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Author: kh Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35365  
Subject: Re: "No Default Risk" part of Fixed-In Date: 4/29/2009 2:27 PM
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Jack, thank you for the reply.

A few weeks ago, I blew up almost all of my grossly undiversified investment portfolio--both fixed-income and equities--and began rebuilding it. When the dust settles, I will be almost entirely in a handful of mutual funds and a couple of equity ETFs.

I agree that mutual funds have their limitations. But I have a strong desire at this point to keep things simple, while simultaneously gaining greater diversification, and, on the fixed income side, producing a steady income stream.

On the fixed income side, I would not rule out buying individual Treasury securities in the future. As for corporate bonds, I don't think buying individual securities will be part of the plan. For me, corporate bond funds will be preferable for ease of rebalancing and asset allocation purposes.

((((What do you mean my "No Default Risk" part of your portfolio?))))

It would probably have been better if I had said "Non-Corporate" part of the fixed-income portfolio.

Basically, I was using the term "no default risk " to mean there is no risk that the issuer of the debt (or underlying debt, in the case of a bond fund) will be unable to repay the debt or underlying debt on time.
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