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Retirement Discussions / Retirement-Soon or Done


Subject:  Re: "Done" Date:  8/1/1999  3:08 PM
Author:  intercst Number:  23 of 176

I prefer bank CDs or US Treasury notes purchased from Treasury Direct to bond mutual funds for the fixed income portion of my portfolio. Even the expense ratio from a low-fee provider like Vanguard (0.28%) represents a good portion of today's yields, so keeping expenses low (or non-existent) is very important.

Also, if you hold a CD or US Treasury security to maturity, you're guaranteed to get your principal back. There is no such gauranty with a bond mutual fund. It is possible to lose money with even a US Treasury bond fund. (Even if bond prices remain the same, you'll be out the fund's expense ratio.)

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