UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next
Author: GREYFOX Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35357  
Subject: Re: Building Bond Portfolios Date: 11/24/2002 5:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
nnn12345 writes-
" I also wonder if you are sincere or are somewhat playing around regarding your discussions about bonds in the C +/-rated category.
Surely they are not for everyone but for those who have the knowledge and experience trading such stuff maybe there is real money to be made.I prefer the buy and hold strategy for bonds, not the least of which is due to the high costs of buying and selling individual bonds, whic is one reason I think such horse trading of low rated bonds is best done on a level where the trading costs are minimal, not where I
am at I admit."
IMO the Buy and Hold style is for the birds.I am old enough to have been one of the "lucky" ones who bought Treas. yielding double digits in the 70's.Unfortunately I held to maturity(mid 90's) and therefore missed some great entry points for equities.As well as I did in the Gov's I would have done much better taking my profit in the bonds(and paying the damm Tax) and investing more in equities.I also had friends who lost gobs of money by buying and holding bonds in the 50's and 60's-adjusted for inflation:adding insult to injury the govt. imposes taxes on the nominal interest and/or gain.
While I agree with your'e statements re the Tobacco Bonds I decided to pass because I could not feel comfortable as to the risks.It is one thing to manage risk by buying Junk where the outsized returns compensate
for risk and another when I am geting 6%.While I have Taken big losses in
Junk like Casual Male and Exodus I have more then made up for those losses by Hedging Steps and winners like Level 3 and World Com.While I agree such plays are not for everyone I would think people like Charlie who are willing to invest the TIME as well as the money will do quite well over time. My opion is that now is not the time to buy BBB or higher rated Bonds to hold untill maturity.The only way interest rates can stay at this low level for the next 5 years is if the U.S. economy is in the crapper-which means the default rate will be VERY BAD.Just my opinion.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (15) | Ignore Thread Prev | Next

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement