bonds
Hi Terry, I have 16.1% stocks, 37.4 % bonds, 46.5 % short-term reserves. I saw you on WGN the other day and the bond market does not look too good. Should I transfer a percentage of the bonds into the short-term reserves. You have given me good directions in the past and I thank you Mary
Terry Says
The problem with bonds is that when interest rates rise, bond prices fall. That doesn’t matter if you aren’t going to sell the bonds. But it does mean you are stuck with older, low-yielding bonds when newer bonds pay more to compensate for inflation.
There are a number of things to consider: if they are in a taxable account, there could be gains (or losses). So ask your tax advisor.
What is the quality and maturity of your bonds. (Brokers won’t help — you need a FIDUCIARY financial planner to go over those issues because he/she will not be trying to sell you something. Find this type of fee-only advisor at www.Wealthramp.com.
And then there’s the question of what you would do with the money! Putting it in a money market fund (where it looks like you already have a lot of assets) means you are losing out by getting 1% interest while inflation is running at 6%!
So I can’t give you a simple answer to your question!
