I'm mostly 100% equities, and am cool with that, but I was thinking of setting up a 5% or 10% bond position, after reading a couple of books and seeing how rebalancing forces you to sell high and buy low, I guess, or whatever. You know what I'm trying to say.
So to benefit from your combined wisdom, I was just curious what you use to buy bonds. My first instinct is to just buy a low cost vanguard bond fund like VBLTX or VBTLX, going for the lowest expense ratio etc.
Does that sound reasonable?
[Emphasis added]
You do say "or whatever" so I'm not 100% sure if this is what you meant.
I wish I could quote a previous post I made on the topic but I can't seem to find it right now. Anyways...
If you want to buy bonds, it should ONLY be because you want to lower the volatility in your portfolio. This "buy low sell high" argument makes it seem on the surface that you're going to get better returns. This is NOT true. Bonds lag stocks by a significant margin when stocks aren't crashing.
To see this, run cFiIREsim with a spending amount of $0. With starting portfolios of $1M you get portfolio end values of:
90/10: Median $5.561M
95/5: Median $5.826M
100/0: Median $5.943M
The trend is the same with the averages.
You also see the same trend if you do have a spending plan in there. I ran it with the default spend value of inflation adjusted $40k a year and got:
90/10: Median $1.780M
95/5: Median $1.974M
100/0: Median: $2.152M
If you do decide to go with bonds, I'd rather use VBTLX. Limiting yourself to just long term bonds exposes yourself to more interest rate risk than VBLTX.