No. of Recommendations: 0
I'd like to know if this seems like a good short term strategy for a declining market:

In my IRA, I've been liquidating equity based index funds and moving their proceeds into MMF. If I believe the market averages are going to go down rather than up over the next few months or year. Aren't bond funds the ideal place to be? Not junk but Aaa.

For example, Vanguard Intermediate-Term Treasury Fund Investor Shares (VFITX) It's fund price runs opposite of the S&P500. If the S&P500 is up as it has been, I'll be buying VFITX low. When the S&P500 goes down, VFITX will be high. If I sell VFITX as the market bottoms, there's a profit to be had on the bond fund.

Interest rates may get cut and that will affect my monthly payout. Overall though, with the increasing bond price and monthly payouts, I'll do better than most socks and MFFs.

I understand it is all market timing but if the market declines, should the bond fund do better? I'm an newbie when it comes to investing in bond funds and using this scenario will help me understand them better.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.