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Author: hackshark Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35342  
Subject: Re: Poll: bond fund for 403b rollover Date: 5/30/2002 9:31 AM
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Lokicious-

Thanks for information that actually addressed my question. I was not asking about whether I should be in bonds at all, or whether I should go funds vs. individual bonds (questions that get discussed endlessly around here). This was not a simple "which fund should I buy". I can select funds. And the fact that both choices are index funds should suggest that I understand that I am accepting the market average returns and am not seeking to beat them. I really wanted to know how the group favored allocating among duration.

My question is distilled down to whether I should cluster in the intermediate range, or "sweet spot" of the yield curve, rather than spread it out with shorter and longer term durations. The volatility is the main issue, but this won't bother me as I'll be reinvesting dividends and thus dollar cost averaging in this indirect way. This money will be growing for 30 years until I start retirement.

The current yields and 5 year historical returns favor the intermediate fund, and I suspect this is in part due to their higher corporate and lower GNMA allocation. I am happy with this bond allocation. My longer time horizon makes corporates suitable for me.

Finally, the advice to roll it into the same fund is worthwhile. i can always decide later to shift without tax implications. Thus, there is no urgency in making this decision. I appreciate everyone's comments.

-hack
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