VGIT
Vanguard Intermediate-Term Treasury Index Fund ETF Shares
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Help in allocating funds into these ETFs from Vanguard
Worried about your bank? Here are (NASDAQ:VGIT)
If a bond fund's average maturity date should match my investment horizon, should I be swapping bond ETFs every 10 years as my retirement age approaches?
Thoughts on potential recovery and rejection of SPY
Has any research been done on if different types of bonds increase the Safe Withdrawal Rate (SWR)?
Any books suggestions on how bond ETF is constructed and managed?
YoLoIng with A leverage ETFs!!!!!!!! to buy RENTAL HOUSES!!!$$$$ 38% TQQQ 38% VGLT 12% VGIT 6% IAU 6% VPU. Rebalanc3 every 3 months and keep adding money whenever I can , currently down but will go up when Market goes back up.
Why does the performance of Long Term Treasury Bonds vary more than Short Term Treasury Bonds?
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Cheap, Highly Diversified Funds. Do not sell. VTI + VXUS + VGIT Focus on making more money to shovel into the bucket rather than rearranging what's already in the bucket. That's it. That's the secret.
**Spent a decade on the buy-side here.** The "Foreigners are Dumping Treasuries" headline is the oldest scare story in the bond market. We see it every cycle. Before you rotate into International Bonds (BNDX), you need to understand the mechanics of *why* you hold bonds and what BNDX actually does. **1. The "Dumping" Fallacy** When China or Japan "dumps" Treasuries, they aren't doing it because they think the US is going broke. They are doing it to **defend their own currency.** * *The Mechanic:* They sell Treasuries (USD) to buy their own currency (Yen/Yuan) to prop it up. * *The Result:* Yields might spike temporarily, but the US Bond market is the deepest, most liquid pool of collateral on Earth. When yields spike, US domestic institutions (Pensions, Insurance co's) step in to lock in the higher rates. It self-corrects. **2. The BNDX Trap (The "Hedge" Cost)** You asked about BNDX. * **The Problem:** Vanguard's BNDX is **Currency Hedged** back to the USD. * *Why this matters:* You are buying European or Japanese bonds (which often yield *less* than US Treasuries) and then paying a fee to hedge the currency exposure away. * *The Math:* You end up with a portfolio that behaves very similarly to US bonds but often with lower yield. You aren't getting the "Dollar Crash" protection you think you are. **3. The Real Risk: Duration, not Geography** If you are worried about US fiscal dominance (debt issues), the risk isn't that the government defaults. The risk is that they **inflate** the debt away. * *The Liability:* Long-duration bonds (20+ years) get crushed by inflation. * *The Fix:* You don't need to go International; you just need to shorten your duration. * **VGIT** (Intermediate) is the sweet spot (5-7 years). * **TIPS** (which you already own) are the *direct* hedge against the fiscal irresponsibility you are worried about. **My Take:** Don't overcomplicate the fixed income side. Foreign bonds (especially hedged ones) often just add correlation without adding alpha. Stick to your US Treasury/Muni mix. If you are truly paranoid about the US debt spiral, the answer is **Gold** or **Short-Term Bills (SGOV)**, not German Bunds.
VOO and VTI overlap with VTI holding 3000+ US companies and VOO holding only 500+ companies. If you want foreign exposure outside US, then VXUS is a good one. A dividend-focused one would be like SCHD. VGIT, BND, SGOV are all like investing in fixed income/bonds/HYSA so I would put a few percentage there for a safety net. Overall, if your goals are aggressive, I’d put like 50% in either just VOO or VTI. Split the remaining 50% among foreign exposure like VXUS, dividend exposure like SCHD, and fixed-income exposure like VGIT.
Are you going to receive one time $300k or it will be given to you every year? Same question about $100k from grandparents trust? If this is one time thing, then you can invest in stocks and bonds portfolio, preferably 50:50. For stocks you can just use VOO and VT. For bonds you can just use something like VGSH and VGIT.
in addition to BaconJacobs answer, HYSA aren’t always giving the best / matching rate. Sometimes I rotate between SGOV and VGIT depending on what rates are doing, but the difference is minimal for the amount I have in bonds.
Are you me? I do almost the same thing. Most of my money in ETFs (VTI, VXUS, VTV, VIG, VGIT) but I swing trade on the side with gold lol but I use GLDM.
Exactly - I built a TIPS ladder that will cover essential expenses between ages 57 and 67 (earliest I’d plan to take social security). That’s about half my bond allocation, the rest in BND and VGIT. From everything I’ve been reading, inflation can devour savings in retirement far more than a market downturn since it “forces” high withdrawal to maintain buying power - TIPS should take off some of the pressure in the case markets are not giving good returns and inflation is high.
Diversify out of individual meme stocks you read about on reddit and into low cost broad market index funds (i.e. VT). And keep any money for a house in something like U.S. Treasuries (VGIT/VGSH depending on when you plan on buying) and/or TIPS if unexpectedly high inflation would put the target out of reach (VTIP).
After making too much money on Penny stocks, I decided to place 40% of it on VGIT. Why, because they pay dividends and it's safer there if we have a downturn. I hate giving up gains. For now, I'll keep buying AMPX, OPEN, DFLI, DVLT and BURU on red days and keep taking some profit from time to time.
I’m not really sure. I have a lot of SGOV that I think I need to move into something longer term. I have a pretty good chunk of BND and a smaller chunk of VGIT.
Trying to hedge against all those market curveballs is smart, but sometimes juggling too many bond funds can just make things messier and hardr to track, not safer. FXNAX does have corporate and MBS expsure that can act kinda like stocks when things get shaky, but switching into VGIT and VGLT might leave you expsed to interest rate risk if rates suddenly jump, which could hurt your portfolio just as bad. Plus, TIPS help with inflation but don’t protct against all scenarios. have you thought about how much risk you’re actually willing to stomch if the market tanks, or are you mostly trying to avoid losses at all costs?
