Author Topic: Ladder CD vs Bond Fund  (Read 1078 times)

12knots

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Ladder CD vs Bond Fund
« on: March 22, 2023, 12:35:32 PM »
I've had a smaller segment of my traditional IRA portfolio in cash that I think has been sitting idle a little too long.
With the premise that interest rates are good, I'm thinking of going in on a laddered CD or just contributing to an existing position in a Total Bond Fund just to keep things simple. Pros vs Cons?

cool7hand

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Re: Ladder CD vs Bond Fund
« Reply #1 on: March 23, 2023, 07:14:46 AM »
Maybe just pick an asset mix that fits your goals and go with that?

talltexan

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Re: Ladder CD vs Bond Fund
« Reply #2 on: March 23, 2023, 07:44:08 AM »
You don't need to do the ladder all at once: put 60% of the money into the longest term you can, and the rest of the money into something like a 1-year. Then you don't have to think about it until next year.

Unionville

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Re: Ladder CD vs Bond Fund
« Reply #3 on: March 24, 2023, 04:59:14 PM »
CD's are one of the few things that are FDIC insured (unlike mutual funds, money market funds, bonds) and rates are decent right now.  I just bought a 5yr at 5% this morning.  You could do a ladder up to 5 years, since the rates fall off significantly after that.
« Last Edit: March 24, 2023, 05:03:24 PM by TodayOhBoy »

clumlee

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Re: Ladder CD vs Bond Fund
« Reply #4 on: April 02, 2023, 12:36:18 PM »
If you're holding CDs til maturity, then the CD values don't change. Whereas the bond funds can change based on daily price movements.