I am not talking about reinvesting dividends. In my case, the available bond fund in my 401(k) is a collective investment trust, so the only change would be in the NAV. I am saying I won't add another penny to the existing amount in the 401(k) so it is easier to simply look at the amount in the fund and know whether I got back to my starting principal or not.Note that by not reinvesting, the math changes. It’s possible that you are going to be reinvesting your coupon payments into TIPS or I bonds or bills at lower rates than you would have gotten at BND, so you’re possibly making it harder to recover from your NAV loss
Lessons learned:
2) Wait out 6 to 7 years, bond pundits are saying that the bond math dictates I will regain my principal by then. So, doing a live experiment: Not selling that Total Bond until 2030, all future bond investments into I bonds and individual Treasury Bills and Notes at TreasuryDirect.gov
For my future investments, I buy $10k in I bonds and $30.5k in equities in 401(k) and $8k in Roth IRA. Perhaps another $5k in T bills at Treasury Direct. $15k in bonds over $53k total investment per year gets me darn close to the 70:30 target AA. No more Total Bond.
I assume this may be in response to the OP, who another poster said may not have reinvested dividends. If so, OP said there might have been a math problem, either by his IRA custodian or by himself. I put out the above, just in case it is directed at me. I am following all the "rules" yet remain skeptical about how long it would take to regain parity.
Statistics: Posted by lakpr — Sat Jan 27, 2024 11:53 pm — Replies 21 — Views 1073