What bonds are you looking at buying? Can you let me know which ones your 9% is already invested in?
I have all of my fixed income side of my portfolio currently in deposit accounts earning about 1% net.
I really want to get a debate going about cash vs bond ETFs for surfeits of cash that you want to grow, but don't want to put into equities.
Many disagree, Jim. Bond ETFs are an integral component of the Bogle investing philosophy for example - a point also shared by Benjamin Graham. They play a key role in enabling rebalancing and serve as parachutes during market crashes. Why, specifically, are they not a good idea in your opinion? And are they preferable (in your view) to cash when one has a surfeit of cash but doesn't want to put them it into equities?
The reason I keep so much cash is because I'm an expat in a potentially volatile country and want to have money to hand in case I need it. It's kept in an off-shore account and is treated as my emergency fund.
You should diversify this equity holding by investing in emerging market equities, especially if you are in for the long haul.45% stocks (mostly US and European index ETFs) .
I don't think this is a valid reason for holding short term bonds. You could just leave the money in your cash fund and then use it to invest when there are market drops etc. Presumably it is easier to access your cash then to sell bonds, incur fees, taxes etc.I keep bonds for rebalancing purposes and diversification and have no problem with the low returns right now.
Unless you have a pressing need for additional income from the bonds you should consider investing in other asset classes within which you are not currently invested, e.g. emerging market equities, property (both domestic and foreign), commodities, and timber. Fixed income investing is really for those who need low(ish) volatility and an additional income stream.But my question and the purpose of this thread is to ask whether I'd be better taking half my cash and simply adding it to my bond ETFs.
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