BONDage

Apropos to the comments left on my last post, I have been paying more attention to my 401(k).

For most of my financial life, I've put whatever monies I had available into stock mutual funds, often index funds.

I proudly avoided bond funds and money market funds right up until the end of 2009, by which time it just got too frightening to see the volatility within my retirement resources.

So, I started putting new money into bonds.

Right now, I have about 7% of my money in bonds, but the percentage is on the rise.

Apparently I am not alone in my rush toward bond funds. According to the latest issue of Money magazine (the article is not yet online on their website), there is a current feeding frenzy as investors turn to the safety of bonds.

But Money magazine is sounding the alarm that the 30 year bull market in bonds may well be coming to an end, just at the point that people like me are buying them.

So where does that leave Grace?

Since I'm within 10 years of retirement, and have only 7% of my holdings in bonds, clearly I need to continue buying them. But I'm paying high prices for funds that are likely to go lower in the near future.

One solution is apparently to stick with short-term to intermediate-term bond funds or to look at riskier funds that invest in floating-rate bank loans or municipal bonds.

My real problem is that I don't understand the markets well enough to know exactly what I'm doing. I seem to be 'following the crowd' which is almost always the wrong thing to do when it comes to investing.

I'm going to keep reading and trying to find my way through this morass.

In the meantime, no matter what a couple of my readers say, I am NOT going to be seduced by gold--so far nothing I've read persuades me that those investments are good for the long term.