Quote:
Originally Posted by DON10E
Consider being very careful about holding bond funds. The ten year treasury bond is selling close to .6%. Not 6% but point-6 %. There's not a lot of room to drop from here. If rates go up the value of bond funds will drop. A rate increase from .6 to 1.2 could cause a 50% drop in the value of bond funds, depending on the bond maturities. Rates have never been lower in our lifetimes (well, mine anyway).
You said you're in cash bonds. Cash is an asset class and bonds are an asset class, but cash bonds is not an asset class, so decide how much of this post actually applies to you. Be careful. Also, feel free to ignore anything I say.
Good luck. Wash your hands!
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Should have mentioned, I am in UK.
Wife and I have been in cash bonds from when we retired 24 years ago.
Didn't want to spend our retirement sweating on something we had no control over.
Most are small (now, very small) interest rate, plus inflation, and whilst not making us any wealthier, they have kept us and our savings safe from market fluctuations.
So we can budget and spend pretty much knowing what our bottom line is.
Stay well.
Don't cough in the supermarket!