I’ve wrestled with the same question, wanting bonds that actually balance out stocks instead of just moving alongside them. Shifting part of your allocation into Treasuries (like VGIT or VGLT) can give you that clearer hedge, while keeping a small slice in TIPS for inflation makes sense. The mix doesn’t have to be perfect; it just needs to give you enough stability so you’ll stay invested when the market gets choppy.
For a 15-year horizon, I’d lean toward an intermediate-term treasury ETF (like VGIT) — it gives you better yield than short-term funds but less rate risk than long bonds. GOVT & VTG do have more long-duration exposure, so they’ll swing more if rates move. Floating-rate (TFLO, USFR) is great in rising-rate environments, but if rates drop, you’ll wish you locked in longer yields. A simple ladder or a mix of short + intermediate could give you flexibility without overcomplicating it.
When you park money in Treasuries you’re balancing two main risks: interest‑rate risk and reinvestment risk. Short‑maturity or floating‑rate ETFs like TFLO or SGOV have almost no duration, so they’re very stable and will track the Fed funds rate. That makes them useful as cash equivalents or a place to store "dry powder" because price volatility is minimal. The trade‑off is that if rates fall, the yield on those funds will reset lower almost immediately. At the other end are broad Treasury bond ETFs that hold intermediate or long maturities. They will fluctuate more as yields move, but they lock in today’s yields for longer and historically have provided higher total returns over multi‑year periods. A fund like GOVT holds a mix of maturities; VGIT is intermediate‑term; VGIT or a ladder of maturities can be a good match if you have a 10‑ to 15‑year horizon and want a smoother ride than long bonds. Very long‑duration funds are more sensitive to rates and may not be ideal if you plan to shift the money back into equities on a downturn. Floating‑rate Treasury funds (USFR, TFLO) own short‑term securities whose coupons reset with the 13‑week bill rate. They protect against rising rates but don’t give you the term premium you get from holding longer bonds. TIPS (Treasury inflation‑protected securities) are another option if you’re concerned about inflation, though they come with their own quirks. Rather than trying to predict interest rates, many investors choose a core bond fund that matches their time horizon and complements their equity allocation. In a Roth IRA, you also don’t face taxes on bond interest, so holding a taxable bond fund there can make sense. Ultimately the right choice depends on whether you prioritise stability (short duration), income (intermediate duration), or inflation protection. Talking through your broader asset allocation with a financial planner can help you decide which combination of these instruments fits your goals.
I personally keep 4+ months in cash (actually short term bonds = SGOV) and many more in bonds (VGIT/BND).
VGLT has a very long average maturity, you should be considering VGIT. The downside is treasuries have lower rates because they're "risk free" (but you know, maybe not so much now...), but that can be worth it for high tax states. Look at total return tools for a better understanding of the difference in returns.
It’s definitely done well long term for decades and easy to follow. You could use something like VBIL or VGIT or even the new VTG for treasuries.
Perhaps take 400k of that and go VT / VGIT, then keep trading with the rest… though perhaps consider Mag 7 and high compounding single stocks over the long term instead of penny stocks.
If you’re going to pay less in taxes this year and have a Traditional IRA it might make sense to convert a portion of it to Roth IRA. If you have no need for that cash and can invest long term then go with a broad selection of ETFs since that is non-qualified money the ETFs will give you more tax efficient investing over mutual funds since they are required to distribute capital gains to you at the end of the year. As for your asset mix that’s based on time horizon and risk tolerance. For example if you’re in your 20s and have a high risk tolerance you could go 80-100% Equity with 0% or 20% fixed income. If you’re in your 50s with high risk tolerance you might better benefit from a 60% equity 40% fixed income blend. As for the ETFs VT/VTI/VOO/SCHD/QQQM are always crowd favorites for the equity side For your fixed income portion make sure you spread well across the yield curve since interest rate action is bound to happen eventually. Spreading through the curve won’t make you the most money but it will give you the least amount of volatility when rates do eventually change. What I mean by spreading take these three treasury ETFs for example VGSH, VGIT, VGLT and even blend of those three spreads you nicely against short, mid and long term treasuries. Hope this helps.
I’m invested in 4 asset classes now lol XLV, IAUM, CTA, and VGIT Healthcare sector equities, gold, managed futures, and medium term US treasuries. Basically a bulletproof portfolio. Stock market implodes? Gold and managed futures skyrocket. Gold implodes? Usually means equities are doing well. VGIT just there for the moral support. Everything implodes? Shit I guess my $1000 in ammo will have to last me lol
You want treasures, not corporate bonds, which tend to default at the same time as stocks are in trouble. Intermediate term treasuries are a good bet. VGIT is a good ETF. Or money market.
If you have only $100K right now need income and cannot work, buy intermediate term bonds. I recommend VCIT and VGIT. They will pay a combined almost 5% and give you close to $400/month income. They will hae some ups and downs in price but will continue to pay the dividend unless there is a total calamity. When you get your share of the house, you can decide if you are positioned to take some risk in equities. Right now, I think you are not.
NGL this is perhaps the worst portfolio I’ve ever seen. Sell everything and stop loss. Go 70% VTI or VOO, 20% VXUS and 10% in either BND, VGIT or even a Sofi High Yield Savings account at 4%. All of these are going to zero except AMD and AMD has a shit PE atm.
VGSH VGIT VGLT (short int long bonds) SPIB SPHY (corporate int and high yield bonds) VMBS (mortgage backed securities) My bond allocation is divided evenly between all six. They all pay every month. Some perform better in certain conditions than others. I like the outlook of all of them and plan to hold them all indefinitely. In my 401k I have just FXNAX (Fidelity MF AGG / BND equivalent) because no other real bond choices.
