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Retirement Discussions / Retirement-Soon or Done


Subject:  Re: "Done" Date:  8/2/1999  8:48 AM
Author:  rjm1 Number:  24 of 178

Next question: Is there ever a need for bond mutual funds if you do not need the
"somewhat steady income" they provide. Folks keep talking about diversification
being the primary factor of bonds in a portfolio.

The bonds (any fixed income investment) are also for safty. If the market drops and your fixed income does not (or maybe drops less)you should feel better and hopefully ride out the stock market drop.

You might think of fixed income investments as the money you will spend in the next few years and that it will be replenished from the sale of stocks when stocks are up. A mutual fund is not well suited for this. You want securiteis that are maturing at face value. I think your "income" should come mostly from selling stocks. The fixed income investments just hold the proceeds (maybe for several years) from the stock sale until you need to spend the money. By the way, a money market is a fixed income investment.
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