Is it good to have some money in short term bond funds at this time.

Oldman answered 8 months ago …

Not knowing whether you're 25, 50 or 75 y.o., it's hard to judge the apprpriateness of a 50% short-term bond position. If this is trying to conserve cash, the inflationary effects of the M3 (money increase by the U.S. Fed expansion...which exactly coincides with the increase in crude oil prices) will DECREASE the value of any capital and dividends ...by at least 3.5 percent per year.

I certainly wouldn't advisse putting any funds into Junk bonds , e.g. fidelity High Income or Capital anf Income, because although the spread between treasuries and BBB or lower-rated bonds has increased, the net asset value of the Capital and Income shares is also decreasing with the writedowns and defaults.

To compensate for the low yield on the shortterm bonds, you could look at NewMarkets Income...a foreign high yield fund, fo a small proportion of your bond portfolio.

If you hold these funds in a taxable or self-directed account, take a look at

http://www.EverBank.com, which offers a FDIC-insured CD with the currencies of three stongly performing countries: a Renminbi denominated CD (because the Chinese currency has appreciated 14 % vs the U.S. dollar last year, and 7 % so far this year. They also offer protected return type deposits, where the principal deposit is guaranteed, but you may gain from the appreciation of the underlying currency. Again, this isn't for every dollar you have in short-term U.S. bonds

Finally, there's an ETF (go to http://etf.Seekingalpha.com) and look for

International TIPs

in the search bar.