Bond Funds that Don't Lose Money?

[lshrtwll]

I am considering bonds or bond funds for the percent of my portfolio that needs to be low risk. I've been buying CD's inside my IRA. I'm hesitant to buy bond funds because I actually lost money in them a few decades ago because I guess I entered the market at the wrong time. Is now a good time to invest in bonds? If so, which bond funds or bonds do you recommend (big question, I know)? If it's not a good time, which is another safe place to park the money besides CDs and Treasury? I'm hoping for at least a 5% return in something safe. I'm at retirement age, but I don't need to cash out the money.  I prefer Fidelity fund since that is where my IRA is.

[LightStache]

In my Fidelity IRA I own IUSB, IAGG, and LTPZ. They have low volatility but all yield less than 5%. None of those are Fidelity products and I don't see why you'd prefer that, although you could probably find Fidelity-branded analogues.

To get a 5% yield you'd have to blend in some high yield bonds like HYG, but those will carry more risk/volatility. So something like 50% IUSB - 50% HYG might get you close.

Edited to add: Regarding the post subject, such a thing does not exist. Your goals of making at least 5% but not risking loss are not possible together.

[Financial.Velociraptor]

New York Life is currently offering a SPIA when payment is greater than 100,000 USD of 7.85% on a 6 year term.  While fixed income, not a bond, much closer to bank CD with some extra early termination restrictions.  But your principal is safe in every scenario except the failure of a major life insurance provider.  That is super rare over the last 200 years and the big players all have robust re-insurance contracts to backstop long tail risks.  Could be in a tIRA or Roth as well.  If you need RMD compliant probably give up 50+ basis points on that yield.   Would not be held by your broker.

[Heckler]

I am considering bonds or bond funds for the percent of my portfolio that needs to be low risk.

I'm at retirement age, but I don't need to cash out the money.  I prefer Fidelity fund since that is where my IRA is.

I’d suggest learning about Duration.

https://www.bogleheads.org/wiki/Individual_bonds_vs_a_bond_fund#Duration

https://www.investopedia.com/terms/d/duration.asp

[lshrtwll]

Edited to add: Regarding the post subject, such a thing does not exist. Your goals of making at least 5% but not risking loss are not possible together.

Just knowing this is helpful.

[dividendman]

You can get about 4.5% right now in SGOV, an ETF that holds only 1-3 month Treasuries... that's pretty much as safe as you can get.

[LightStache]

New York Life is currently offering a SPIA when payment is greater than 100,000 USD of 7.85% on a 6 year term.  While fixed income, not a bond, much closer to bank CD with some extra early termination restrictions.  But your principal is safe in every scenario except the failure of a major life insurance provider.  That is super rare over the last 200 years and the big players all have robust re-insurance contracts to backstop long tail risks.  Could be in a tIRA or Roth as well.  If you need RMD compliant probably give up 50+ basis points on that yield.   Would not be held by your broker.

Where are you finding that quote? Sounds like an amazing deal but I'm seeing rates from 4% - 4.7% for that kind of product.

[mistymoney]

 not bonds, but MYGAs are currently paying over 5% in many instances, and the principal is secure if you don't withdrawal early or the insurance carrier goes belly up. There are a lot of caveates to selecting one - don't just go for highest interest rate you need to consider the AM best rating, and don't exceed your states guaranty amount.

but you only lock in the interest rate for 10 years or less.

[Financial.Velociraptor]

New York Life is currently offering a SPIA when payment is greater than 100,000 USD of 7.85% on a 6 year term.  While fixed income, not a bond, much closer to bank CD with some extra early termination restrictions.  But your principal is safe in every scenario except the failure of a major life insurance provider.  That is super rare over the last 200 years and the big players all have robust re-insurance contracts to backstop long tail risks.  Could be in a tIRA or Roth as well.  If you need RMD compliant probably give up 50+ basis points on that yield.   Would not be held by your broker.

Where are you finding that quote? Sounds like an amazing deal but I'm seeing rates from 4% - 4.7% for that kind of product.

I did a quick Google search and it was the top item in the AI generated results.

[Radagast]

Series I savings bonds at 3.11%. It seems lower and there are some caveats, but they are also quite a bit less risky than other options and have some other benefits such as deferred tax on interest which make them worth the yield (up to you if it's worth the TD account).

[Heckler]

New York Life is currently offering a SPIA when payment is greater than 100,000 USD of 7.85% on a 6 year term.  While fixed income, not a bond, much closer to bank CD with some extra early termination restrictions.  But your principal is safe in every scenario except the failure of a major life insurance provider.  That is super rare over the last 200 years and the big players all have robust re-insurance contracts to backstop long tail risks.  Could be in a tIRA or Roth as well.  If you need RMD compliant probably give up 50+ basis points on that yield.   Would not be held by your broker.

Where are you finding that quote? Sounds like an amazing deal but I'm seeing rates from 4% - 4.7% for that kind of product.

I did a quick Google search and it was the top item in the AI generated results.

Careful with the well laid out and convincing scam websites that can show up with searches like this.  I recently read about someone loosing a significant sum investing based on a google search, click a convincing link, sign up and bam!

https://www.ctvnews.ca/toronto/article/more-victims-come-forward-in-fake-website-gic-scam/

[Dee18]

Marcus (Goldman Sachs) is currently offering a 14 month CD at 4.5%, FDIC insured.  Of course that just kicks the can down the road.