No. of Recommendations: 2
I confess I have only read a few posts on this topic, but I didn't see anyone mention an inflation protected bond fund. Vanguard has a nice one that we hold, and it has done quite well, in my opinion. Of course, there is also the option of buying individual TIPS, which have received a lot of press on this board, such as what interest rate is a good buy. We do have one block of 1.6% 10-yr TIPS, which, while certainly not a barn burner, is well into the black. A block of 2% 10-yr TIPS has done much better. Seems to me the long term threat is inflation, even official inflation.

I make no claims to being any kind of expert on bonds so I would like to hear opinions of those more experienced.

I have posted before that I felt need to get at least 5% on bonds so I did buy some long-term corporate bonds going out to 2029 (Note: as we are in our mid 70s, these will probably involve decisions of our heirs.) back when interest rates went into the toilet. Of these, our only one in the black, and that slightly, is a UPS AAA grade bond maturing in 2017 (5.25% bought in 2002 and now 10 yrs to maturity), and it has spent a lot of time in the red. A Bank of America (I believe rated A+) 5.45% 2028 bond (bought in 2003 and now 25 yrs to maturity) has always been in the red, even though it is paying a half percent more than a 30-yr Treasury.

I do like CDs and we have lots of those, also, in ladders with PenFed (out to 7 yrs) and E-Trade, mainly. Earlier this year bought a brokered CD at 6% with Schwab with a maturity of 2027 (if not called). We also have one sizable Treasury CD with BB&T where the interest can fluctuate, but we can make one withdrawal a month should we need some money.

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