[Brian]

Any thoughts on which bonds to choose when rebalancing my IRA and Roth IRA? Or something else that is more recession proof?

What are the best bonds for IRA rebalancing, especially in uncertain economic times? With concerns about a potential recession, I’m looking for options that provide stability and resilience.

Are there specific bond types—such as Treasury bonds, TIPS, municipal bonds, or corporate bonds—that are better suited for weathering economic downturns?

Additionally, how do you approach rebalancing your IRA to maintain a strong and diversified portfolio in challenging market conditions?

I’d love to hear your insights and strategies!

[Will]

Bonds tend to rise when stocks sink. If you are withdrawing or plan to be in the next 5-10 years…it helps smooth out the ride.

Imagine pulling money out to live off of when the markets are down 30% in the last 12 months or 50% in the last 24-36 months.

Instead…when markets tank….your bonds tend to go up a little and you live off those.

Government treasuries and TIPS are generally the most inversely related. Could also hold some gold which is generally NOT inversely related BUT has a very low correlation.

So certain events that pull down bonds and stocks (like the 2007/08 financial crisis), gold went up.

Bonds recovered soon after the initial shocks. Then SP500 came back to all time highs around 11/12.

In an event like that….you could have sold some gold the first 6-12 months as that was going up…the moved to bonds or sold more gold (was still going up) to give you as much time as possible for sp500 to return.

I would hold at least a little gold (maybe 20% of your non-equity portfolio). I tend to hold more gold when rates are low like 2020-2023.

Treasury and government bonds are more inversely related to the sp500 than corporate bonds….corporate bonds pay better….. it depends on what the primary job of the bonds is….

consistent payments or to live off of when markets turn.

[Jeff]

Why not just buy actual bonds. They’re available through most brokerages. Then you lock in a rate.

Lat it so your money comes available as you need it.

[Author]

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