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Subject:  Re: Building Bond Portfolios Date:  11/9/2002  5:34 PM
Author:  nnn12345 Number:  5148 of 36308

Nice post Charlie--

I would suggest however that if you are trying to max your returns as well as create safety via creating a portfolio of bonds you may not need any bonds rated AAA in the portfolio.

Why is this?? Because you mitigate your risk as you increase the number of bonds held in the portfolio. If the risk of default is as low as .1% for A rated bonds over a 5 year period then you will do better by simply spreading out your bond purchses amongst many issuers rated A and getting the yield boost.

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