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I'm not that familiar with bond investing, my fixed income investing is just limited to investing in bank CDs and letting them mature and then rolling them over.

The question I have is this: if you had $100 million, what kind of return premium could you get assuming the same safety you require now of your investments? Let me explain this a little bit. Assume traditionally you've always invested in CDs because you liked the security and the lack of principal fluctuation from interest rates variations, that means nowadays you could maybe get 5% interest or so, if you had $100 million to invest, could you get 6% interest at that same level of security with CDs? Or perhaps you traditionally invested in corporate bond funds, with $100 million what kind of premium do you think you could get continuing to invest in corporate bond funds, namely because that would be the level of risk you feel profitable with.

I raise these questions because it is conceivable that you could get 100 people each contributing $1 million each to form a union similar to a nonprofit credit union but without executing bank functions (loans, checking accounts, etc..), and using this one hundred million dollar account as leverage for everyone to get higher returns. If you're fortunate enough to have $1 million sitting in a CD generating 5% return, the opportunity to get 6% on a CD may seem attractive. Clearly with only million dollars you may not be able to leverage the extra 20% interest, but if you were part of a group that managed 100 million you may be able to leverage the extra 20% interest at added 0% risk.

Like I said the beginning, I know very little bonds and bond funds so maybe no leverage that can be gained by dealing with such a large amount as $100 million.

Any input would be welcomed.

math999man
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