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URL:  http://boards.fool.com/am-buying-into-any-fund-at-or-near-its-27691031.aspx

Subject:  Re: Risks w/ municipal bonds? Date:  5/19/2009  6:56 PM
Author:  AngelMay Number:  27529 of 35343

AM,

Buying into any fund at or near its predictable peak is a good way to lose capital. Unlike like holding the individual asset your capital, in a fund, is not protected. If interest rates rise NAV value of your fund will fall, most likely faster than it can easily be recovered.

Best guess, and pick your vehicle, shorter is better than longer right now. Debt is bubble priced, the debt market is getting flooded by US Treasury, Wall St and munis. As soon as the stock market looks like it actually has legs you will almost be able to hear the WHOOOSH as money leaves bonds and seeks higher returns.

Having some cash on hand after the whoosh might be a pretty good place to be. YMMV

jack




I'm slightly confused here.
Are you saying that GNMAs are at their peak?
Or that munis are at their peak?

See...my problem is that the money market isn't paying even 1% these days. So it is foolish to put my money into them as the ones I'm holding come due.

I think it's also foolish at my age (retired) to put a large percentage of my portfolio into stocks.

I have eased back into stocks somewhat -- but the major portion of my portfolio has to go somewhere as these CDs mature.

What do you suggest?

And....not to worry - I have lots of cash on hand.
Also - I would be investing in Vanguard's funds - so I can cash out on any given day and into any other fund I feel like getting into. So while I could lose some, I also stand to gain as well.

Still interested in what you suggest I should do with all this money that is coming in from matured CDs. :)

AM
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