My bond strategy is a second tier emergency fun in I series Bonds. Then I have multiple bond Etfs: BND, VGIT, VGSH, VUSB. I switch those four around and have a duration I am comfortable with. Having multiple ETF's makes it easier to Tax loss harvest. My strategy is not the recommended strategy by many people, but it works for me.
Fing bonds! I have never understood the worth of bonds. However, needing to take some risk off the table I diversified into some bonds. Turn out they acting just as they did in 2021. My VGIT dropped in lock step with Voo today. I knew this was a mistake. I'm dumping them all into MM funds
7-10 years is fine so long as they mitigate risk. Like 30% VOO, 10% VXUS, and 20% VBR, with the remaining split into bonds/treasuries, 30% VGIT and 10% VGSH. Rebalance every year and you should be able to see 4% to 5% growth, enough to beat inflation, and nothing hugely overlapping or correlated, and fairly diverse.
Didn’t know VGIT was a meme stock
1. IF you invest in QQQ, which I wouldn’t recommend, go with QQQM. It’s the same fund with a lower expense ratio. Also more volatility/risk does not equal higher potential growth aka if you take uncompensated risks like investing in QQQ(M) 2. You could always keep it simple and go with a Target Date Fund, but if you want to manage his portfolio you’re on the right track with a 60/40 portfolio. For the stock proportion VT or VTI/VXUS is a good option. BND is also ok for bonds but you could do slightly better if you focus on treasury bonds since they have a better negative correlation with stocks. VGLT – 15%VGIT – 5% SCHP – 20% could be a good option for bond allocations
BND is fine. VGIT will give you stronger negative correlation with the stock market, since corporate bonds can take a hit along-side of stock value. The extent of the correlation is variable based on the reason for the stock market hit. BND is fine. VGIT is safer, with lower yields.
If you prefer an HYSA, I’d shop around on bank rate.com and nerdwallet.com to find who has the best rates. Personally I keep most of my emergency fund in a taxable brokerage account for flexibility. Currently it’s in 25% VGIT and 75% Schwab treasury money market fund (SNVXX). I keep 1 months worth of expenses in my savings account and the rest there.
I couldn't figure out what I wanted my foreign balance to be, so I got rid of all my VTI and VXUS and went straight VTWAX. It gave me so much peace of mind to stop thinking about it. As for bonds, VGIT or BND. VGIT if you want less risk, BND if you want corporate bond diversity and higher returns in your roth.
I personally like to use treasury bonds etf/funds due to least correlation to stocks, there a bunch of different options telling on the duration you want scho/vgsh for short term 1-3 years roughly, med term VGIT is a good option, for longer durations VGLT, and TLT/EDV for longest durations. There is also GOVT, thats kind of like Total bond market for just treasuries. I am not biggest fan of high yield because correlations is bordering close to stocks etfs imo.
A balanced stock/bond portfolio leveraged up should outperform an all-stock portfolio over the long term. Too many people are 100% in VTI when they would be better off using cheap leverage with VTI+VGIT (or equivalent), especially young people.
Rebalancing to add more value ETFs (VYM, SCHD) and bond funds (BND, VGIT, VGLT). Reducing, but not eliminating my monthly allocation of VTI. We'll see what happens. Good luck to everyone.
It's useless to try to time interest rate changes and the bond market. Pick a bond fund based on your own timeline, not the current interest rates. Long term bond ETFs have higher expected returns but are more risky. The longer the duration of the fund, the more risky it is. The rule of thumb to balance this is to pick a bond fund with a duration of less than your investment horizon. If you want to withdraw in 5-10 years, pick a bond fund with a duration of 5 years to be safe and maybe a little higher if you want to be more aggressive. Looks like BLV has a duration of 14 years which may be too risky. VGIT or GOVT may be good since their durations are 5 and 6 years respectively. [https://www.ishares.com/us/strategies/bond-etfs/build-better-bond-ladders](https://www.ishares.com/us/strategies/bond-etfs/build-better-bond-ladders) Look at these options as they target specific years so they may be better options for you.
Thank you for the detailed explanation. I meant to refer to VGIT but it’s good to know you also like VCIT.
VGIT - vanguard intermediate bond fund. 6-ish year average maturity.
Short-term Treasuries (T-bills) are effectively cash and the approach you are describing -- eschewing intermediate and long term bonds in favor of T-bills due to the current inverted yield curve -- is called 'the cash trap.' The problem you face when you put yourself in the cash trap is that once rates are cut, the rates on your T-bills will decline to the new prevailing rate as they mature and you roll them over, and the prices on the higher-yielding intermediate and long-term issues will rise, forcing you either to pay a premium over par to acquire a longer-term bond position or to accept the lower rates of new issues. The best solution to the cash trap is to avoid it entirely by diversifying your fixed income portfolio across the yield/duration curve, so that when rates inevitably decline you gain the benefit of the price appreciation on the intermediate and long term bond holdings and their higher yields relative to new issues. In other words, don't just put your fixed income portfolio entirely in SGOV or VGSH. Either put it in GOVT or BND or VGIT or at least split it between the shorter-duration and intermediate-duration bond funds.
