Both work but serve different purpose, probably a mix of both, heavier on the short duration. Short term bonds/money market funds provide safety and are "cash-like", but do not have any price appreciation when bond yields go down during the recession.
When we expect bond yields to fall, we can speculate on the price of the bond (inherently riskier). Longer duration bond prices have greater price appreciation/volatility (30yr>10yr>1yr etc). Yields down/fed cutting=bond price goes higher, 30yr will go up the most.
Ex: in 2008 the market went down ~40% that year, long term bonds (TLT) went up 37%(+3-4% yield), 1-3mo bonds don't really appreciate in price, but you are guaranteed your ~3-4% return.
So if we go into recession and stocks begin to crash, is it better to move the money into short or long term bonds?
Both work but serve different purpose, probably a mix of both, heavier on the short duration. Short term bonds/money market funds provide safety and are "cash-like", but do not have any price appreciation when bond yields go down during the recession.
When we expect bond yields to fall, we can speculate on the price of the bond (inherently riskier). Longer duration bond prices have greater price appreciation/volatility (30yr>10yr>1yr etc). Yields down/fed cutting=bond price goes higher, 30yr will go up the most.
Ex: in 2008 the market went down ~40% that year, long term bonds (TLT) went up 37%(+3-4% yield), 1-3mo bonds don't really appreciate in price, but you are guaranteed your ~3-4% return.