Thread: 401k Bonds

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  1. #1
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    401k Bonds

    I'm looking at my 401k which has balance of 70% stock and 30% bonds. The bonds haven't done well lately, so do I keep contributing to the bonds or rebalance to go heavier on stocks? I'll be 55 next month and would like retire when I'm 60. Just trying to maximize my account the best that I can. Any feed back would be greatly appreciated.

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    #2
    I'm far from an expert but at 55 I would keep buying at that rate, if your comfortable with that, but make sure your diverse in both your bond funds and stock funds....Everything goes in cycles
    ..
    My international funds havent done well lately but they will come back....Nice thing about 401ks is you invest every week so you get the benefit of investment averaging over time..
    "Historically the most terrible things-war, genocide and slavery-have resulted not from disobedience but from obedience"
    Zinn

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    #3
    Quote Originally Posted by mustanggtr View Post
    I'm looking at my 401k which has balance of 70% stock and 30% bonds. The bonds haven't done well lately, so do I keep contributing to the bonds or rebalance to go heavier on stocks? I'll be 55 next month and would like retire when I'm 60. Just trying to maximize my account the best that I can. Any feed back would be greatly appreciated.
    Bonds have not done well due to riding interest rates. If you think rates will continue to rise then you should be prepared for it to be dead money at best for a while. If your plan has a rising rate fund that may be something to check out. If not, I would own the shortest duration fund offered in the plan.

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    #4
    Do you hold individual bonds or bond funds? If you are buying individual bonds you can ladder some short ones while rates are rising and reinvest as they mature. Once rates rise then you may want to go out a bit further on the long end assuming that the longer rates keep climbing. Tough to time these things though.

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    #5
    Quote Originally Posted by NitroZ7 View Post
    Do you hold individual bonds or bond funds? If you are buying individual bonds you can ladder some short ones while rates are rising and reinvest as they mature. Once rates rise then you may want to go out a bit further on the long end assuming that the longer rates keep climbing. Tough to time these things though.
    My 401k are bonds funds which is not much to choose from. I am laddering CDs which helping but I do need to have some emergency funds just in case.

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    #6
    The longer rates are really heading up today.