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I am 51 and I work for the US Govt. I currently have set up my 401k type retirement contributions as follows: 75% to C Fund (S&P500 index), 15% S Fund (Small cap),10% I Fund (Intl Index). Although I do not allocate any new contributions to the F Fund (Bond index) I do have 20% of my money there. I shifted funds into that fund in 1997 and did OK, also looked good in 1998, in 1999 I looked like an absolute idiot and in 2000 I looked clever again. I plan to shift the F funds into the C fund over the next few months as I expect inflation will return and bonds will look bad for a while.For the next 4 or 5 years I thought to do without bonds I do not expect to retire for another 5 or 6 years and I do not expect to draw any funds out for 3 or 4 years after that, (if I'm lucky, even longer).
Question, do I really need any bond funds at all, note-the only bond option I have is a Leaman Bros Bond Index so holding an actual bond is not an option. Bonds are not really counter cyclical although they do provide some deversification. Is there a time I should start shifting funds into (or adding new contributions into?) the F (bond)fund or maybe even the G (Govt securities) fund?
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