No. of Recommendations: 3
...and the individual bonds don't? Under what conditions would the inflation protection be better, and when would a fund be better than individual bonds? We have mostly funds and don't know much about individual bonds. Our goal is to keep our investments as simple as possible.

The only loss in value when you hold individual bonds is if you decide to sell them rather then hold them to maturity.

Also, the loss in value does't apply to savings bonds since there is no market in them.

There was an article posted here in the last several months (I think from the PIMCO site) that discussed the spread between TIPS and treasuries and when that spread indicated TIPS were a better buy.

It seems as a general rule (if there is such a thing here) is that you don't want to be getting into bond funds in a rising rate environment.

Now we have been expecting rising rates here for 2 years now and we have seen none of it. Guessing such things can lead to opportunities missed. If you expect inflation, rates will be going up. If you expect deflation, they will be going down. If you expect stagflations, rates may stay here for 4 years. The time we spend guessing, we miss the current yields.

I expect you will get many responses from this great board. I look forward to it.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.