Investing in bonds – Question for investing gurus

[newbiz]

I would like to park my free money, most of which I intend to eventually use to buy a home for cash sometime in the near future. I have been holding on to this money for almost 5 years with little or no return on it. So I might hold it for another 5 waiting for RE prices to correct.

I have met with two financial advisors, one of whom suggested a intermediatry bond portfolio and the other one screamed bloody murder when I mentioned Intermediatry bonds. (around 5 year maturity)

What do the investment gurus on the board think?, Short term – 1 to 2 years or Intermediatary – 5 years?

Do you see any other places to put the money in. Principal conservation being the most important factors.

[DataAgent]

Please consider a bond ETF. Here are 3 for you to research:
AGG – currently paying 3.6%
LQD – currently paying 5.1%
JNK – currently paying 10.8%

I’ve owned JNK for several years. It has a great track record even in down markets.

[DataAgent]

Please consider a bond ETF. Here are 3 for you to research:
AGG – currently paying 3.6%
LQD – currently paying 5.1%
JNK – currently paying 10.8%

I’ve owned JNK for several years. It has a great track record even in down markets.

[DataAgent]

Please consider a bond ETF. Here are 3 for you to research:
AGG – currently paying 3.6%
LQD – currently paying 5.1%
JNK – currently paying 10.8%

I’ve owned JNK for several years. It has a great track record even in down markets.

[DataAgent]

Please consider a bond ETF. Here are 3 for you to research:
AGG – currently paying 3.6%
LQD – currently paying 5.1%
JNK – currently paying 10.8%

I’ve owned JNK for several years. It has a great track record even in down markets.

[DataAgent]

Please consider a bond ETF. Here are 3 for you to research:
AGG – currently paying 3.6%
LQD – currently paying 5.1%
JNK – currently paying 10.8%

I’ve owned JNK for several years. It has a great track record even in down markets.

[permabear]

[quote=newbiz]I have met with two financial advisors, one of whom suggested a intermediatry bond portfolio and the other one screamed bloody murder when I mentioned Intermediatry bonds. (around 5 year maturity)[/quote]

What did the “bloody murder” guy offer as an alternative? He may be the smarter of the two, depending on what he said.

There is some evidence that the debt bubble has moved from housing to the bond market. Bond funds are NOT a sure thing – it is possible to lose lots of money in a bond fund. This happened in the 70’s when inflation hit, and bond funds lost 30-40%. As interest rates rise, lower interest bonds lose their premiums, so the usual techniques that bond funds use (rolling over bonds into newer issues) results in loss of principal.

http://www.fool.com/retirement/general/2010/04/27/dont-let-your-bond-fund-bite-you.aspx

I would be as careful investing in a bond fund as a mutual fund. Make sure you understand interest rate risk.

http://www.sec.gov/answers/bondfunds.htm

“Because of this type of risk, you can lose money in a bond fund, including those that invest only in insured bonds or U.S. Government bonds.”

[permabear]

[quote=newbiz]I have met with two financial advisors, one of whom suggested a intermediatry bond portfolio and the other one screamed bloody murder when I mentioned Intermediatry bonds. (around 5 year maturity)[/quote]

What did the “bloody murder” guy offer as an alternative? He may be the smarter of the two, depending on what he said.

There is some evidence that the debt bubble has moved from housing to the bond market. Bond funds are NOT a sure thing – it is possible to lose lots of money in a bond fund. This happened in the 70’s when inflation hit, and bond funds lost 30-40%. As interest rates rise, lower interest bonds lose their premiums, so the usual techniques that bond funds use (rolling over bonds into newer issues) results in loss of principal.

http://www.fool.com/retirement/general/2010/04/27/dont-let-your-bond-fund-bite-you.aspx

I would be as careful investing in a bond fund as a mutual fund. Make sure you understand interest rate risk.

http://www.sec.gov/answers/bondfunds.htm

“Because of this type of risk, you can lose money in a bond fund, including those that invest only in insured bonds or U.S. Government bonds.”

