| What holdings for the next 5 yrs in fixed income part of portfolio seem best? Bill Gross is very cautions re domestic bonds for this period. Some recommend ladders of individual high quality short duration bonds, or cds, or 3 month treasuries, or even money market funds, assuming a minimum of $50,000 to 100,000 for this part of your portfolio. The purpose of this part of the portfolio is to lower beta, raise total portfolio yield, preserve capital, and in the current economic conditions, protect from expected interest rate risk. Assume a portfolio beta of l (before the fixed income part is added) and the whole portfolio to be tax sheltered. What are your opinions and can you recommend current research, financial articles, academic papers etc dealing with this aspect of tactical asset allocation for the next five years? |
