Safer and better alternatives to BND

[smartinvestor2020]

I have a well laid out plan of action. I am a planner by nature. I do not change strategies based on the current environment. I stay the course.

Yet you also said right now you want to be in very short term fixed instruments because of higher rates, but at some point you will invest in Long term to "lock in the rate".
Isn't that the definition of changing strategies based on the environment? Right now you collecting the higher short term rates, and when the TIME feels RIGHT, you are going to then lock in long term rates...ostensibly because you feel those long term rates would fall from their current 4% coupon.

It's clear to me that many people on this forum don't have a lot respect for my opinions and strategies because they often go against the boglehead philosophy. Thinking differently is the primary reason that I have been somewhat successful in many aspects of my life including investing.

I don't think that is accurate. I think what is happening right now is that some on this forum are pointing out that your very words have some inconsistencies, as well as some of your word usage doesn't seem accurate or appropriate (for example "safe and better").

Good luck to you. Just remember, regardless of your successes- anyone who invested say a whopping $100 dollars in certain investment in 2009 currently have an 8 figure portfolio... point being someone can always do well despite the wisdom of their choices.

I do not make investment decisions based on how I feel. One of my golden investment rules is to NEVER make decisions based on feeling or emotions.

I don't think it is worthwhile to disclose the details of my overall investment strategy as it is very complex and has many moving parts. This would only lead to more potential criticism. All I can say is that I've been successful as a self directed investor managing this portfolio in the same way that I have for almost 20 years.

If I was "full of it" like another poster stated, I wouldn't be where I am now financially independent in my early 40s on a mediocre income. I have managed every penny of my income since my mid 20s starting with a huge amount of student load debt and a low income.

I will simply say that:

a) Investment strategies with many moving parts run fully counter to Bogleheads' philosophies. We're just the wrong audience if that's your thing.

There are good reasons such strategies are persona-non-grata in these parts. The individual investor's biggest risks are behavioral, as evidenced by the return gap among self-managed retail portfolios vs. comparable target date funds. The more one touches their portfolio, the more likely one is to make a mistake or panic.

b) Everyone is successful in a roaring bull market. When the tide goes out, you find out who's been swimming nekkid.

There are many reasonable bond strategies. BND is a good solid default. Some people try to match their investment duration (this is my personal choice), others like a simply intermediate Treasury fund, some like TIPS, others like cash or T-bills. Some go the other direction and use 50/50 corporate/Treasury funds like BIV or BLV (Vanguard intermediate and long term bonds, respectively), which was Jack Bogle's preferred choice anyways.

These are all reasonable Bogleish approaches. They're low-cost buy-and-hold index strategies. That is the tale of Bogle's investment philosophy. The rest is detail.

Buying and holding one fund or focusing on one duration forever isn't a good strategy. Choosing to ladder treasuries OR buy a treasury bond etf isn't the best strategy. Picking something specific and sticking to it forever isn't a good strategy.

[smartinvestor2020]

It seems like I cannot hold short and long term bonds simultaneously and have a strategy.

It seems like I cannot have a treasury bond ladder and a bond etf and have a strategy.

It seems like I need to pick something very specific and stay with it forever.

Thanks for the replies here. I disagree with the boglehead investment philosophy as I have for my entire investing career.

I will say that BND is probably a good choice for the average investor. In fact the 3 fund VTI, VXUS, and BND is a good strategy for the average investor.

[HawkeyePierce]

I have a well laid out plan of action. I am a planner by nature. I do not change strategies based on the current environment. I stay the course.

Yet you also said right now you want to be in very short term fixed instruments because of higher rates, but at some point you will invest in Long term to "lock in the rate".
Isn't that the definition of changing strategies based on the environment? Right now you collecting the higher short term rates, and when the TIME feels RIGHT, you are going to then lock in long term rates...ostensibly because you feel those long term rates would fall from their current 4% coupon.

It's clear to me that many people on this forum don't have a lot respect for my opinions and strategies because they often go against the boglehead philosophy. Thinking differently is the primary reason that I have been somewhat successful in many aspects of my life including investing.

I don't think that is accurate. I think what is happening right now is that some on this forum are pointing out that your very words have some inconsistencies, as well as some of your word usage doesn't seem accurate or appropriate (for example "safe and better").

Good luck to you. Just remember, regardless of your successes- anyone who invested say a whopping $100 dollars in certain investment in 2009 currently have an 8 figure portfolio... point being someone can always do well despite the wisdom of their choices.

I do not make investment decisions based on how I feel. One of my golden investment rules is to NEVER make decisions based on feeling or emotions.

I don't think it is worthwhile to disclose the details of my overall investment strategy as it is very complex and has many moving parts. This would only lead to more potential criticism. All I can say is that I've been successful as a self directed investor managing this portfolio in the same way that I have for almost 20 years.

