I recently joined the forum, as after being just a reader for quite some time, realized that would appreciate your feedback on couple of points. (actually I asked the similar question in parallel thread, but was advised (thanks!) to move it here as more appropriate)
I am now re-shaping my portfolio and trying to come to a view on the bond part.
From one side we have wisdom of B.Graham, who says that at all times bonds should be min. 25% of your portfolio; Bogleheads portfolios with substantial pieces of bonds (including such as TIPS); and Jim Rogers telling us that we are going to face largest crisis in our lives soon…
On the other side, we are now in interest raising environment where EU will join US on this way rather sooner than later. Plus “some well-informed Bogleheads make a strong case that the “bond” component of a three-fund portfolio might well be filled with non-brokered bank CDs instead of a traditional bond fund”, and even some Bogleheads guru recommending the replacement of a traditional high-grade bond funds with a 50/50 mix of emerging markets bonds and a high-dividend stock fund.
What is your view on bonds in general? Should we still keep it and really treat the rest as market noise or reality changed?
So far I am more inclining towards more classical approach, i.e. to keep bonds (in my case around 30%) and considering splitting them in three parts 10% each using Vanguard’s ETFs:
•US market – BDN, Total Bond Market ETF, which has 63% US Gov and 27% low IG, more as protection
•US market – VCSH, Short-Term Corporate Bond ETF, c.100% IG, mainly because of short duration
•International market – BNDX, Total International Bond ETF, international diversification
Any comments or criticism would be highly appreciated!