See if she can sell now for a premium. If she can, then figure out what would happen if you sell at a premium and put the money into CDs, compared to keeping the bonds for a few years and selling at break even, 5% loss, 10% loss, 20% loss. That's the interesting part. All of the bonds are currently valued at a discount to the face value. I'm not sure how much she paid for them, relative to face value. She bought most of them in 1998. Checking a chart of Vanguards long term corporate bond index fund, the peak NAV was in 1998 and has declined since then. Therefore, without having her purchase price at the moment, I anticipate she has taken a loss on the bonds, even if she sales them now. I would like to cut the losses and move on, if there is a good chance they will continue to decline in value.Funny thing is, her financial advisor had all the bond interest being invested in Putnam large cap growth funds (to generate more commisions, obviously) during the market peak of 1999 and early 2000, and all through the continued decline in value of these funds since then. I guess I can't blame him. It could have easily gone the other way and these stock purchases could have increased, rather than decreased, in value.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra