High Yield Corp Bond funds?

[tan fish]

Hi all. Its that time of year again and I'm looking at rebalancing my retirement accounts. Currently, I'm balanced quite conservative generally, with most of my holdings in a target date fund with fidelity. Other than that, all my other holdings are equity funds. Does anyone here hold high yield corporate bond funds (i.e. junk) in an aggressive position? I'm looking at a couple of fidelity funds, SPHIX and FAGIX, and they have had a very high div yield recently (5%+). Does anyone recommend these, and if so, at what position in your retirement portfolio (i.e. 10%? 25%? more?). I'm only 39 and thus have a while until retirement, so these dividend yielding funds are attractive to me.

[disneysteve]

Currently, I'm balanced quite conservative generally, with most of my holdings in a target date fund

I'm only 39

I'm confused by this statement. You say you are invested "quite conservative" but are 39 and mostly in a target fund and other equity funds. Vanguard's 2035 fund is currently 88% stock. If you have additional stock holdings, your portfolio is probably over 90% equity. Why are you considering that conservative?

Generally, dividends come into play closer to and in retirement when income becomes more important than growth. At 39, I would still be mainly focused on growth.

[jpg7n16]

I agree that you seem inconsistent with what you're asking for. You say conservatively balanced (conserative to moderate), but ask for an aggressive high yield bond play (super aggressive). Then say it looks good because of the dividend (conservative income seeking strategy). And ask what % of your portfolio it should be (asset allocation modeling).

You're kind of all over the place with what you're trying to do.


What is the purpose of adding it to your portfolio? In other words, how would your portfolio benefit by adding one/both of these funds?

What strategy do you have for your portfolio?

[tan fish]

I agree that you seem inconsistent with what you're asking for. You say conservatively balanced (conserative to moderate), but ask for an aggressive high yield bond play (super aggressive). Then say it looks good because of the dividend (conservative income seeking strategy). And ask what % of your portfolio it should be (asset allocation modeling).

You're kind of all over the place with what you're trying to do.


What is the purpose of adding it to your portfolio? In other words, how would your portfolio benefit by adding one/both of these funds?

What strategy do you have for your portfolio?

Thanks. Yes you are right, adding a junk bond fund would be something I haven't done before, but I am attracted to the consistent income to partially offset what could potentially be another volatile year for equities. I'm never going to bail out of my target date fund, which has the majority of my retirement $ in it, but I like the idea of having a bond fund that would generate consistent income. I'm just not sure if its the right play at all.