Bonds, cds, or.....?

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Bonds, cds, or.....?

Post by leftcoaster » Sat Aug 01, 2020 11:22 am

Bond yields are basically zip, aside from savings bonds.

CD returns are also low.

Stock dividends are still stocks, with the attendant risk

REITs are also still stocks, and a lot of rent paying businesses, aren’t.

What’s left to de-risk equities? Or just suck it up and hold cash/bonds?

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Re: Bonds, cds, or.....?

Post by willthrill81 » Sat Aug 01, 2020 12:08 pm

If you're just looking to reduce the volatility of your portfolio, bonds are still a fine choice. But they are unlikely to do more than match inflation over the next decade. You can get a slightly better yield from CDs right now; Magnify Money shows one credit union currently offering a 5 year CD paying 1.97%.
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Re: Bonds, cds, or.....?

Post by Gadget » Sat Aug 01, 2020 12:24 pm

EE bonds and I bonds

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Re: Bonds, cds, or.....?

Post by sycamore » Sat Aug 01, 2020 12:45 pm

Not many options nowadays. Try to make the most of your fixed income: high-yield savings accounts, bank or brokerage signup bonuses, maximize credit card cash back, etc. Grabbing a few 0.25% or .5% returns here and there can make up for lousy savings account yield.

Or... invest some of your fixed income in your human capital: improve productivity of existing skills, learn new skills, seek new employment opportunities.

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Re: Bonds, cds, or.....?

Post by Robot Monster » Sat Aug 01, 2020 12:46 pm

Riskier bond funds will give you more yield.

Vanguard Ultra-Short-Term Bond Fund Admiral Shares (VUSFX)
30 day SEC yield 1.08%

Vanguard High-Yield Corporate Fund Investor Shares (VWEHX)
30 day SEC yield 4.42%

Not recommending this route because I do not know your goals not situation. Just putting alternatives out there in case you're not aware of them. The second fund is a junk bond fund...obviously that's very risky so beware. (Perhaps because of this I might not have mentioned them.)
Investors often exhibit a tendency to evaluate the performance of their portfolio over very short horizons (e.g. days) even when their actual investment time horizon is quite long (e.g. decades).

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