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"So is the need to rebalance great enough to sell bonds prior to maturity?"

I think not.

When I invested my old 401k funds in bonds early in 2009, one of the bonds I bought was a Merrill Lynch bond at 65c on the dollar. It got called at par a few months back. Would I have sold? Probably not. I don't trade bonds. Charlie has a nice term, and I'm like that--I collect them, too. However, I have nothing against a callable bond as long as I bought it at a discount, and if it can't be bought at a discount, I don't buy it. Plus, there have been two calls in the past month on my munis, and in addition to the Merrill, another call on a corporate.

Maybe the issuers of your bonds aren't calling them, but mine sure are. Your turn may come.

Best wishes, Chris
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