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Author: pauleckler 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: Did I make a mistake? Date: 1/31/2002 10:31 AM
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Emphatically, if you think interest rates will rise, bond FUNDS are not a good choice. Their NAV will fall as interest rates rise and you will have to sell at a loss or wait until interest rates fall to the same level--maybe 30 years. Short term bond funds do this least, but their low yield makes them not very attractive.

Buy the bonds themselves and hold to maturity or stick with other fixed income investments with fixed maturity dates to avoid this problem. CDs work just as well.
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