Ode to the G fund (DH blog post)
This song was created to recall the advantages of the G Fund, namely that it has no interest rate risk, nor credit risk, nor (historically at least) interest rate risk. It mixes very well with stocks—but doesn’t have stock like returns (as it’s not a stock—so I wouldn’t have only the G Fund in a portfolio).
It is to be sung to the tune of “You Are My Sunshine” and it’s meant to be performed in the key of G. 🙂
You are the G Fund, my only G Fund.
You make me happy when skies are gray.
You’ll never know, Dear, how much I love you.
So don’t take my G Fund away.
The other day dear, rates were a rising.
And all bond values to be small.
Then I remembered, duration is only 1 day,
So I’d have no losses at all.
A few months later, a recession hit us
And companies could not pay their loans.
Investment grade bonds took heavy losses
But my G Fund went down not at all.
A bit time later inflation crept up
Threatening to destroy bonds.
Then I recalled G Fund rises with inflation.
And I kissed my sweet and I smiled.
After the downturn, stocks were again a rising.
A friend wondered “Why bother with G?”
“The G fund isn’t a stock fund—diversify better.
You might also want stocks somewhere you see.”