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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35392  
Subject: Re: Building a Starter Bond Portfolio Date: 7/25/2009 12:39 PM
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AM:
<iWow. Are you saying that you have never heard of a bond fund?

Of course I've heard of bond funds. I use three indexed bond ETFs for my fixed income portfolio.

My fixed income port:
40% BND (US bonds in US$)
40% BWX (non-US bonds, developed countries, non-US$)
20% PCY (non-US bonds, emer mks countries, non-US$)

When I suggested this strategy to a beginner on this board, Charlie (junkman) chewed my head off.

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No one should chew your head off.
Everyone has different needs and different reasons for how they invest and what they invest in.

Bond funds have many advantages over individual bonds.
They also have disadvantages. You just have to figure out what is most important to you.

I, personally, currently own 5 different bond funds.
It's not only the lazy person's way to invest in bonds -- it's the non-bond-expert's way of doing it. If you don't know what you are doing -- and I mean REALLY know what you are doing -- it's always best to leave the doing of whatever it is to the experts.

Since I don't know what I'm doing, I leave it to the experts. Some people really get a lot of enjoyment out of studying up on this kind of stuff. My eyes glaze over. What should be straightforward and simple, isn't. When anything gets complicated, grab tightly to your wallet.

I like the simplicity of bond funds. If, for whatever reason, I want out - I'm out. Immediately (well...at the end of the day). If one batch of bonds is not performing as I would like - pow! I move all my money to a different fund.

But since you have heard of bond funds...I'm wondering why you asked about a lazy way to invest in bonds. How much lazier could you get than using my method? ;o)

AM
...oh yes! I think ETFs are too volatile -- that's why I (mostly) avoid them.

Disclaimer: I am SO not an expert wrt bonds that you should take anything I say about them with a very suspicious eye. ;o)
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