bond funds

[Anonymous]

Now that interest rates are going up, which bond funds are OK, or should I avoid them all? Thanks!

[Anonymous]

short term bond funds are "safer" when interest rates are rising.

[Anonymous]

seriously, do not make an investing decision about this based on what someone on the DCUM forum recommends. Do some legitimate research and if you still don't feel comfortable, don't invest your money in bonds or seek professional advice. And, no, that's not what I do for a living. I've just seen my mother throw money into investments she doesn't understand because someone, who didn't know what they were talking about, told her it was a good idea.

[Anonymous]

I bonds if you can stay under the limit. Otherwise short term treasuries. If you're talking 401k options, check and see if your plan offers a stable value fund-often a good choice in a rising rate environment. If you have TSP then G fund is the no-brainer.

[Anonymous]

OP here. I found an article that mentions a useful tool in Morningstar to help evaluate bond funds.

http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2013/07/23/dont-abandon-bonds-just-yet

From the article:

"If you've got access to more than one bond fund in your retirement plan, you might consider diversifying your bond holdings. When comparing bond funds, one important aspect to consider is the duration of each, or the measure of how likely each is to react to changes in interest rates. The lower the duration, the lower the effect interest rate changes are expected to have on the fund’s value. Morningstar clearly shows each bond fund’s average effective duration, if you’d like to compare the average duration of each bond fund in your 401(k) plan."

In the Morningstar profile, look under the "Portfolio" tab under the "Style Details" section. It includes a chart that plots Quality and Interest Rate Sensitivity for each bond fund.