Bond allocation?

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playahal
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Joined: Thu Jul 28, 2022 9:56 am

Bond allocation?

Post by playahal »

Retired with 250 K to invest in bonds. Thoughts on splitting between BND and SCHP and possibly one other to keep it fairly simple. Age is 73 with current mix of 60% equities, 40% money market at 2.0 % .
Varsh
Posts: 111
Joined: Fri Mar 18, 2022 9:50 am

Re: Bond allocation?

Post by Varsh »

BND is a good overall fund. It is about 70 Govt/treasury's.... It depends on your duration... I am 58 and still in the growing
the account stage, so I am 60/40 to... ish...maybe slightly higher stock to bond as we speak, My bond allocation is with treasury's. I do half long (VGLT) 20%, half intermediate, (VGIT) 20%. I too may add SCHP at some point, but can't say for sure. It looks like my retirement allocation too may remain 60/40...

I hear you with SCHP, its a good inflation hedge, but if inflation normalizes or falls at some point, it is engineered to underperform, but it is widely used. It all depends on how it fits in your IPS, and plans. I hope MHO helps.
MikeG62
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Re: Bond allocation?

Post by MikeG62 »

playahal wrote: Fri Aug 12, 2022 6:25 am Retired with 250 K to invest in bonds. Thoughts on splitting between BND and SCHP and possibly one other to keep it fairly simple. Age is 73 with current mix of 60% equities, 40% money market at 2.0 % .
You'd be pretty unhappy with BND had you made this move in December of 2021. Fund is down >9% YTD. Fed is increasing rates and it's hard to predict what the impact of that will be on bond funds (especially bond funds with 8+ years duration).

I am investing in Treasuries instead of bond funds. I was lucky to get out of bond funds/etf's in the fall of 2021. Some dumb luck no doubt, but felt rates had no where to go but up given what was happening with inflation at that time.

You could build a Treasury ladder (with auto renew if bought through Fidelity) and be done with it for a while. Once the Fed gets closer to being done you can revisit investing in a bond fund like BND. That's what I would do. YMMV.
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vineviz
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Re: Bond allocation?

Post by vineviz »

playahal wrote: Fri Aug 12, 2022 6:25 am Retired with 250 K to invest in bonds. Thoughts on splitting between BND and SCHP and possibly one other to keep it fairly simple. Age is 73 with current mix of 60% equities, 40% money market at 2.0 % .
60% stocks, 20% BND, and 20% SCHP would certainly be an entirely reasonable asset allocation for retirement.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
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