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If you're interested in an easy, low cost way to invest in bonds, a bond mutual fund may be the way to go. It's an instant ladder, as the bonds it holds have a range of maturity dates. Funds can also offer amazing diversification at a low cost. Check out, for example, Vanguard's Total Bond Market Fund, VBMFX.

The downside of a bond fund, as mentioned, is that it doesn't have a fixed maturity date. If you're going to need your original investment back in the short-med term, individual bonds or CDs may be the way to go. The longer your time horizon, the better choice a fund is.

Also, funds are more attractive for smaller bond portfolios (say, < $100,000), since the greater the investment, the higher your annual fund expense.

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