Is A Bond Fund Like Pttax A Good Choice For My 401k?
I am about 2-5 years away from retirement. I didn’t want to go cash because the yield is a wimpy 0.12%. Bond funds like PTTAX have a yield of 4.73% and are fairly safe. All I need is a 3-5% return here. Will I get this from a bond fund? Which is better right now—bonds or cash? Are most investors now going into cash, bonds, or stocks?
Safer than stocks, that’s for sure. The biggest risk to bond fund returns is probably rising interest rates, which would depress the market value of bonds held by the funds. But PIMCO is certainly one of the best.
Bonds will yield you something greater than money markets, and are equally safe. The answer is simple, bonds are yielding much more than money markets. What does it matter what most investors are doing? Most investors maybe 20 years from retirement, you sound much closer. It all comes down to your risk tolerance, not that of others.