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Subject:  Re: Bonds & Fixed Income Investments: FAQS Date:  12/16/2009  8:27 PM
Author:  TMFGalagan Number:  29500 of 36398

Primary, there are two groups of people who frequent this forum: those who make directional bets on interest-rates, and those who make directional bets on credit-worthiness. Both are gamblers in every meaningful sense of term. How they describe themselves is merely to identify the kind of gambling they are doing.

Hey Charlie -

I see it very differently (as usual!). The two groups I see are (1) those for whom bonds are the predominant if not sole investment in their portfolios, and (2) those for whom bonds are only a piece of a more diverse portfolio.

When you criticize the latter group's bond portfolio, you have blinders on. You're not looking at the rest of our investments. We deal with company-specific risk, tax risk, inflation risk, and a dozen others using other types of securities. We're not naive. We just don't handle the risks the same way you do. And since this is a bond board, it seems off-topic to talk about how we integrate non-bond holdings into an overall portfolio.

Your stories are fascinating to me because you've managed to take a single tool and make it do so many useful things. I prefer using different tools, and I achieve the same ends.

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