The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  http://boards.fool.com/charlie-i-respect-you-deeply-but-im-going-to-24368938.aspx

Subject:  Re: Bond Brokers & Bond Desks Date:  7/20/2006  2:20 PM
Author:  DeltaOne81 Number:  17605 of 35576

Charlie, I respect you deeply, but I'm going to have to call you out on one thing.

You said:
The huge advantage bonds have over stocks is that bonds mature and come earlier in the credit line. It's possible, though not always prudent or profitable in specific cases, to be a Buy-and-Hold investor with bonds that way it would scare me silly to do so for stocks. I've been made whole more than once from a Chapter 11 workout, while the equity guys got zilch.

And then:
Because reward is proportional to risk, all other things being equal. If a bond investor takes on the same risks that a stock investor does, then he earns the same rewards. People mistaken think that bonds are the “safer” vehicle. They aren't. Some bonds are truly safe.


But you had just made an argument as to why bonds are safer... higher in the credit chain, etc. All that *does* make bonds less risky.

Now, sure, if you take some o