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Subject:  Re: Up, down, sideways Date:  12/28/2010  10:35 AM
Author:  ResNullius Number:  67984 of 100398

Right or wrong, we're trying to protect our porfolio by having a high fixed asset allocation, currently around 68%. Due to historically low rates and the likelihood of higher rates, our bond fund allocation is divided between Vanguard short-term investment grade and Vanguard intermediate term investment grade. The balance (around 32%) is in Vanguard equity funds. As I see it, the greedy and dishonest on Wall Street and in DC can easily destroy the equity market again, just as they did a few years ago, only next time it might take 10 to 20 years to recover. They would have a harder time ruining the investment grade bond market, simply because large cap companies generally are well managed and operated, totally unlike the government. If rates start to skyrocket, I'll move the bond fund money into Vanguard's MM until things seem to top out, then I'll move the money back into bond funds. I'm not into market timing, so I don't claim any particular genuis in deciding if and when to move bond fund money into the MM. Good luck to us all, because the future likely holds nothing but unpleasant surprises for us all.
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