UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next
Author: Lokicious Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35367  
Subject: Re: Bonds going up or down ? Date: 6/11/2004 8:46 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
"We've been sitting in Vanguard's Short-Term Bond Index, reinvesting dividends. With the idea of keeping 5 years of future income in cash, I've been planning to build a 5-year CD ladder at Vanguard, starting with 2 and 3 year CDs, and rolling into longer term CDs each year. I've been reluctant to tie money up in 4 and 5 year CDs in the current low interest rate environment, and that's the same reason I've avoided the Total Bond Market Fund. I thought to keep a year of cash at ING Direct, whose rate seems to be the same as a 1-year CD. Advise sought."

db,

Thanks. No good advice available. All of us who refuse to plunge more money into the stock market or market time have been stuck between a rock and a hard place. It swallowed hard when 5-year CDs hit 5% but continued to ladder with spare change down to 4% (I let new money sit in the money market when rates were below 4% for about 6 months). I think this strategy will work better than having let it all sit waiting for rates to go up, because they didn't and would still have to go up pretty quickly to make up for lost interest while waiting.

If you've got a big sum, I'd get 1,2,3, 4, 5 year CDs and start a ladder. With new money, I'd just keep buying 5-year CDs and roll over into Total Bond Fund or something when they come due, if rates look less risky.

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Apple

The Saddest Place on iPhone Day
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement