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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 35400  
Subject: Re: Risks w/ municipal bonds? Date: 5/20/2009 5:36 PM
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AM,

Sounds like you are suggesting I keep hundreds of thousands of dollars in a money market at less than 1/2 of 1%.

I don't mean to be absolute in suggesting this. I want you to be aware of your options and current conditions. I want you to be aware of the risks before you step out. I don't know how closely you monitor your positions and trades.

What, exactly, would stop me from bailing on the GNMA fund any day it struck my fancy to do so? Or any bond fund, for that matter. On any given day I can be out of bonds and into stocks with a few clicks of my mouse button.

There is nothing keeping you from doing this. The idea, in of itself, is not a horrible one as long as you are going in with eyes open. ETFs make better vehicles for this kind of approach. More traditional funds occasionally have weird restrictions to keep people from trading them.

Do you think the bond market is really that unsafe?

In the past the bond market tends to unwind relatively slowly. This time there is unprecedented money stashed in bonds and other debt. I don't know how fast it will move. Which is why I suggested you back of napkin how long you think you may be in these funds. If you don't plan on being in them vary long your benefit would be pretty limited.

jack




Thanks, Jack.
I can't say this helps me know what to do right now though.
I feel like I'm between a rock and a hard place with this.
There has to be someplace to put all that money.
Maybe I'll just wait a while... but I surely do feel pretty foolish (little 'f') letting it sit in the money market.
O well...
Thanks just the same.
I think on it some more.

AM
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