Having chosen to be bonded at the hip to FIDO in my 403b, and facing 0.01% money market returns in the third year of a presidential cycle, with a US stock market that seems fairly to over-valued, and Ukraine, Iran, and China posing concerns, I wondered what others might choose from the following options: FNMIX (are emerging market bonds coming back?) which might offer more return; FFRHX (lower return with some experts claiming these funds aren't as safe as they seem - but FIDO has good bond analysts); FAGIX (high yield, an area which has usually done better than predicted).
These funds have redemption fees of 1% for 60 to 90 days, which shouldn't matter, since funds would only be moved to equities if there were a precipitous decline (and I'd be late to the party anyway). All lost varying amounts in 2008-9, and less in 2011; and I am retiring probably in 3 years, so income would be nice, but I can tolerate some volatility, if I am made whole in 5 to 7 years.
If you feel I have abused the site, keep the castigations brief. I can tolerate more risk than short-term bond funds offer. I'm about 65% in equities across my various retirement accounts, if that colors your answer. My wife and I can probably survive for a year or two on SS income, but she'd be complaining (I actually like beans and rice - with enough spices).
Comments
An equal basket of TIPS, intermediate US treasuries, short term corporate, GNMA, corporate high yield, and national muni high yield is as close as I have experienced to a "permanent" portfolio for all market conditions and without worrying about investment horizon.
Since FAIGX has 70% equity and costs 1.16%,, I'll just slump back in my rocking chair on the porch, Ted. (Or did you mean FAGIX?)
EM bonds are too volatile for this type of portfolio although they can increase total return over time. If you use enough allocation to make a practical difference, they will pull you down enough to make a difference at times! Best left to active managers in multi sector funds or portfolios where you are actively managing allocation to exploit its volatility. They move slowly enough relative to typical equities that they are great for momentum based strategies and the returns make it worthwhile to do so.
I am not suggesting that international bond funds are useless for any purpose. Depends on the portfolio strategy. My suggestion was for the simplest alternative to a single multi sector bond fund for a buy and forget type not to imply suitability of funds for portfolios in general.
There are a lot of Vanguard funds I wouldn't use for a specific application but are used for various (valid) purposes.