allocation made more sense because of the immense value in the step up in basis for heirs. Like anything else, that is subject to change, of course.
cowboysFan
Posts: 290
Joined: Sat Jan 25, 2014 1:46 pm

Re: Bonds - Throw it all on the table!!!

Post by cowboysFan »

EmergDoc wrote:
cowboysFan wrote:
EmergDoc wrote: Fifth, refusing to put bonds in Roth IRAs probably indicates you aren't tax adjusting your asset allocation. No advantage to doing that if you actually tax adjust your AA. It's just a riskier portfolio and you're likely to get paid for taking that risk.

Hope that helps. Thanks for the PM.
How did you decide roths are riskier and how do you define risk? I think the only definition of risk that matters is the probability of running out of money.
I never said Roths are riskier. I disagree that the only definition of risk that matters is the probability of running out of money. I think this might explain what your quote is discussing:

http://whitecoatinvestor.com/what-shoul ... friday-qa/

Basically, if you put stocks in Roths and bonds in Tax-deferred, that's the equivalent of having a more aggressive asset allocation with stocks in the tax-deferred.

I thought you were making a comparison between a roth and taxable instead of between a roth and tax deferred. I like the idea of thinking of tax deferred as a roth with the government as a 20% owner or whatever your tax rates are.
User avatar
White Coat Investor
Posts: 14948
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Bonds - Throw it all on the table!!!

Post by White Coat Investor »

letsgobobby wrote:
EmergDoc wrote: Fourth, I don't know why you think I won't be able to withdraw at least some of my tax-deferred money at 0%, 10%, and 15%. I expect to withdraw/convert quite a bit at those rates. What did you think I was going to fill the lower brackets with if not tax-deferred retirement account withdrawals?
This is the part I always forget! Social security will fill some but not all of your low bracket space.

I still prefer the traditional allocation advice, knowing I'll have relatively low future taxes because of a relatively small RMD. Plus I think I recall reading that if one planned not to consume all taxable assets in one's lifetime, the traditional allocation made more sense because of the immense value in the step up in basis for heirs. Like anything else, that is subject to change, of course.
What is the traditional allocation advice? And Social Security won't be filling any of my low bracket space between when I retire at 50 (maybe) and when I start taking it at 70. Lots of time there for tax-deferred withdrawals (yes, you can do it before 59 1/2 via substantially equal payments) and conversions.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: Bonds - Throw it all on the table!!!

Post by letsgobobby »

Traditional advice is stocks in taxable, bonds in tax preferred.
Iorek
Posts: 1179
Joined: Fri Mar 08, 2013 9:38 am

Re: Bonds - Throw it all on the table!!!

Post by Iorek »

Bracket wrote:
abuss368 wrote:
tdirgins wrote: I was advised to dump VAIPX TIPS during my Vanguard portfolio review at the beginning of last year. I didn't. In hindsight, it turned out to be good advice, but I stuck to my original plan. (which was vetted on this very forum) :wink:
That is interesting. I have read a few threads lately where Bogleheads are noting Vanguard has recommended this.
Can anyone tell me why vanguard is advising people to dump this fund? I'd guess they are saying switch to the short term TIPS fund, or are they saying dump TIPS entirely? So far I have stuck with my intermediate term TIPS fund, despite it's less than stellar performance, but I'd be interested in hearing Vanguard's advice.
If you look at VG's target retirement funds, you can see that they hold short-term TIPS, but not until the last 5 years before retirement.

Also, FWIW I don't own a TIPS fund but I do own a decent chunk of i-bonds (and am more than 5 years from retirement). Vanguard did not advise me to redeem i-bonds, but they also told me I'd be better off buying munis in my taxable account than i-bonds. The rationale they gave was that equities would provide better inflation protection than i-bonds and munis would provide better returns than i-bonds. Not sure I agree with that approach, but I'm not sure I'll be buying fixed income in my taxable account in the near future anyway.
Post Reply