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Learning, Sharing, and Teaching => Investor Alley => Topic started by: shanaling on December 06, 2016, 11:44:20 PM

Title: Is this a good time to buy VBTLX?
Post by: shanaling on December 06, 2016, 11:44:20 PM
Bond prices have been very low since the election. I have about $80k in a savings account earning 1% interest. This is for downpayment I will be needing in a year. Should I put this money into VBTLX and continue contributing down payment money into this fund in the upcoming year?
Title: Re: Is this a good time to buy VBTLX?
Post by: Kriegsspiel on December 07, 2016, 06:40:34 AM
No.
Title: Re: Is this a good time to buy VBTLX?
Post by: Metric Mouse on December 07, 2016, 06:51:45 AM
No.

+1
Title: Re: Is this a good time to buy VBTLX?
Post by: bigwhitedawg on December 07, 2016, 07:20:15 AM
As a newbie investor, I'd be interested in learning why this is a bad or at least not recommended move.  Thoughts?
Title: Re: Is this a good time to buy VBTLX?
Post by: Interest Compound on December 07, 2016, 08:01:01 AM
As a newbie investor, I'd be interested in learning why this is a bad or at least not recommended move.  Thoughts?

Investing in Bonds with money you need for a downpayment in 1 year, meh. Depends on your own personal ability, willingness, and need to take financial risk. You can make an argument for or against it, but it's a personal decision.

Investing in Bonds because you think bonds are "very low" = market timing. Nope.
Title: Re: Is this a good time to buy VBTLX?
Post by: mskyle on December 07, 2016, 08:18:32 AM
I'm investing my house down payment money (planning to use in the next few years) in VBLTX, but not because I think the bond market is currently underpriced, just because I want to keep it somewhere less volatile than VTSAX but still have some room for growth. Right now it's looking like a terrible idea because, as you say, the bond market is down, but I haven't lost too much money and hopefully there will be some upside before I decide to buy.

I didn't actually change my asset allocation much, just moved more of my taxable brokerage account to VBLTX and more of my non-taxable to stocks. If I do end up using the brokerage account money for a down payment I'll rebalance to my original AA.
Title: Re: Is this a good time to buy VBTLX?
Post by: 2Birds1Stone on December 07, 2016, 08:41:40 AM
no
Title: Re: Is this a good time to buy VBTLX?
Post by: seattlecyclone on December 07, 2016, 09:04:47 AM
For long-term investments, invest according to your asset allocation.

For the short term, bonds seem like they're probably at least as good as a savings account. Not going to go down much, and probably will increase more than the piddly interest rate most places are paying.