Safe place to move cash for better return

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lawman3966
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Location: Tacoma WA

Safe place to move cash for better return

Post by lawman3966 » Tue Dec 05, 2017 9:54 pm

Over the last few years, I've placed my non-stock assets in money market funds to avoid bond fund losses that many pundits said would arise from interest rate increases. I would now like to move some of this cash into either short term bond funds or CDs.
I'm writing to get recommendations for funds and/or ETFs for this purpose. In case it's relevant, I have cash for this purpose in Fidelity taxable and retirement accounts, and in Vanguard retirement accounts.

livesoft
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Re: Safe place to move cash for better return

Post by livesoft » Tue Dec 05, 2017 10:40 pm

I am not sure it is a safe place, but I use the Vanguard Short-term Corporate Bond Index fund (VCSH / VSCSX). It is probably the most risky of the 9 or so Vanguard short-term bond funds. SEC yield is reported now to be 2.39%. One year return is reported to be 2.5%. It can lose money, too.
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whodidntante
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Re: Safe place to move cash for better return

Post by whodidntante » Tue Dec 05, 2017 11:19 pm

IF you have a 401k AND that 401k has a stable value fund, you could buy that and then buy whatever you want in the taxable and IRA accounts. Your exposure would net out and you would have both safety and liquidity assuming no trading restrictions. You might also save some tax.

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mega317
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Re: Safe place to move cash for better return

Post by mega317 » Wed Dec 06, 2017 12:23 am

What's the money for? If long-term (e.g. retirement) then you shouldn't worry about interest rate changes and fluctuations in price. If short term, then short-term bonds or CDs, or a savings account or iBonds or cash under the mattress, could be appropriate--the yield differences will be so low that it hardly matters what you do.

dbr
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Re: Safe place to move cash for better return

Post by dbr » Wed Dec 06, 2017 10:16 am

If you mean would someone name a short term bond fund or tell you to put the money in CDs, then now you have one named short term bond fund that makes sense to me. I will add the comment that you could/should put the money in CDs.

A different point of view, which I support, is the one added by mega317. I personally keep most of my fixed income in intermediate bonds and there is about 2% of the portfolio that sloshes around in cash.

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