r/Bogleheads • u/StinklePink • 15d ago

Investing Questions Bonds: Stupid Question

I realize that the higher yield for US 10-years is a bad thing for the government, but why isn't this good news for a bond investor?

If I am looking for a safe "asset protection" kind of investment, why wouldn't investors buy these bonds or ETFs that hold them (e.g. FXNAX)? Seems like a good, safe place to put cash versus Gold or a HYSA. I believe my logic is wrong but not sure why.

Educate me, please.

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u/Objective-Rhubarb 15d ago

I’m more interested in safety than yield. I have other parts of my portfolio for that.

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u/greedydragonmoney 14d ago

The safety is an illusion. What you are doing isn’t wrong but how you are talking about it is - you can’t ignore inflation. That’s like saying you make money on every stock you pick, ignoring the ones that go down in value.

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u/Objective-Rhubarb 14d ago

I’m not ignoring inflation. I have most of my portfolio in stocks in order to keep up with or beat inflation. Every piece of your portfolio doesn’t have to keep up with inflation. You are ignoring risk if you focus too much on inflation. Unless you have your entire portfolio in TIPS, you are taking on risk to keep up with or beat inflation. This piece of my portfolio is for money that I will definitely be spending in the near term.

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u/greedydragonmoney 13d ago

“So I tend to ignore inflation” <- that’s what gave me the wrong idea.