This is why I’ve preached do not own bond funds, own the actual bond. They get marked to market like everything else. If you own the actual bond and hold it to maturity (and the company does not go bankrupt), you get all your money back. In a fund the bonds are pricing in risk. I own a few million of bonds well diversified in chunks no greater than $30k, most less than that. Higher risk from an individual default, but the government just said they are backing all corporate and municipal bonds for the first time in history. My bonds mark to market lower in value, but that will be returned as they mature. There could also be a total systemic failure and they are just wiped clean.
I would be willing to bet that’s not going to happen, but the fact the markets have been juiced by free money from the FED and stock buybacks is going to prove the whole 4% rule a farce.
Do people realize that more stock transactions over the past decade were from corporate buy backs than, individual investors/mutual funds/hedge funds combined? The party might be over for the 100% VTASX FIRE crowd. I hope not even though I’m an 20% stocks allocation guy.