>Alright, so I don’t really understand why anyone would choose a CD or Treasury Bond over the S&P or a similar ETF. Reduction in portfolio volatility and reduction in sequence-of-returns risk are two use cases for fixed income that immediately come to mind. >Historically, the market has returned nearly 10% on average (more in recent years), which is a lot higher than the aforementioned options. Reliance on average return over a long period of time when you are in the withdrawal (retirement) phase is the very definition of sequence-of-returns risk. Bill Bengen, the authors of the Trinity Study, and countless others have researched and shown that during the withdrawal phase it is the sequence of returns, not their average, that determines portfolio survival. >Your money is also not locked up. Your money isn't locked up in fixed income either, at least when an investor adheres to best practices for asset-liability matching. Using money market funds and short-term Treasuries (e.g. VGSH or SGOV) for short-term expected income needs and intermediate-term bonds (e.g. BND or VGIT) for longer-term fixed income to reduce portfolio volatility is a proven and reasonable strategy. >Even if a recession lasts years, the market still bounces back higher than before. I believe people have the illusion of safety for a lower return in this case. Again, this seems to show a misunderstanding or underappreciation of sequence-of-returns risk. If you are retired and 100% equities during a bear market, you are selling your equities holdings at depressed prices, which leaves fewer shares remaining in your portfolio when the market recovers. Your portfolio therefore experiences less upside than the market as a whole, because you've sold off shares during the downturn. As Bengen and others have shown, this increases the likelihood that your portfolio will not meet your income needs for the duration of your retirement. >The only way any of these choices could fail is if the US government went under (except for the CD, which is even more fragile and based on a single bank), which would cause the same outcome either way. Sequence-of-returns risk does not require the collapse of the government. It requires only that a retiree consume too much of his or her equities allocation for the portfolio to recover, which is apt to occur most often during market downturns in the first decade of retirement. The most stark example of this was the low 30-year portfolio survival rate in Bengen's paper for those who retired in 1967-68 and suffered through the stagflation of the 1970s. >Also for the recession argument, since nobody can actually call a recession, would it not be the same as trying to time the market? By remaining 100% equities as one enters retirement, one is arguably attempting to time the market by wagering that they will not experience a bear market for the next 5-10 years and that the portfolio will continue to grow over that period until income withdrawals do not threaten portfolio survival (i.e. the portfolio value is so large that your withdrawal rate won't exhaust it and you'll die with a large estate). If they're wrong, however, the resulting harm to the portfolio can be catastrophic. This is why many investors use fixed income, in different ways, to address this risk.
I might just leave my money in the default money market fund. The market has been choppy lately and I want to reduce my equity exposure. VGIT looks promising. Yields might go higher in September.
I would start adding a intermediate bond fund like VGIT or BIV later down the road. Long duration bonds have weak coupon risk premium and make little sense when you might not live until they reach maturity.
I agree. My default bond suggestion is an intermediate-term Treasury fund such as VGIT. Those with longer time horizons and enough risk tolerance should use a long-term or even extended duration Treasury fund such as VGLT or EDV.
>I'm just doomsaying and speculating by looking at some historical huge losses like black monday or the great depression If you were long throughout 1987 and held through Black Monday, you ended the year down only 2.4%. Those who held recovered fully the following year with a healthy 7.3% return. The pain was borne by the panic sellers. It's funny, my father was a broker and ran the options desk at EF Hutton back in 1987; I was a child then and will never forget the look on his face when he came home that day: He looked exhausted and defeated. Yet the world did not end. The Great Depression was a very different situation: 1929 might have been another 1987, but the great leaders of the time attempted radical and often contradictory moves to "fix" things. This only created an environment of uncertainty that exacerbated and prolonged the situation. One can think of that approach as the opposite of Bogleheaded, since it was exactly contrary to Jack's advice that in the midst of market upheaval, "don't just do something, stand there." Amity Shlaes' book, *The Forgotten Man,* is a great book on that topic if you enjoy reading about such history. The 1970s stagflation and the 2000s lost decade are the closest we've come to that and, thankfully, they weren't close. Nothing since has come close to 1929-1945 and we all should hope that remains true. >I could retire early, but I would need to keep money invested to continue to live off it for years to come. What do people do when they reach this point? Would switching x% to bonds really protect my funds? You didn't say how much you already have in bonds and you seem to be doubtful about them. Let's reframe the question this way: If the prospect of volatility in your current asset allocation gives you anxiety, then is there a solution, preferable over bonds, to reduce that volatility? * Equities? Not helpful to reduce volatility. * Real estate? REITs have the volatility of equities so they don't help. Directly owned real estate holds its value but is very illiquid and requires either "sweat equity" or the cost of a management company to maintain. * Cash? Cash helps with volatility, but the yield on cash rarely outpaces inflation except over very short periods. * Commodities, currencies, crypto, and derivatives? They offer zero internal rate of return: They're just price speculation that more resembles a weekend in Las Vegas than a genuine investment. That leaves bonds. Adding nominal bonds with BND or VGIT and inflation-indexed bonds with VTIP is a reasonable approach. If you're 100% equities right now, consider 80% equities and 10% BND 10% VTIP as food for thought. Adjust those allocations until you can sleep well at night. That all said, Morgan Housel, author of the wonderful book, *The Psychology of Money*, notably admits that he maintains a 20% cash position. He acknowledges that large a cash position doesn't make mathematical sense, but it suits him because it gives him comfort and helps him avoid making behavioral errors with the rest of his portfolio. So, for him, that allocation makes a lot of sense. Perhaps something similar merits your consideration. Housel's *The Psychology of Money* and Rick Ferri's *All About Asset Allocation* are two resources I'd recommend to you.
I have VOO and VGT as my primary investments, I'm slowly adding bonds by DCAing into VGIT as I approach retirement.
Oh, sorry! These tickers are so alike it's damn so confusing. Ok, hold on, let me look at VGIT! Wow, their prices even look identical. So it's still $59 entry price. TTM dividend yield is 3.1% so you didn't collect as much. But your TR is around 3.1%. But your yields are higher now at around 4.4%. And VGIT will pop when the Fed starts cutting. It will not pop as much as VGLT, however, as the shorter duration makes it less sensitive the lower interest rate as VGLT. Nonetheless, it could be up to \~$65-$67 if the FFR approaches 2.5-3.0%. Hope for a hard landing.
