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I want to invest 10% of my portfolio into bonds. The other 90% will go into stock. I took a look at Government Bonds which TD Ameritrade offers at a $5000.00 minimum. This is a little over my budget. I am also considering low cost bond funds such as VUSTX/VBISX. The returns on these bond funds are historically beating the market. However, the return appears to be based on interest rates which the government has announced should be going up in the short term. I could hold onto cash, buy short term, buy long term...I am having difficulty deciding.
With the belief that interest rates are rising in the short term should I just hold onto cash until April 2015 (I think rates will be up by then)?