Retired. Have hi yield bonds in vanguard also inflation protected securities bonds. Should I remain in these bond funds? I just opened the inflation protected bond fund but am now thinking I should get out. Need your opinion. Thank you so much, Jan

Terry Says:

The inflation-adjusted bond fund is designed to offset the possibility of higher interest rates causing price losses.  So that is some protection for your investment, and depending on your situation,  should remain in your portfolio.  The “high-yield” bond fund has likely done fairly well in the past two months, despite the recent rise in interest rates.  That’s because there is a perception that in an improving economy there is less chance of defaults in these riskier bonds.  But this is a speculation, and you might want to lighten up on this part of your portfolio, depending on your risk tolerance.

Have a Question?

Ask yours!