Archives for July 2026

Is a Total Bond Fund Still an Acceptable Core Bond Holding?

A reader writes in, asking:

“I have question about your VT + TIPS choice. Will you maintain that two fund portfolio throughout your life? Was wondering if your choice reflects a personal judgement about holding BND in a portfolio. BND has certainly not been a stellar performer for several years. Makes me wonder if going with TIPS only for the non-stock portion of our portfolio is also the right choice for us. Currently looking at a 50/50 BND/TIPS for fixed income as I start retirement next year, but your choice is making me doubt the wisdom of that approach.”

Bonds can perform two separate roles in a portfolio. In our household, we’re using them in a way that only individual TIPS held to maturity is really the right fit. But if they are being used as basically “the thing that’s less volatile than stocks, which will be rebalanced with the stock part of the portfolio” there are tons of options that would be fine. This article has more on that:

What’s the Point of Bonds in a Portfolio? (And Why Individual TIPS, Held to Maturity, Are Unique)

Personally I have no significant qualms about a “total bond market” fund such as BND in that second role. Its performance in recent years is not anything strange or alarming. That’s just what happens when interest rates go up. And they went up, by a lot, from 2021-2022 (especially in 2022). If you find the fund on Vanguard, click to the performance section, then click the tab for “annually,” you’ll see the year-by-year returns. It’s really just those two years (especially 2022 with a -13.15% total return by NAV) that makes all of the performance figures look bad — and it’ll be that way until those years fall out of the various calculations. (Note that the fund’s 3-year performance is much better than 5-year performance for exactly this reason.)

And again, it’s not as if the fund did anything wrong over the 2021-2022 period. BND has an average duration of 5.8 years. That means that for every percentage point change in interest rates for bonds similar to those in the portfolio, the fund’s price should move in the opposite direction by about 5.8%. From the beginning of 2021 to the end of 2022, yields on 7-year Treasury bonds went from 0.64% to 3.96%, an increase of 3.32%. Multiplied by an average duration of 5.8, we’d expect a price decline of about 19% over the period, offset somewhat by the fund collecting some interest over those two years. (Also note that the fund holds corporate bonds as well as government-backed bonds, so the change in yield was a bit different than we see here.)

Essentially, any intermediate-term bond fund (and especially long-term bond funds) had a terrible year in 2022. That’s just the math of what happens when yields go up. For instance:

Vanguard Intermediate-Term Treasury ETF was down by 10.67% in 2022.
Vanguard Inflation-Protected Securities Fund was down by 11.85%.
Vanguard Intermediate-Term Investment-Grade Fund was down by 13.78%.

The flip side of course is that all of those funds look much more attractive now, with their higher yields.

In our specific household, we aren’t using bonds as “a thing to rebalance with stocks.” Rather, we’re just planning to hold the bonds until they mature, then spend the money. So we want individual TIPS for that. And with long-term TIPS yields well over 2% (very close to 3% in fact), we’re very happy to have the bond part of our portfolio earn inflation plus 2.X% for the next 20-30 years — especially given that for most of our careers, TIPS yields were practically zero and at some times even negative.

July 27, 2026

Financial Planning Roundup: Help Wanted (Technical Editor)

I find myself coming back to the FBI’s cybercrime stats over and over, because they’re just mind-blowing. Over the last decade (2015-2025), annual losses to cybercrime for people age 60+ grew by an annualized rate of 39%.

For comparison, NVIDIA’s annual revenue also grew by 39% annualized from 2015-2025. And over that time NVIDIA went from being a company most people hadn’t heard of to being the largest or second largest company in the world. (It’s a tight race with Apple at the moment.)

So it’s safe to say that cybercrime is a growth industry in the US right now. (It has been growing rapidly with victims under age 60 as well, just not as rapidly.)

I’ve been writing about the topic here on the blog this year, corresponding with readers, and discussing the topic with clients. (I also picked up a few cybersecurity-related certifications along the way, so that I could speak and write about it more intelligently.)

And after learning more about it and discussing it with so many people, I’m pretty firmly convinced that cybersecurity should be considered another core area of personal finance — no different from insurance planning, for instance. To spend decades working, saving, and investing, only to then leave the proverbial doors wide open to would-be thieves makes no sense. (And, just like with dangerous gaps in insurance coverage, most people with dangerous cybersecurity gaps aren’t doing it intentionally.)

