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What's in the Fixed Income portion of your portfolio?

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It depends...

If bonds are supposed to be part of my long-term portfolio, then 0% bonds for me. I prefer equities.

"What's in the Fixed Income portion of your portfolio?"

I consider my workplace pension my bond.

If short-term, mostly cash, albeit it's not very much.
 

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Mostly GICs, but enough bond ETFs to enable me to sell some to rebalance to equities if ever needed. Of the bond ETFs, it is split roughly equally between VAB and VSC.
 

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By a large margin, HISAs and 5 yr GIC ladder. Also a bit of ZCM and a few bonds/debentures in the RRSP/TFSA to keep it interesting. The bond yield curve has to improve significantly to move into 7-10 year bonds.
 

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Discussion Starter #7
Last year Peoples Trust TFSA looked like a no-brainer at 3%. But now that it dropped to 2.25%, I don't want to add more money to it. After the long weekend my husband and I will be adding more money to our accounts - I was set on buying two strips in our RRSPs (to start), but my husband wants to wait some more for the rates to go up... So sometimes I wish we would just VAB :)
 

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I have CBO and CLF, 60:40 split. But this part of my portfolio is saving for down-payment for a house, unlike the rest (For retirement). I also have a smaller 5-year GIC ladder.

Fixed income is used to dampen the heart-attack factor when a market correction / crash happens. But now short-term bonds yield is so low that you might as well put it in HISA and forget about interest rate risk.
 

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Discussion Starter #12
Fixed income is used to dampen the heart-attack factor when a market correction / crash happens. But now short-term bonds yield is so low that you might as well put it in HISA and forget about interest rate risk.
Yeah, for us it's just a matter of protecting a portion of our combined portfolio. I liked the idea of a GIC ladder (2.25-2.65% at PT) for short term and strip bonds ladder (2.40-3.50%) for mid term. This way we would have 5-8K maturing every year for the next 8 years - which we would hopefully be able to redeploy at higher rates (and wouldn't have to worry about rate fluctuations in between) We also have 1.6% PT HISA, where my husband would prefer to park his extra cash - at least till Feb next year (RRSP contributions deadline :))

But after reading that article I started to doubt that maybe I'm thinking too short-term indeed and overcomplicating things, and VAB with its 7.8 years average duration (but only 1.7% YTM at the moment) would achieve similar or better results?.
 

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Discussion Starter #14
This. No bonds in the portfolio currently. And since it's probably too late to get in, it'll probably remain like that the first few years.
I loved having REITs and dividend stocks "in lieu of bonds", but since some of them dropped 10-30%, figured it would be nice to have a bit of something we can count on in our 50's... but yeah, my husband keeps telling me that it's too late to start buying bonds now, might as well wait till the rates go up - I wish they did already... :)
 

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Discussion Starter #16
It could be years until they rise...who knows! Experts keep saying things will go up but the experts don't know :)
Yeah, I noticed :) And regretted not starting the GIC ladder in the beginning of the year - before the unexpected rate cut... lol So part of me wants to wait till they at least "restore" the rate to 1% - yet I can't discount the probability that they may surprise us again... :)
 

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DB pension is the same as an annuity, which is fixed income, albeit potentially with a higher default risk factor (depending on employer). If it is the civil service, then no risk of default. If Nortel, well...... Credit risk your DB pension the way you would a bond (AAA all the way to junk).
 

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Looking at the couch potato recommended ETF, / conservative portfolio, it has VAB as 70% of your investment.

Looking at last 5 year graph, VAB did a whopping 2.2% which is not very far from the inflation rate.

Not sure I understand all the hype about VAB ? Not bashing it but there's got to be better investments for that 70%
 
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