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Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Maximizing Your Bond Returns||Date: 10/1/2012 1:35 PM|
|Author: trader2012||Number: 34425 of 35930|
There’s a really bad video being hosted on Yahoo Finance’s Breakout in which Jeff Macke interviews Larry Swedroe who is supposedly giving viewers “some tips and words for the wise [sic] on how to maximize their bond investments”. http://finance.yahoo.com/blogs/breakout/3-ways-maximize-bond... Swedroe attempts to make three points.
(1) Understand your fees.
(2) Use Mutual funds or ETFs.
(3) Be Conservative.
His first point is merely a very outdated rant against “markups” and worth no further consideration, because anyone who pays an avoidable markup is an idiot who deserves to be fleeced, though I'll freely admit that not all markups are avoidable, such as us odd-lotters constantly must endure for being forced to bid up in the book to obtain our sizes, and I’ll get back to this business of “fees” in a moment.
His second point follows from the first. He argues that ” Rather than going out and buying one bond or another [investors should be] using bond ETFs or mutual funds. The "funds-versus-individual- bonds" argument isn’t an “either-or-thing”. As has already