From here on out yields should go down and you'll be doing better. Problem was you bought a fund that maintains its "duration" (bond terminology) at about 5 years and you held it while yields increased. Rule of thumb: You can estimate the future price of a bond fund by multiplying its duration by the expected change in yield. Since last year yields for the bonds that VGIT mostly holds went up roughly 1.00%. So that means you've had a loss in the price of VGIT of about 1.00% x 5 year duration = -5.00%. The dividend probably made up most of that loss, but still, the overall position is probably a bit negative. With hindsight, the best place to be in bonds this past year was in maturities of 3 years or less. Their yields since last year are mostly unchanged. You made a good choice with VGIT should stocks tank. Treasurys are the only bond type that we can trust will rally when stocks fall bigtime.
Depends how passive/active you want to be. For my clients, I'm buying a lot of $HYS for their bond fund. $VGIT doesn't make a ton of sense with the current yield curve and interest-rate environment. At least you picked something better than $BND, not that $BND is awful for a more passive approach.
I've been DCAing into it every month, also I'm buying VGIT. Thanks for your insight.
60% VTI, 40% VGIT. Keep a slush fund in SGOV or BIL. Or put it in a vanguard target date 2035 fund (assuming you're 55ish and would turn 65 in 2035).
Depends on your macro view. If rates go up long bonds go down in nav. $ BIL for now, until rates start dropping. Then VGIT and/or TLT.
Put every dime into an ETF. QQQ or VGIT are aggressive, tech based ones that diversify you across the large cap ones... Microsoft, Apple, Nvidia. QQQ averages for example 18% over the last decade. If you want broad market diversification go with SPY or VOO. Those have averaged about 13% over the past decade. Of course the more tech focused ones will have more risk but if you're not planning to touch them for 20+ years then just make deposits when you can and walk away from it. Whatever you choose, congratulations on the life changing experience and best of luck in the future.
Stocks. I'm a few years younger than you. I'd confidently put money in either VGIT for QQQ and let it ride the next 10 to 20 years knowing those ETFs will out perform , particularly over the immediate 5 to 10 years, anything the housing market would return. For me real estate is just not that appealing with interest rates where they are. Commercial real estate on the other hand, that might be an opportunity but highly dependent on location. Either way, if you're real determined to get another property I'd say wait it out past this year and see where things sit toward spring 2025. Til then invest in other areas and then look at it again. My two cents for what that's worth
To whatever extent you *do* hold bonds, do you hold them in a general Total Bond Market fund like BND or FXNAX or do you use intermediate-term Treasury funds like VGIT or FUAMX? Or do you do something else entirely (an active bond fund, buying individual bonds, etc)?
You can find treasury bonds right now above 5%, you can buy SGOV for really short term, or something like VGLT or VGIT for a bit longer. Even better would be a money market fund, if you're doing your HSA through fidelity it'll automatically put money into those.
> Why not simplify your funds into say VTI and VXUS? I could, but I don't want the tax hits. Yeah, this was definitely my question. It's kind of a mess. If you ever find yourself in a year where you're unemployed for a short period of time, that would be a great time to simplify it all. > BND + BNDX This is fine, but in my opinion US Treasuries are superior to a total bond market index because corporate bonds are too closely correlated with the stock market. Also if you've got a long term horizon, long term treasuries are the best choice. So if it were me, I would replace BND and BNDX with VGLT or EDV. As you get closer to retirement you can start adding in VGIT for more stability.
First, do you mean SW***L***SX, not SWGSX? I can't really find much on SWGSX, but what I can find suggests its a GNMA fund, not a growth fund? Anyways, besides that, SPY/VTI/SCHV all almost entirely overlap (SPY is large-cap US companies; SCHV is a value-factor subset of large-cap US companies; and VTI is all sizes of US companies, including large-caps). This doesn't add diversity atop just owning VTI, instead it just creates an odd *concentration* into certain things (large caps in general, particularly value-factor large caps). I'd just replace *all* of those holdings with VTI, myself. Finally, "15% in money markets"? I'd buy an intermediate-term government bond fund like VGIT, SCHR, or GOVT instead. The usual, Bogleheads approach is to hold bonds (often gov't bonds) instead of straight cash.
A standard brokerage account is a fine vehicle for retirement investing. The obvious disadvantage is that you’ll incur tax liability on the distributions made by your investments in the tax year those distributions occur. That’s just the cost of doing business. Depending on your retirement income level, however, you might pay 0% or 15% on capital gains withdrawn from your brokerage account (and remember your invested capital is withdrawn tax free because they’re after-tax dollars). You might pay 22% or higher on the same withdrawals from a traditional 401(k) or IRA because they’re ordinary income. Plus, unlike tax-deferred accounts, brokerage accounts have no RMDs, so you get complete control over when you incur tax liability. Finally, when you pass on your brokerage account, your tax liability is wiped clean and your next of kin inherit the account with a stepped-up cost basis as of the date of your demise. That is a huge advantage compared to a tax-deferred account, which remains taxed at ordinary rates and your heirs are required to withdraw down to a zero balance within 10 years of your demise. The key advantage for tax-deferred accounts is for high earners to lower their current tax liability in the years they’re stuck in the higher brackets due to their earning power. Roth + brokerage will always be a powerful combination, at least so long as capital gains and dividends remain taxed at rates favorable to ordinary income. So do not fear the taxes associated with the standard brokerage account. The key is to invest in tax-efficient index funds. VT is perfectly fine. Bonds can be a bit tricky in a taxable account: Instead of a Total Bond Market ETF like BND, you may want to use a U.S. Treasury ETF like VGIT (Treasuries are state and local tax-exempt) and/or a good municipal bond ETF like VTEI (municipal bonds generally are federal tax-exempt). You’re on the right path. Go forth and build wealth.
