I bought some treasury bond mutual funds (FSBIX) last month in my 401(k). My company’s 401(k) is going to be moving from Fidelity to Ubiquity in the new year (we are moving from a self-employed 401(k) to a safe harbor one). We have to liquidate all our positions when we make the transfer. I had just added a lot of contributions in October, but I didn’t want to buy stock-heavy mutual funds when I have to liquidate so soon, plus I didn't want to incur fees for selling in less than 90 days.
But I didn’t want it to sit in cash reserves earning Fidelity’s excellent rate of 0% (In hindsight, I should have held most of it in my savings account earning .75% instead but some contributions were for 2014 right before I filed my taxes before the Oct 15 extension deadline)
Unfortunately the bond is going lower in price, and I’m worried that with the imminent interest rate hike that the bond will go down further. I wonder if I should cut my losses now. I have 14K invested in them, and I’ve lost $102 bucks, so it is annoying but not painful. Or is there going to be a payout I’m going to miss? After I bought it I realized I didn’t understand how the treasury bonds work. I think I had googled about something safe that would get me a little bit of interest in the short term. TIA