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<< I personally wouldn't invest in a bond fund either, just as much risk as an equities fund, thus would opt for the fixed income/money market if possible. >>

This is incorrect. Bond funds do NOT have as much "risk" as equity funds . . . .

I probably needed to clarify myself.

Many people think bonds/bond funds are lower risks because it is not as obvious that you can lose your principle. The important point to remember, bonds are only as good as the company the writes them. Companies go bankrupt or default on payments. Nothing is guranteed. Therefore, since bonds can lose value/principle, IMHO, there is as much risk as equities. I'm sure Enron and WorldCom bonds looked good at one point. Underlying company went down, so did the value of the bonds. A bond fund itself can lose per share value just with an increase in interst rate despite investing in the best bonds available. So no protection there either.

If one is looking to protect principle of look for a steady income, one should be in CDs, T-bills, or money market fund. That was more the point.

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