Why I Hate Total Bond Market Index Funds

[yankees60]

Don't know if any of you are invested or have invested in Vanguard's Total Bond Fund. In the past and recently I've given strong thought to investing in it.

But after reading this excellent and highly informative article is it now permanently off my list of future investments.

Vinny



Why I Hate Total Bond Market Index Funds

https://www.whitecoatinvestor.com/total ... 2010787574

Problems with Total Bond Market Fund
Now that we've defined the fund, let's talk about why I don't use it.

#1 TBM Is Not Total
For something that purports to own “everything,” there are an awful lot of bonds that are not included in the fund. Here are some of the omissions:

EE Savings Bonds
I Savings Bonds
TIPS
Junk (High-Yield) Bonds
Municipal Bonds
Foreign Bonds
Private Bonds

It's only a “one-stop shop” if you don't want any of that other stuff. Imagine if a total stock market fund left out REITs, tech stocks, and healthcare stocks. You wouldn't consider it to be very “total,” would you? You don't have to invest in everything, but if you're going to say you do, you actually should.

#2 No Inflation Protection

#3 Takes Risk on the Bond Side

#4 Owns Mortgage Bonds

#5 Bad in Taxable

[dualstow]

I like the White Coat Investor guy and have read his stuff (incuding posts on B’H) on and off probably since ‘07.
I panicked a little because my eyes initially saw total stock market fund.
I hold some corporate bond funds, some regret, and a lot of treasuries. Mostly treasuries.

[yankees60]

I like the White Coat Investor guy and have read his stuff (incuding posts on B’H) on and off probably since ‘07.
I panicked a little because my eyes initially saw total stock market fund.
I hold some corporate bond funds, some regret, and a lot of treasuries. Mostly treasuries.

I've been receiving his emails and been aware of him for quite a while.

However, it is only just recently that I am heavily reading what is at his web site.

Just passed it on to a doctor I used to work with about 15 or so years ago.