I added to my Vanguard bond funds Friday as I think we are at or close to a peak in rates. Specifically I added mostly Short Term Corporate (VFSTX) because it is at a 4 year low. I also added some Int term treasuries (VFITX). I recommend these along with Int Term Corps (VFICX). I favor VFICX in my tax exempt account (higher yield) and VFITX in my taxable account (no state taxes).Sure, the Feds may raise rates a couple more times (I hope that cools off the stock mania), but I don't think that will punish bonds very much as the Feds are behind the curve and the markets anticipation of rates slowing things down will pretty well cancel out the increase in short term rates. The financial press is saying that two rate increases are already pretty well priced in. I am not putting much into long term treasuries or corps because the intermediate pays almost as well and has much lower risk.Check out Gazarelli on CBS Market Watch. She i projecting a higher return on int term bonds than on SP500 for end of year 2000.Dave
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