Short or Intermediate Term Treasurey?

[question everything]

I continue to contribute to my IRA but am limiting myself to Money Market and Treasuries - I have both funds. So far, it seems that Short Term is doing better. Any suggestions?

[A HERETIC I AM]

1. The short term fund is doing better because yields are so low....

and since yield and price are inverse, the share price of any fund holding shorter term paper has seen its price rise because the price of the securities held in the fund have gone up. The downside is the yield is well down.

If interest rates start to rise, the share price of such funds will suffer, so be vigilant.

Here is a typical short term Treasury Bond fund;

http://www.marketwatch.com/tools/quotes/intchart.asp?symb=VFISX&sid=8140&intflavor=advanced&time=12&freq=1

Share price has risen because the demand for the type of paper they hold in that fund has risen dramatically. As fear of the markets eases and appetite for higher yields returns, funds like this are likely to drop.

The yields on Money Market funds are down for exactly the same reason.

[question everything]

2. Thanks. As we are getting closer to retirement I am forcing

myself to be closer to the 50/50. In the summer of 2007 with one of my IRA (a former 401K) I was 90% stock. I switched to closer to 70/30 or 60/40 and for a while watched with chagrin as the market continued to rise. But since then, I was so glad that I sold "hight" and moved funds to bonds and money market funds so the "blood both" sent us "only" to 2004 instead to 1997.

As you, or perhaps someone else, commented: one has to preserve return of capital, not on capital..