Feb. 1 at 1:25 PM
$DLY $BGT $SCHP $KORP $TLT
Why This is a Good Idea (2026–2031)
Attractive Yields: After significant Fed rate hikes, bond yields are historically high, offering a solid income base, even with some expected rate cuts.
Reduced Volatility: Weekly accumulation (DCA) helps smooth out the purchase price, protecting you from buying exclusively when prices are high.
A five-year horizon fits well with intermediate-term bonds, which offer a balance of better yields than short-term instruments without the extreme price volatility of long-term bonds.
Diversification: Bond funds offer instant diversification, reducing the credit risk of holding individual bonds.
Recommendations for the Next 5 Years
Focus on Quality: Favor high-quality investment-grade corporate or treasury bonds.
Intermediate Duration: Focus on bond funds with an average maturity of 3–8 years to maximize income while limiting interest-rate sensitivity.
Tax Considerations: tax-advantaged account (IRA/401k), consider muni funds