Charlie,I have been reading your contributions to TMFII for the last year and a half and I have learned a lot. I understand the mechanics of bond investing, i.e., ytm, ytc, par value, etc, etc, but I don't have a feel for risk. That's probably because I don't have any experience. Maybe investing in bonds is safer than investing in stocks....barring default, you get your money back plus some interest, and if a company gets in trouble the bondholder gets paid before any stock dividends are issued. Investing in 50 or more bonds would take a lot of work, but it ought to keep one entertained.Here's how I see things. I can make 5% to 6% in bonds even after figuring in defaults and capital losses (selling bonds at a loss when the issuer turns South). There is currently little opportunity for a capital gain because interest rates can't go any lower, so the 5% to 6% return is the max I can expect. But looking around, 5% or 6% ain't bad. The eighties and nineties are gone. I remember 72','73, and "74 when the market tanked year after year. Taking a pounding and waiting 3-5 years to break even is not for me. Going forward I expect a 2000-2010 style stock market with lots bear and bull action. A bond portfolio might steady things up some, but as you said, bond prices will tank just like stocks in a bear market. Nevertheless, barring default, you will eventually get your money back with bonds...not so with stocks.I laughed out loud with your "not betting on the horse, but betting on the jockey" analogy. Good one.Would you mind disclosing a few of your recent bond trades? I'll do some research and try to figure out the reasoning behind your selection.Codger
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