Bonds, Savings Accounts, Money Market FUNDS, etc...

[IdealFugacity]

Hey all. It's been a while since I had to return The Four Pillars of Investing to the library, and I haven't gotten around to ordering it from Amazon yet.

As I skim over my notes from my first read-through, and also simply from stepping back and looking at my current plans for my new post-college income, I realize that I either ignored the book on the topic of bonds, or the book told me things such that I have not recognized an appreciable relative value for them.

I am sold on equities in my portfolio, largely in the form of large-cap domestic, small-cap domestic, and international, in the forms of both blend and value index funds (Vanguard, blends via my employer-sponsored Roth 401k which offers Institutional shares, and value funds via my Roth IRA, also with Vanguard)

For the non-equities portion, to which I have assigned an asset allocation of 30-40% - 40% until I have 6 months expenses built up, 35% until I have a permanent job location when done with 2 years of rotations within my company, and then 30% after that until I begin saving for a home/family/whatever - I am, in the short term, mostly focusing on Vanguard Prime Money Market Fund (Emergency savings account), E*Trade Savings (5.05% APY), and of course my ING Direct checking account (4% APY, only keeping around $4000 in this account at any given time, fluidly moving cash between this and E*Trade to keep the balance in checking from getting too high or low).

Now, with the amount of money I have now and will have for a while (probably at least a year, if not 2-3 or longer!), my emergency fund account will probably make up the vast majority of the 30-40% non-equities portion of my portfolio, and my checking account will also be a non-negligible contributor in this portion as well. But, would it be a serious oversight to not consider bond funds as additional places to stick some money once I have reached this allocation with a fully stocked 6 months emergency expense VMMX account and interest-bearing checking account, and then my net worth begins to expand beyond that point?

If I reached that point this morning, I would have directed further money required to keep the 30-40% non-equities number steady into more shares of VMMXX (with a mental distinction between these shares and the shares devoted to 6 months of emergency expenses) or a high-yield savings account, maybe CDs. Bonds have not crossed my mind very much, and I don't know if that is a bad thing.