Pending Fed’s rate increase and investment strategy

I’m a fan of your no nonsense approach to savings and investments. I’m a very small investor, but after taking your great advise about paying off student debt, and paying down credit I have managed to save up 100K through my employer ‘s sponsored retirement funds. I am retiring with a very healthy private Firefighters pension, that will allow me to leave funds intact. I may need to pull from the retirement account for very major expenses, so with the pending rate hikes coming; what would be the best strategy/fund to put my money so I can be assured to not lose principal? Well, best choice to not lose a major part anyway! Currently I am in American Fund’s Washington Mutual Investors, but this fund has very little bond involvement. Thanks in advance.
Jim

Terry Says:  Well, first, congratulations on proving it can be done.  Don’t forget that at some point — age 70-1/2 — you will be forced to withdraw a portion of your money each year , the Required Minimum Distribution, because the government wants its tax money!

Now, to the point of your question.  The honest answer is that I don’t have a great answer, and I ask myself that question all the time!

If you own stocks, the market could fall.  And you will lose money.

If you own bonds, and the Fed decides to raise rates, the value of your bonds will fall (as newer,higher-rate bonds become more attractive to buyers,, so they’ll pay less for your old lower-rate bonds.

If you stick with something conservative like money market funds or CDS, you hardly get paid any interest — so you can’t lose any money (except to inflation and taxes).

My best answer is BALANCE!  What lets you sleep at night?  That’s the real question to ask yourself!