If I was "full of it" like another poster stated, I wouldn't be where I am now financially independent in my early 40s on a mediocre income. I have managed every penny of my income since my mid 20s starting with a huge amount of student load debt and a low income.

I will simply say that:

a) Investment strategies with many moving parts run fully counter to Bogleheads' philosophies. We're just the wrong audience if that's your thing.

There are good reasons such strategies are persona-non-grata in these parts. The individual investor's biggest risks are behavioral, as evidenced by the return gap among self-managed retail portfolios vs. comparable target date funds. The more one touches their portfolio, the more likely one is to make a mistake or panic.

b) Everyone is successful in a roaring bull market. When the tide goes out, you find out who's been swimming nekkid.

There are many reasonable bond strategies. BND is a good solid default. Some people try to match their investment duration (this is my personal choice), others like a simply intermediate Treasury fund, some like TIPS, others like cash or T-bills. Some go the other direction and use 50/50 corporate/Treasury funds like BIV or BLV (Vanguard intermediate and long term bonds, respectively), which was Jack Bogle's preferred choice anyways.

These are all reasonable Bogleish approaches. They're low-cost buy-and-hold index strategies. That is the tale of Bogle's investment philosophy. The rest is detail.

Buying and holding one fund or focusing on one duration forever isn't a good strategy. Choosing to ladder treasuries OR buy a treasury bond etf isn't the best strategy. Picking something specific and sticking to it forever isn't a good strategy.

With all due respect:

Says who?

[chassis]

It seems like I cannot hold short and long term bonds simultaneously and have a strategy.

It seems like I cannot have a treasury bond ladder and a bond etf and have a strategy.

It seems like I need to pick something very specific and stay with it forever.

Thanks for the replies here. I disagree with the boglehead investment philosophy as I have for my entire investing career.

I will say that BND is probably a good choice for the average investor. In fact the 3 fund VTI, VXUS, and BND is a good strategy for the average investor.

Points 1 and 3 above are factually incorrect. There is alot of groupthink on this site to be sure, the chaff. There is wheat to be sifted if you hang around.

[Northern Flicker]

Thanks for the replies here. I disagree with the boglehead investment philosophy as I have for my entire investing career.

Then why are you soliciting input from users of the bogleheads site?

[toddthebod]

If I was "full of it" like another poster stated, I wouldn't be where I am now financially independent in my early 40s on a mediocre income. I have managed every penny of my income since my mid 20s starting with a huge amount of student load debt and a low income.

This is the second thread you have started where you have claimed a "complex strategy" about which you share no details that you use to get better returns than the "Boglehead philosophy" with which you disagree.

By the way, I suspect the reason you are "financially independent in my early 40s on a mediocre income" is that you didn't get married or have kids.

[nisiprius]

...I don't think it is worthwhile to disclose the details of my overall investment strategy as it is very complex and has many moving parts. This would only lead to more potential criticism. All I can say is that I've been successful as a self directed investor managing this portfolio in the same way that I have for almost 20 years.

You cannot expect us to respect "a secret strategy I won't disclose that is better than yours and has made me rich." That sounds like what people selling courses say in ads.

I do not make investment decisions based on how I feel. One of my golden investment rules is to NEVER make decisions based on feeling or emotions.

And yet you constantly have been referencing your feelings and emotions as your motivations, e.g.

I've said more than once that I don't like the correlation of corporate bonds to stocks. Long term treasuries have interest rate risk of course but as I've mentioned several times, I feel more comfortable holding a long term treasury bond to maturity than holding a bond fund with no guarantee of the return of principal.

Recently, you said:

I will say that BND is probably a good choice for the average investor. In fact the 3 fund VTI, VXUS, and BND is a good strategy for the average investor.

In your initial post, you asked the question,

Why is BND considered the best choice by bogleheads for the fixed income side of the portfolio?

Recently, you said:

I will say that BND is probably a good choice for the average investor. In fact the 3 fund VTI, VXUS, and BND is a good strategy for the average investor.

It seems that you have found the answer.

[welderwannabe]

Although bogleheads say not to time the interest rate market

You must be on a different forum than I. Over the last 17 months, half of the posts I see are about timing interest rates, especially on the shorter end of the curve.

[dbr]

Although bogleheads say not to time the interest rate market

You must be on a different forum than I. Over the last 17 months, half of the posts I see are about timing interest rates, especially on the shorter end of the curve.

There are jillions of things [capital B]Bogleheads say that jillions of [small b] boglehead posters on this forum don't follow.

I think it is a good idea to not do any investing according to what "is said" somewhere or on this forum in particular but rather to invest by understanding how things work and then choose what is a fit to one's own objectives and preferences. That does imply that investors take personal responsibility for the consequences of their choices.

[LadyGeek]

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