[permabear]

[quote=newbiz]I have met with two financial advisors, one of whom suggested a intermediatry bond portfolio and the other one screamed bloody murder when I mentioned Intermediatry bonds. (around 5 year maturity)[/quote]

What did the “bloody murder” guy offer as an alternative? He may be the smarter of the two, depending on what he said.

There is some evidence that the debt bubble has moved from housing to the bond market. Bond funds are NOT a sure thing – it is possible to lose lots of money in a bond fund. This happened in the 70’s when inflation hit, and bond funds lost 30-40%. As interest rates rise, lower interest bonds lose their premiums, so the usual techniques that bond funds use (rolling over bonds into newer issues) results in loss of principal.

http://www.fool.com/retirement/general/2010/04/27/dont-let-your-bond-fund-bite-you.aspx

I would be as careful investing in a bond fund as a mutual fund. Make sure you understand interest rate risk.

http://www.sec.gov/answers/bondfunds.htm

“Because of this type of risk, you can lose money in a bond fund, including those that invest only in insured bonds or U.S. Government bonds.”

[permabear]

[quote=newbiz]I have met with two financial advisors, one of whom suggested a intermediatry bond portfolio and the other one screamed bloody murder when I mentioned Intermediatry bonds. (around 5 year maturity)[/quote]

What did the “bloody murder” guy offer as an alternative? He may be the smarter of the two, depending on what he said.

There is some evidence that the debt bubble has moved from housing to the bond market. Bond funds are NOT a sure thing – it is possible to lose lots of money in a bond fund. This happened in the 70’s when inflation hit, and bond funds lost 30-40%. As interest rates rise, lower interest bonds lose their premiums, so the usual techniques that bond funds use (rolling over bonds into newer issues) results in loss of principal.

http://www.fool.com/retirement/general/2010/04/27/dont-let-your-bond-fund-bite-you.aspx

I would be as careful investing in a bond fund as a mutual fund. Make sure you understand interest rate risk.

http://www.sec.gov/answers/bondfunds.htm

“Because of this type of risk, you can lose money in a bond fund, including those that invest only in insured bonds or U.S. Government bonds.”

[permabear]

[quote=newbiz]I have met with two financial advisors, one of whom suggested a intermediatry bond portfolio and the other one screamed bloody murder when I mentioned Intermediatry bonds. (around 5 year maturity)[/quote]

What did the “bloody murder” guy offer as an alternative? He may be the smarter of the two, depending on what he said.

There is some evidence that the debt bubble has moved from housing to the bond market. Bond funds are NOT a sure thing – it is possible to lose lots of money in a bond fund. This happened in the 70’s when inflation hit, and bond funds lost 30-40%. As interest rates rise, lower interest bonds lose their premiums, so the usual techniques that bond funds use (rolling over bonds into newer issues) results in loss of principal.

http://www.fool.com/retirement/general/2010/04/27/dont-let-your-bond-fund-bite-you.aspx

I would be as careful investing in a bond fund as a mutual fund. Make sure you understand interest rate risk.

http://www.sec.gov/answers/bondfunds.htm

“Because of this type of risk, you can lose money in a bond fund, including those that invest only in insured bonds or U.S. Government bonds.”

[EconProf]

If preservation of capital is primary to you, I’d stay away from bonds and bond funds. They look good only on their recent performance, which is enhanced by the unprecedented lowering of interest rates in recent years. If that trend reverses, or merely stops, bond returns go negative or at best flatten out at low levels.

[EconProf]

If preservation of capital is primary to you, I’d stay away from bonds and bond funds. They look good only on their recent performance, which is enhanced by the unprecedented lowering of interest rates in recent years. If that trend reverses, or merely stops, bond returns go negative or at best flatten out at low levels.

[EconProf]

If preservation of capital is primary to you, I’d stay away from bonds and bond funds. They look good only on their recent performance, which is enhanced by the unprecedented lowering of interest rates in recent years. If that trend reverses, or merely stops, bond returns go negative or at best flatten out at low levels.

[EconProf]

If preservation of capital is primary to you, I’d stay away from bonds and bond funds. They look good only on their recent performance, which is enhanced by the unprecedented lowering of interest rates in recent years. If that trend reverses, or merely stops, bond returns go negative or at best flatten out at low levels.

[Author]

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