LTerm Bond Portfolio

[luckyd1976]

LongTerm Bond Guys,
What does everyone think of this strategy?

I'm looking for a new sustainable LT (Out 10yr window) Income strategy. I really dont want to Ladder the bonds out to much on time frame.

This Strategy is Based on the book,
"Bonds" by Hildy Richelson & Stan Richelson.
Page 43.

100 Percent Bond Portfolio
25% Taxable Agency Bonds (2yr)
25% Taxable T-Bills (50% 3mon, 25% 6mon, 25% 1yr)
12.5% Zero Coupon Munis (8 yr, 9yr, 10yr, 11yr, 12yr)
12.5% Taxable Money Market (Savings)
12.5% 1yr Bank CD (1yr)
12.5% Tips (5yr, 10yr)

Any feedback would be greatly appreciated.

 

[Rhody Trader]

The first question I would ask is why, repeatedly? Why have some money in 1 year T-Bills and some in 1 year CDs. They amount to the same thing aside from the fact that you could sell the Bills if necessary, while the CD would incur a penalty for early withdrawl. Why only 12.5% in tax free stuff? Why so little in anything beyond 1 yr period? Why 25% in 2yr Agencies? Give us some reasons.

 

[luckyd1976]

The first question I would ask is why, repeatedly...Give us some reasons.

Basics of why I'm even moving a portion of my account into a LT Bond Portfolio. Small Business preparing for the next level, Safety, and a free(ing) of time for a new business venture. And since Im NEW to LT income I was hoping for some feedback. (portfolio is Based on book mentioned above)

Why have some money in 1 year T-Bills and some in 1 year CDs. They amount to the same thing aside from the fact that you could sell the Bills if necessary, while the CD would incur a penalty for early withdrawl.

Good point. But the TBills are laddered 3 mon, 6 mon, and 1yr for sooner access without the penalties/commission. Can both Tbills/CDs be used as collateral for corporate balance sheets?

Why only 12.5% in tax free stuff?

I wanted the tax free stuff to be my longest term horizons. And currently IM not liking the returns of reg treasuries.

Why so little in anything beyond 1 yr period?

At the current rates Im more concerned about sooner access and availability as colateral than locking in to longer treasuries.

Why 25% in 2yr Agencies?

2yr agency paper are paying out better than 2yr Tbills

All the percentages are subject to change and were taken from the book mentioned above. LT Income, Hopefully this will cover all my employees needs SAFELY while I move into other areas of my entrepreneurial ventures.

 

[Rhody Trader]

OK. Let's back this up. What exactly are you trying to accomplish? What is the cashflow pattern you're looking to develop?