Possibly, but for the most part I take risk in the equity portion of my portfolio. It has taken me a number of years to finally accept that the purpose and risk profile of the bond ladder is something totally different.
Slight topic drift alert as I explain the rationale behind the buy. Once upon a time I just used an ETF tracking the DEX Universal Bond Index (or whatever it's called these days) for our fixed income allocation and accepted the market returns. That's still how I guide my adult children and almost everyone else.
Neither my spouse or I have a DB pension, so a number of years back as retirement appeared on the distant horizon, I decided to setup and manage my own 10 year bond ladder, as much for hands on education purposes as anything else. Each of the rungs on the ladder loosely matches our guestimate of post-retirement annual spending, i.e. a liability-matching setup.
For a number of years I hesitated and chased yields and the bond ladder had many incomplete or missing rungs. The low interest environment of the past number of years has been very trying, but ultimately educational. It is hard to push the "Buy" button on fixed income these days when you look at things on the absolute scale.
scomac wrote: ↑03 Apr 2017 11:29
Gobsmacked that all you can earn with BBB risk is 2 and change for 6+ years!
Totally agree if you look at the purchase in isolation. But my viewpoint is much larger in an overall portfolio context. This is just one needle and I'm watching the whole haystack. Heck, from higher level viewpoint, I struggled a bit with moving into the BBB realm, but for the semi-informed retail investor that's probably the best place to be shopping these days for fixed income, there is a small yield advantage versus GICs.