What you want to look at is the yield to maturity. For VGIT it is currently 4.3%. Sometimes bonds mark to market at a premium to face value. Sometimes they mark to market at a discount. The yield to maturity will tell you what rate of return you would get if you simply held all of the bonds in the basket to maturity and received face value when they each mature.
Emergency fund = 20% VTI and the rest in intermediate term treasuries like VGIT. Sufficiently conservative, but can still grow. Hopefully, you'll never have to tap into it.
Considering this portfolio but want advice on the allocation, for context I'm 18 and going into collage next year. Open to any advice: 60% VTI 20% VXUS 20% VGIT
Do you think 70% (VOO) 10% (Private shares) 10% (Government bonds) and 10% (Crpyto) would be a decent split? What exactly are government bonds? The only one I could find was VGIT, which isn't doing too hot right now. Is crypto really a solid investment? I mean I've never really used it, I know it's supposedly catching on and that it's essentially untraceable money on a public network so no chance of a bank not giving you your money but what exactly makes it enticing? I'll definitely throw some in there but am not really sold on the entire thing. Sorry if I said anything stupid, still learning.
Quit listening to people. If the masses were right, the market would already reflect that and they'd no longer be right. If you want to beat the market, you have to play the contrarian. If you aren't comfortable playing the contrarian, buy-and-hold total market indexes like SPY, VTI, GOVT, VGIT, NTSX, etc.
If you hold until maturity, there is no real risk with Treasuries of any duration, just potentially opportunity cost. But bond ETFs don't let you hold until maturity since they are always laddering. The capital gain potential of a bond ETF is based on the potential for bonds of that particular duration to have a change in yields. My argument is that intermediate are already fairly strongly inverted, so they have less capital gain potential. That doesn't make them a bad investment, I just think I would personally prefer longer duration. As for BND, the high level of MBS is unattractive to me. Since MBS are agency backed, their higher interest rate is actually nice if you were going to hold until maturity the way big banks do. But they have negative convexity, which basically means they will not appreciate as much with a drop in yields as they would fall in the case of a rise in yields. So, if intermediate duration is the goal, I would personally prefer to combine something like GOVT, VGIT, or IEF for Treasuries with VCIT for corporates, and leave MBS out of it. I am presently holding Treasuries only, and am watching closely for a widening of credit spreads at which time I'll rotate into corporates. Credit spreads are so narrow right now compared to historical norms that I don't think corporates are worth the risk. If you want higher yield, I think there are some preferreds that might give better reward for the risk (LANDP, BEPH, ABR-D, as examples).
Here's why I don't like BND. Intermediate duration bonds have more inversion presently, corporate bonds are relatively overpriced (credit spreads are crazy narrow right now), and MBS have negative convexity so I'd never hold those in an ETF. If you want shorter duration, go IEF or VGIT, though I still don't like the massive inversion of intermediate right now.
I’ve become more defensive and risk adverse as I’ve gotten richer…$700k total now and 25% if my money is parked in VGIT.
SGOV is one step away form a Money market fund. Good income in the moment, but not guarantee for more than a few weeks. I am in VGSH, VCSH, VCIT, VGIT, VWESX, and VUSTX - I am going for a mix of treasury and investment grade corporate bonds - some short term, some intermediate term, and some long term. I am about 50/50 Treasury/corporate and 25%, 60%, 15% short, intermediate, and long term
Look at VGIT for a middle of the road approach.
so first off when people talk about buying bonds rarely do they mean actual bonds usually what they mean are bond funds. so like the example i use alot is VGIT, thats Vanguard (V) Government (G) Intermediate (I) Treasuries (T). and while the two in essence function they same in reality they dont. one of the biggest differences is going to be that if you buy a 10 year actual bond for say 10,000 dollars in 10 years you will get your 10,000 dollars back. this is not true of a bond fund. bond funds offer their own advantages however, for instance liquidity. i can unload a bunch of VGIT at any time while still collecting a nice return. all that aside however yes, you are correct that if i buy a bond today for 10k with a 5% yield for 10 years i get 5% for 10 years. but bonds value in terms of the principal, the 10k part, is inverse to their yield. so if tomorrow the interest rate goes to 6% on a 10k bond then my 10k bond is now worth less, because why would someone buy my 5% yield bond for 10k when they could buy a 6% yield bond for 10k so if i need to unload the bond for whatever reason its principal value, the worth of the bond, can vary substantially dependant on the current yield. if we go to 8% fed rate my 5% bond is worth a lot less if i have to liquidate it. so that is how bonds have fallen 18-20% over the past 2 years. because if you have to sell a bond to another buyer the value continues to inverse to the rising yields over the past 2 years. hope this helps <3
Put 50% in VTI, 25% in VXUS and 25% VGIT. Rebalance annually and enjoy the ride.
