I believe that my bond investments might represent dead money. Accordingly, I am selling my bonds and moving those funds to my S&P fund.
- Buy S&P Fund @ $150.6674
- Sell Bond Fund @ $220.0189
This is a deviation from my Asset Allocation policy and my core Investment Policy. It’s worth noting that I failed the last time I tried actively manage my equity to bond ratio, back in the Summer of 2011. I wonder if I will learn the same painful lesson again!
A month after making this trade it seems to be a bad call. The S&P Fund that I bought is down 1.75% while the Bond Fund that I sold is down only 0.56%. That’s a loss of 1.19% on the trade. Given that the bond component of my portfolio had previously been 32.8%, this loss equates to 0.39% of my entire portfolio. Another expensive lesson. I will rebalance my portfolio back to include my customary bond component.