Understanding bonds and bond ETFs is a post compiling my favorite bond educational resources.
I believe that after carefully reading and re-reading all of this material, one should get a good grasp of how it all works.
The key is to distinguish what you use bonds for:
I believe that after carefully reading and re-reading all of this material, one should get a good grasp of how it all works.
The key is to distinguish what you use bonds for:
- as part of a long-term "never sell" portfolio, for example for retirement, in which case the timeless intermediate-term government bond ETF is appropriate (unless one wants to speculate on short or medium term interest rate movements - not the Bogleheads way)
- to match a known liability at a known future time, in which case one should use either:
- a fixed maturity bond ETF such as the iBond ETFs
- zero coupon bonds maturing when the liability is due
- a combination of bond ETFs of different average maturities regularly rebalanced so that the average maturity of the combination matches the deadline for the liability
- a non-rolling bond ladder of individual bonds
Statistics: Posted by daviddem — Sat Sep 07, 2024 1:01 am — Replies 70 — Views 10519