Your bond fund strategy, in 30 words

The complete guide to bond index funds for retirement in just 30 words:

• Age <50: Treasury bonds for diversification [e.g. SPDR Portfolio Long Term Treasury ETF (SPTL)]
• Age 50 to 70: add TIPS for inflation risk [e.g. DFA LTIP Portfolio (DRXIX)]
• Age > 70: add short-term bonds to lower volatility [e.g. iShares Core 1-5 Year USD Bond ETF (ISTB)]

That’s it: if you know nothing else about the role of bonds in a portfolio then those three guidelines will help you execute a bond strategy that works.

Of course keeping costs low by using fixed income index funds is hugely important, as is avoiding the behavioral mistake of chasing recent high performers.

Bottom line? If you’re a long-term investor then you should pick a long-term bond index fund with low costs. Stay the course, no matter what market pundits are telling you, and you’ll be ahead of the game.