Buying Bonds, is now the time...?

Ciprico

I had most of my pension is VLS80 funds until about a 18 months ago, when it seemed bonds were going nowhere, so I sold VLS and bought HMWO but kept about 25% as cash, ie I roughly removed the bond element.

It seems now may be the right time to reverse this (?) and am contemplating buying bonds, but apart from the integrated bonds in VLS80 I have never bought bonds.

I am conscious of having a lot of cash being eroded by inflation in the pension. 

I was wondering what the MSE community thought about something like one of the Vanguard Bond funds as a safe haven that has some return.

I am 59 and on the cusp of retiring, so looking for low risk, this money is my 5 year spending buffer... (about £200k)

Frequentlyhere

If your alternative to bonds is cash earning zero in a pension (?), then bonds probably make sense. The YTM of the Vanguard global bond fund (VAGP)  is about 3%, but obvs can be volatile in the short term.

 This all really depends though - you've said you're retiring shortly, so you could just wait it out and stick it in a 3% fixed rate saver instead and achieve much the same return but in a more stable way.

Either way, neither bonds nor cash is a safe haven from inflation at present. Nor stocks, gold or crypto come to that!

adindas

Ciprico said:

I had most of my pension is VLS80 funds until about a 18 months ago, when it seemed bonds were going nowhere, so I sold VLS and bought HMWO but kept about 25% as cash, ie I roughly removed the bond element.

It seems now may be the right time to reverse this (?) and am contemplating buying bonds, but apart from the integrated bonds in VLS80 I have never bought bonds.

I am conscious of having a lot of cash being eroded by inflation in the pension. 

I was wondering what the MSE community thought about something like one of the Vanguard Bond funds as a safe haven that has some return.

I am 59 and on the cusp of retiring, so looking for low risk, this money is my 5 year spending buffer... (about £200k)

I am using the same example form "frequentlyhere" (e.g VAGP) it is not like for like about 20% of your VLS 80/20 are doing. But at least it will help to see whether investing in Bond is a better alternative than you put your cash into saving account one year fixed for 3.2%.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

There is an option to be more flexible e.g easy access saving account combined with in RSA. A few RSA are even paying 5% interest.

Each to their own opinion, but I myself have never interested in investing in Bonds. From the beginning I have chosen VLS100% equity, despite the most popular one frequently suggested are VLS 60/40, 80/20. Acute investors like Warren Buffet, Peter Lynch dislike Bonds

For individual investors there is alternative to bond, e.g put it into high interest easy access saving accounts, or RSA accounts or the like. Also you are in full control when you want to throw it into equity.

Bond is not like growth stocks which could move 100% in just a few months, bond is like tortoise, it takes time to move.

Ciprico

The cash is in a pension so limited/none fixed interest options