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I said: "I'm also confused about bond mutual fund performance in a rising interest rate environment. When the interest rates go back up, the bond prices will drop. But wont the yield then go up and it
be (basically) a wash?"

Foobar sed: "It is a "wash" if you can hold on to the fund long enough to have the increased yield make up for the lost value. If interest rates jump up suddenly, and you have to sell the next day, you will be forced to sell at a loss, and the extra yield does not help you any."

OK, I understand this. I'd plan to hold the bond fund for a long time. I do not have this as an asset class, my $$ (long term) is 100% in stocks. I have some cash as my e-fund. I'm thinking about longer term (b4 retirement) expenses. Say, once I get about $8-$10k in there, then I'd leave it.

"Also, there is "opportunity cost" lost as well. You could have instead held your money in a money market fund until rates rose, and bought the bond fund at a lower price (and have more units), rather than pay too much for the bond fund in the first place."

I'm kinda with ya here, but it starts to sound like market timing to me. Maybe on a macro scale, but timing nonetheless. Same could be said for MM and stocks regarding the recent bear market. I'm not flaming you here, but I'm trying to adopt a good plan w/o having to juggle money around too much.

IOW, I dont want moving $$ around as *part* of the plan.

Mark in Maryland
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