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Author: vickifool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35367  
Subject: Re: Bond FAQ - Part 1 Edited Date: 2/13/2006 11:00 AM
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----“Fixed-Income” investing is a misnomer. It's actually a financial strategy in which you put money into investment or savings instruments with the intent of having at least as much buying power (after inflation) from the money when you need to use it as the money had when you put it away, while minimizing the risk of losing the principal. “Principal preserving” is a better term. Income (interest, dividends) is often not, in fact, at a fixed rate.

I really liked this part.

----The income (interest, dividends) from most bonds or other principal preserving (fixed-income) investments are fully taxed at your marginal rate, not at the lower rate for long term capital gains, so when there are no reasons why you need to have access before retiement

minor typo there, under Provisos.

In the "in a nutshell" portion, I'd take the "---" off the first two introductory sentences and leave it on the list of factors to consider. A style change.

We can compare the current risk premium with risk premiums from other times
If you just leave out that part, the rest is clear.

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