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AngelMay asks,

Do you think it is unwise for me to hold bonds in funds such as Wellington and Wellesley Income?


It doesn't matter where you hold them. If interest rates rise, the value of bonds fall -- and bonds with longer maturities fall further.

Even something relatively "safe" like the Vanguard Short-Term Bond Fund (VFSTX) had lost 2% of its asset value before the Fed decided to continue the bond buying program a few weeks ago.

If you really want to be safe, I'd buy individual Treasury securities or FDIC-insured CDs and hold them to maturity. Mutual funds don't have a maturity date, so you're not guaranteed the return of your principal.

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