A. With stocks look like to take a downturn, it is natural to move some gains into bonds. However, with interest rates are rising, bond prices will go down which will hurt bond investors' returns. There are 3 options to consider if you want to add bonds to your portfolio -
1. Short-duration treasuries
Shorter-dated treasuries may yield less interest than longer-term ones, but they will be safer when inflation rises. Vanguard Short-Term Treasury (VFISX) is a low-cost fund in this category.
2. Emerging market bonds
They tend to have higher yields which could help make up for the volatility of their prices. Goldman Sachs Emerging Markets Debt Fund (GSDIX) is a popular option.
3. Municipal bonds
If you live in a high tax state, municipal bonds are good considerations because they are less sensitive to fluctuations in interest rates, and their interests are partly tax-exempt.