I decided to post about bonds since I have been reading about this subject so many times and for several years already.
The concept is "when rates rise, bonds are doomed".
So let's test it based on the past. The Fed raised the federal funds rate from 12/2015 at 0.25-0.50 to 12/2018 at 2.25-2.5%, see (link
This looks like a pretty good possible scenario starting in 2-3 years. Let's see the effect on different fund categories from 12/31/2015 to 12/31/2018.Below is a total performance for 3 years.
PIMIX (Multi sector) +18.75...PTIAX 14.3%
VWALX(HY Muni) +10.45...OPTAX(HY Muni) 16.7%...HYD(HY Muni index) 13.3%
MUNI (Investment grade Munis) +5.5%
BIV (all investment grade, 50% treasuries + 50% Corp) +6.7
VBTLX=BND (US tot bond index) +6.2%
VCIT (investment grade Corp) 9.15%...LQD (longer duration than VCIT, investment grade Corp) 9.3%
EIFAX (bank loan managed) 19.1%...BKLN(BL index) 10.9%
HYG (High yield) +18.5%
DODIX(core plus managed bond fund) +9.9%
VWIAX (conservative allocation about 40/60) +16.3%
So, every time you read or hear that rising rates is the end of the world please disregard it.
Bonds have a place for many investors portfolios, especially if you want to lower volatility.
If you don't care, whatever the reason then by all means, invest it all in stocks.