Monday, April 16, 2012

Bonds and beyond

I've finally settled on a strategy for my "bond" money (money not tied to common stocks and paying interest/dividends). It's based on using ETFs instead of bond funds - easier to trade and track methinks. So here it is:

50% VCSH (Vanguard Short Term Corporate)
25% TIPS (iShares Inflation-protected Treasuries)
25% Money market fund

Inflation is quite low now, but I worry about it because the national debt keeps growing by leaps and bounds. There's only four ways out: default, raise taxes, cut spending, inflate. I'm thinking the last of these will be the choice of the powers that be, and my three investment choices should keep their value during inflationary times.

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