Well, there aren't many of us but I hate bonds, too.Vulcan wrote: ↑Sun Sep 17, 2023 4:08 pm May I be forgiven for an intentionally provocative thread title, but I have a confession to make:
I don't like bonds. Except I Bonds.
Yes, yes, I understand, efficient frontier, reduced volatility, sequence of returns risk, Trinity Study, and yada-yada-yada.
I also understand that if you hold the bond fund for its average duration, you are unlikely to lose any money.
So even TIPS funds didn't really protect their holders from unexpected inflation.
(I get it one could buy TIPS directly, but that is not something I am interested in ever pursuing, so let's leave that out; you still have to hold them to maturity to eliminate the interest rate risk).
And here is 70/30 VT/BND vs 100% VT:
A pretty harsh penalty for the "safety" of bonds.
Otherwise a responsible boglehead (having held without panicking since early 2000s), I find it difficult to convince myself to commit significantly to bond funds, lagging somewhat behind my already aggressive IPS, with most bond holdings in I Bonds (which, of course, would show as a perfect straight or a gently curving up line on the top chart, pre-tax). If I could fill my bonds bucket entirely with I Bonds, I would do that and call it a portfolio.
I once heard somewhere bonds were called "certificates of guaranteed confiscation", and it really struck a chord with me.
Can y'all talk some sense into me?
Maybe it's that I didn't take my cod liver oil as a kid but in nearly 40 years of investing, I've never made a dime on bonds.
Bought in the secondary market, pricing is opaque. Buying and selling them in a brokerage account requires guessing interest rates, credit risk and a boatload of other factors that make it impossible for anyone except the middlemen to profit. At auction or via a brokered CD, they're uninteresting.
I'm tired of experts telling me...imploring me...to do something I stink at and, in contrast to equities, I've never been successful at doing. Too much risk for you in equities? Keep five years of cash on hand. (I can't wait for the responses to that idea, even though now you can probably do better with T-bills than you could with "safe" bonds.)
This is a case of the Bogelheads world rationalizing what it wants to be true vs. what is empirically true: bonds suck.