I think you missed the part where I said, "That may or may not happen."1) don’t count on it - the telegraph is not reliable means of communication and is subject to change. Rumors are 1/2 point cut, other rumors are 1/4 point cut and others yet, no cuts.The tradeoff is this.Is there a better alternative to BND? Is now a good time to buy or wait until the Fed raises rates? What about a managed fixed income fund?
Your VMFXX Federal Money Market Fund pays over 5% annual interest. The Federal Reserve Board has mentioned a rate cut of .5% sometime this year. That may or may not happen, though. With VMFXX investment, you will get your invested money back. The $1.00 price will remain steady.
Your proposed BND fund has a NAV price today of $72.50 per share. There is a monthly dividend paid each month. The average duration of the many individual bonds in the fund is 6.0 years, according to Vanguard.
When will you use this money? In what type of account will you hold this investment? Approximately how old are you?
2) If the OP doesn’t like NAV fluctuation and plans to hold to maturity, then a ladder of T-bills and T-Notes can be another way to capture income with knowledge there will be a known nominal end value.
3) if they need immediate liquidity, current income and a floating rate vehicle then hard to beat VUSXX - Treasury money market fund.
Many tools to accomplish end goals along risk spectrum.
Also not a big fan of BND but retirement plan doesn’t provide a different alternative for my own account. My choice would be intermediate treasury only, if I had a choice.
Statistics: Posted by Target2019 — Fri Jun 14, 2024 5:36 am — Replies 86 — Views 4054