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Author Topic: What to do with a bond fund?  (Read 1909 times)

Greystache

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What to do with a bond fund?
« on: September 05, 2014, 08:34:58 PM »
I have some of my short term money in a Franklin Templeton California bond fund. The Fed has all but stated that they intend to raise interest rates next year.  Should I be selling?  If so, where should I park this money? This is money that I intend to use in the next few years.
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TomTX

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Re: What to do with a bond fund?
« Reply #1 on: September 05, 2014, 08:43:22 PM »
CDs?
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Sdsailing

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Re: What to do with a bond fund?
« Reply #2 on: September 06, 2014, 01:28:27 PM »

The obvious answer is to go shorter term.  However I disagree with the premise.  Higher interest rates have been certainly imminent for years.  Bonds have been doing well.
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RyeWhiskey

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Re: What to do with a bond fund?
« Reply #3 on: September 06, 2014, 04:14:14 PM »
If you invested it appropriately then you took on the right amount of risk for your time horizon. If it's a short-term fund it should have a duration of under 2 years indicating that a 1% rise in interest rates (if this even happens) would result in a 2% decrease in NAV for the fund. Is this not an acceptable amount of risk for you?

If not, then CDs are the next best option.
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