Bond Funds
I saw your column “Beware of Bonds” I am currently invested in Vanguard Short Term Investment Grade fund (VFSUX) and Vanguard GNMA (VFIJX). This is money I need for living expenses – I am retired. Should I switch into Vanguard Money Market Fund?
Terry Says
You’ve been a big winner so far, because as I noted in the column, when interest rates fall, bond prices rise. And since these funds contain only high quality government bonds, you have no risk of default. Your only risk right now would be rising interest rates — which would cause bond prices to fall. And I don’t see that happening anytime soon.
However, I always like to have some money in a money market mutual fund. So now might be a good time to move some in there for easy access by check.