You have to hedge inflation and for what the Fed/government will do in response. If it's inflation, low growth, and stimulus/easing, you'll want multifamily real estate and possibly farmland, gold, and/or some other nontraditional tangible thing; possibly also short or intermediate term Treasuries, and possibly strong balance sheet moat equities with some cc for downside protection. If it's inflation with hawkishness and higher taxes to control the deficit, probably best would be Tbills and adjustable rate products not at risk of default (some preferreds, for instance). So an example blend might be: SGOV, VGIT; FLOT, ABR-F, LANDO VOO, VIG, SCHG, DIVO, JEPI
Does it make sense to load up on intermediate term bond ETFs like VGIT & BND and selling when rates drop again? I'm 32 and 12% of my retirement is in BND. I anticipated I'd be 100% in equities until I'm 45 or older but there seems to be great opportunities with bonds now and I'd love to get some insight about this. My equity portion is essentially VOO, AVUV, VEA, AVDV, VWO & AVES with a 24% factor tilt and 31% ex-US. As a newer investor, I'm still trying to figure out what my investing "style" is. I came in through the passive indexing door but am finding myself to be more of a tinkerer. I can't bring myself to just buy the same thing each month if one fund/company is perhaps trading higher or being overvalued while others are on sale. While these bond fund prices are at an all-time low, does it make sense to allocate, say 30% of my retirement to these intermediate bond funds and try to sell in 1-7 years when rates drop for a capital gain (is it called that with bonds too?)? I guess the worst-case scenario is that I'd have a 30% bond portfolio if interest rates somehow don't drop in that timeframe. My net income is about 38K as an apprentice in the trades, but I anticipate netting over 80K within 4 years. I've managed to cut my expenses severely to the point where I'm either saving or investing 45% of my current net income. I'd appreciate any feedback and apologize if I'm making any beginner assumptions. I'm here to educate myself and share that with others. Thank you!
VOO vs VGIT vs BSV vs VCSH vs VCIT? I want to dump $280 a month into it and buy a rental property within the next 4 years.
https://i.imgur.com/SqI51zS.png Should I rebalance? Sell BND, BNDX, VGIT for more VOO or VTI?
I'm learning about factor exposure for my longer-term investing accounts. Currently, I'm on the brink of switching up my IRA to something like the "Ginger Ale" portfolio (I'm 32). I don't currently have access to a 401K but plan on working for a different company in the near future. I know there are fewer fund choices in most 401K's, so what are the chances of me being able to build a 401K with something like: 55% VT 35% AVGV (Global equity value etf) 10% VGIT (or other relevant fixed income treasury hedge) All insights are welcome and appreciated!
Nah. TLT is still at a significant discount. I’m looking at VGIT as well. The question is more about how long do I want to play chicken while in SGOV.
Its 60% stocks, 40% bonds. Something like 60% VTI, 40% VGIT.
avoid BND. Choose a duration: SHV SHY VGIT VGLT.....
the first step would be to get a job just having 100k is sort of meaningless vs the power of earnings even earning 20k in 5 years you've made the 100k, whereas living off 100k you will be at 0 within 3 years. earnings is king the 100k id take maybe 20 to live on while i got a job then i would invest the 80k in 5k increments over months, you could hire a guy to invest it, pay him a fee, or you could just buy SPY and bonds, maybe like intermediate term government bonds, VGIT or something similiar. thatll take you like a year and a half or something. so if you run into an emergency youll have the capital to deal with it. put all the cash in a high yield savings getting 5% or better
OK, calm down. We can take 21 and 22 out the equation... From 2009 to 2020, VGIT's avg annual total return was 3.14% The best 3-year period VGIT had since it's inception was 2010 to 2012, with an average of 6.43%. In my opinion there isn't much basis to think that you will average 5.5% total return with VGIT, for example, in the near term (3 to 5 years). We might get a few more years of good bond returns here, but it's not likely to be sustained, because it never really historically has been sustained... at least not recently. You can choose to disagree, that's fine.
Very true. VGIT has a 3-year cumulative return of -12%. So my point is that, yes, right now you can get 5.5% with VGIT, but that isn't likely to be a sustainable return in the near-term (which I might define 3 years).
There are many ways to get 5.4% with medium/low risk. Vanguards investment grade short term and intermediate term bond funds (VGIT and VGSH) pay about 5.5% right now.
the 130k right either buy a house or invest like 30k minimum 50k max in 50% S&P and 50% bonds but buy in over time, like 10k 10k 10k 10k 10k or 10 5k's then every month take some more money and buy the same shit. SPY AND VGIT, SPY AND VGIT. and watch your money grow brother. just investing in murrica. the other portion of the 130k put in a high yield savings account. thats your rainy day fund and right now rainy day paying 5%. thats some good shit.
If I was trying to find a diversifier to VTSAX, I would put it in an intermediate treasury etf, such as VGIT. Usually, but not always, when the stock market goes down there is a flock to safety and it is usually treasuries, not high yield.
The definition of index fund is pretty broad. I am retired and have a lot of money in VCIT and VGIT outside of my 401K and VBTLX in my 401K. those are all considered to be "Index Funds" of various bonds models. I also have quite a bit of VINIX in my 401K which is a lot like VOO - maybe exactly the same. If you could all of that, I am around 70% index funds, of one sort or another
Where is still disagree is that my personal anxiety should be used alone as mechanism for investing. I’m anxious about all kinds of things! I do them anyway because I can rationalize the benefits. I appreciate your suggestions and breakdown and it does make me question what specifically was making me uncomfortable. I don’t think it was necessarily any specific number, but rather that I was missing something in the fundamentals of the investment. I had expected it to stay close to flat like a CD or bond. The fact it continued to go down surprised me and made me question if I understood how this really worked. This post was an attempt to validate my understanding of how this fund worked. I have since taken my new “safe” money and put it into CDs or government bonds directly. I’m guaranteed a 5% gain on those investments now. I’m still not sure when VGIT will come back.
I have no dreams of this going to the moon. It was never the purpose. My understanding of bagholding is someone who is at a loss and holding hoping they’ll recover their funds some day, when that likely will not happen. My concern was that I was missing something in the fundamentals of VGIT and would be asking this same question years from now after losing even more.
