No. of Recommendations: 0
I personally can't bring myself to invest in bond funds at this time. When rates go up in a couple of years, most bond funds will be hard hit and drop in value. The only caveat to this is I've been going on this for the past 3 years, except the time frame was only a year out instead of the 2-3 years now. In it's place, I've gone to dividend index funds, providing 2-4%. The theory is they are made up of big companies that won't lose much value in a market downturn. You will have to hold a higher level of cash to meet your short term needs which reduces your overall return.
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