UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: foobar73 Big red star, 1000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35380  
Subject: Re: Fixed Income Question Date: 5/7/2003 6:03 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
The question (I finally got around to it) is "Is a CD ladder still a better choice than just using a Fund like this". I want maximum return with pretty much NO risk.

From what I can tell, this fund holds some lower grade debt, which means you will have losses if a number of them go bad. I don't know if the "insurance wrapper" you mentioned will cover such losses. Certainly this isn't the same as FDIC insurance, or any other guarantee from the government, though.

In a nutshell, you're getting better returns mainly because you're taking on larger risk. This isn't necessarily a bad thing, especially as I understand the fund has a very short duration and thus limited risk of losses due to rising interest rates, but you should understand that this is not really a "no risk" investment.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next


Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
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.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.