I'm not suggesting a bond ETF is too risky, I'm saying by you having this discussion it is showing that you are uncomfortable with its risk, otherwise you wouldn't be trying to figure out if you needed to dump it or not. If the 10% loss is not the issue, but the dollar amount is the issue, then one approach could be to lower the amount invested in it. If 10% accounted for $1000 would you be as concerned? What about $500? $50? You have to identify what it is about the investment that exceeds your risk tolerance, and adjust so that you are not worried about it. And I say that understanding that "you have to" is just me offering a suggestion. If it's not the dollar amount, then VGIT is an intermediate bond ETF. So if you do decide that the fund is too risky as a whole, % or $ volatility wise, then the recourse from there is to start looking at shorter term bond funds or possibly money market accounts.
The price of VGIT is practically guaranteed to recover, possibly dramatically. You need to understand how this investment works and the environment that caused its price to drop consistently for so long. Perhaps you don't need to be reminded of what has happened to the Federal funds rate (i.e. "interest rates") starting in March of 2022 and continuing unabated at a steep pace up until present day. This has made very short term bonds (U.S. Treasury bills) far more valuable to investors, and demolished the value of every bond fund holding medium and long term maturities. But that won't last forever. Interest rates are likely to stay high for a while, so in the interim you'll begin to slowly build back original value with higher yield dividend payouts. Make sure to reinvest them. But the big boost will eventually happen when the FFR begins to drop. It is not likely to drop anywhere close to pre-2022 levels, but even a percentage point or two will make a big difference for the bond fund. Selling now would basically be realizing a loss at a literal all-time low. But it's an opportunity cost question. Maybe you should sell and put the money into QQQ to gain back your initial investment potentially faster (no guarantees of anything).
20% SCHD (Dividend Etf) 20% VDC (Consumer Stapes Etf) 20% VGT (Pure Tech Etf) 15% VGSH (Short term treasury etf) 15% VGIT (Intermediate Term treasury etf) 10% VGLT (Long term treasury etf) This is my 60/40 Portfolio. You can trade the treasuries for municipal bond etfs if you wish to lower your tax burden. People here will probably balk at having 20+ year treasuries in their portfolio, but we're just coming off its worst year in history. There are hedge funds short it, but I think that ship has sailed. You can exchange it with VCSH, which is a short-term investment grade corporate bond etf, but the nice thing about the 20+ treasuries is that they offer awesome downside protection when the market absolutely collapses. A general rule of thumb is investing your age in fixed income and the rest in equity (you are 42, so you'd invest 42% in fixed income assets and 58% in riskier assets). You can also remove 5% from any of the etfs and invest that into a gold etf, which decreases portfolio volatility in general but is otherwise useless lol (not a productive asset).
100% stock? 50%VTI, 25%VXUS, 25%AVUV. 60/40? 30%VTI, 15%VXUS, 15% AVUV, 40%VGIT(or 20%VGIT & 20%VTIP). There's an empirical study based reason for each ETF and allocation percentage.
Everyone says you can't time the market, but algos and traders follow the chart to a high degree. Look at the chart of TLT, VGIT, SHY, which are Treasury bond ETFs of varying duration. Look at how 1-2 weeks ago we hit the same price point we had at least twice before in the past year, and we have now exploded up from this price point the same as before. This doesn't just happen by accident. I don't know if we'll ever see those prices again or not, but if we do, that's probably the time to buy. If you really want in on bonds now, one method could be to enter shorter duration (2-4 year maturities), and then if we dip more, rotate into longer duration (7 year, then 10, then 20 if we get to a really attractive price). You could use Treasury bond ETFs: SHY > IEI > IEF > TLT.
You need to look at total return. Bonds pay out considerable distributions. Furthermore, bonds rise and fall with expected inflation (long-duration) and Fed rates (short-duration). In my opinion, you should understand these concepts before investing in bonds. If you don't care to understand these things, and just want to add some diversified passive income to your portfolio, choose a short or intermediate-duration Treasury product (SGOV, SCHO, and/or VGIT). These will rise in a recession when everything else crashes, so you can then take advantage of the dip in stock prices and rebalance away from your bonds towards stocks.
Corporate bonds usually have higher yields but fall in a recession, while treasuries surge with any macro scare. Long-duration bonds are more volatile up and down, which gives more reward if you can time the bottom but more risk. Several reputable companies have ETFs with many choices. Blackrock, Vanguard, Schwab are probably the biggest. BND and AGG are combo products (MBS, corporate, and treasuries of diversified durations). VGIT is a nice intermediate duration Treasury fund. TLT is the highest volume bond fund if you want to trade options or swing with frequency. There are a number of shorter term products which offer greater stability (SGOV is the best for 0-3 month T-bills, SCHO for average 2 year maturity, etc.). If I had to recommend one product to diversify an equity portfolio, I'd say go with VGIT. You want negative correlation when algos crush stocks in a recession, which means Treasury bonds not corporate. And intermediate duration is probably appropriate right now when we are nearish to a yield top. If yields climb higher than expected, so bonds fall, you could always rotate into longer duration at that point which then has more upside potential to blast up out of the dip.
Most investing websites have screeners where you can look for individual bonds or bond ETFs or mutual funds. If you don’t know a lot about bonds currently the latter (ETFs and mutual funds) is easier. If you are already comfortable with VOO you might look into VGSH, VGIT, VGLT for short / intermediate / long term treasuries or something like BND which is a big pool of all those plus corporate, municipal, etc. Look up some articles on asset allocation and performance over time and get a sense of what your risk appetite is, what max drawdown you are comfortable with, and see how much a bonds recent yield is vs long term yield is. I would just read a lot until you get more comfortable considering those asset classes and what they can bring to your portfolio.
I use BND and VGIT 50/50. SGOV is short term 0-3 month treasuries, basically a cash equivalent.