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URL:  http://boards.fool.com/im-talking-with-a-broker-at-washington-mutual-17283284.aspx

Subject:  Re: Purchasing Bonds Date:  5/29/2002  12:36 AM
Author:  foobar73 Number:  3780 of 35573

I'm talking with a broker at Washington Mutual Financial (recommended by our accountant) about creating a five to seven year bond ladder with over $400 K of my 89-year old mother's money. I'd feel more comfortable buying Vanguard's Total Bond Market Index (VBMFX), Short-Term Bond Index (VBISX), or Intermediate-Term Bond Index (VBIIX), but I'm concerned about buying at a near peak NAV, given the unusually low interest rates.

This is the advantage of buying individual bonds, or ladder of bonds, instead of bond funds. Buying the bonds yourself will ensure that you will not incur losses, regardless of the movement of interest rates, as long as you hold the bonds until maturity (and assuming the bonds do not default). With a bond fund, you lose much of the control, and may take losses when you sell.

Her portfolio, after removing the IRA I inherited, is about