Within the personal finance realm though, most of what you’ll see written about cybersecurity and fraud prevention is essentially a) telling the reader to freeze their credit and b) descriptions of types of scams. To be clear, it is a good idea to freeze your credit. And it is valuable to be aware of the common types of scams. But the reality is that “don’t fall for scams” is not a sufficient cybersecurity policy. A policy that relies on always getting it right, every time, your whole life, is simply not good enough.

To that end, I’ve been working on a book (current working title: A CPA’s Guide to Cybersecurity: How to (Hopefully) Not Get Hacked or Lose Your Financial Accounts to Fraud).

It’s not finished yet, but it’s getting closer and closer. It’s at the stage where I could use the assistance of somebody who works in cybersecurity, who could serve as technical editor. If that’s something you’d be open to doing, please get in touch.

Update: thank you to everybody who got in touch! I have found multiple people to provide their expertise as technical editors.

SpaceX, Mega-IPOs, and Efficient Markets

A reader writes, asking

“With Spacex’s recent IPO and other upcoming IPOs and the changes that the index fund providers are making, would it be more advantageous right now (until at least things calm down a bit) to mix my own choice of domestic/international funds versus going with a ‘pre-mixed’ blend fund like VT, target date, or something like AOA?”

It’s always the case that if you have a prediction that you think is better than the market’s collective prediction — and you turn out to be right — then doing something other than a boring market-weighted index fund would have given you better results. The challenge of course is somehow managing, on your own, to know better than the market’s collective knowledge.

My prior article, “Why Stock Prices Are Still Volatile in an Efficient Market,” is applicable here. Here’s the relevant part, edited for brevity:

The idea of an efficient stock market isn’t that the stock market can predict the future. Nobody knows what is ultimately going to happen with any given stock.
That is, the market price for a stock doesn’t mean that this is where the price will stay; it’s simply the consensus best estimate, given the information that is currently available.
By way of analogy, imagine that I’m hosting a raffle, in which the winner gets $100. I’m going to sell exactly 100 tickets to the raffle. How much is each ticket worth?
Each ticket is worth $1, because each ticket has a 1% chance of winning $100.
Of course, the reality is that, of the 100 tickets, 99 of them will turn out to be completely worthless, and one lucky ticket will turn out to be worth $100. But we don’t know in advance which ticket will be the lucky one, so until the raffle actually happens, each ticket is worth $1.
The point of the efficient market concept isn’t that an efficient market would successfully predict which raffle ticket will be the winning ticket. Rather, the point is that an efficient market would successfully price each ticket at $1 prior to the raffle.

With regard to SpaceX’s market price, it’s a similar concept. Everybody knows that the current price is not the ultimate “right” price. But the challenge is that there’s a pretty good chance the company will turn out to never be profitable and thus the shares will ultimately be worthless or nearly so. And then there’s also a small chance that it will someday be wildly profitable, possibly even the most profitable company in the world. So the current market price is the market’s attempt to probability-weight those two potential outcomes (as well as potential outcomes in between).

And of course nobody really knows the percentage probabilities of any of those outcomes, nor does anybody have a good way of calculating how profitable the company would be in the best scenarios. So there’s a lot of guesswork going on here. But:

“A lot of guesswork going on here” is something that is true for a lot of stocks, a lot of the time, and
It is, at least, the collective guesswork of the market, which is probably better than my own guesswork anyway.

July 13, 2026

Financial Planning Roundup: “Ultraprocessed Content”

This week I encountered an article (from March) by Cal Newport (author of Deep Work) on the topic of smartphones, social media, and their effect on attention spans and mental health. The very short summary is that we have enough research on the topic at this point to be able to confidently say, “it’s bad for you.”

Newport writes, “We should consider taking as strong a stance against ultraprocessed content as we already do against ultraprocessed food. Which is to say: Most people should avoid these diversions most of the time. In the same way that you’re unlikely to eat Twinkies as a regular snack or still believe that Pop-Tarts provide a balanced breakfast, stop consuming ultraprocessed content. ”

There’s a Good Reason You Can’t Concentrate from Cal Newport (It’s a paywalled New York Times article. This is a gift link which will let some of you view it, but those seem to stop working in relatively short order.)

For anybody for whom that link does not work or for anybody interested in reading further, here’s one of the papers he references, which I found worth reading:

The Mere Presence of a Smartphone Reduces Basal Attentional Performance from Jeanette Skowronek, Andreas Seifert, and Sven Lindberg

Archives for July 2026

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Is a Total Bond Fund Still an Acceptable Core Bond Holding?

Financial Planning Roundup: Help Wanted (Technical Editor)

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SpaceX, Mega-IPOs, and Efficient Markets

Financial Planning Roundup: “Ultraprocessed Content”

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