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Author: mb0329 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35357  
Subject: Re: Stocks, Bonds, or cash Date: 9/2/2001 5:04 PM
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What are your goals?

My goals are protection of capital...using interest income generated to selectively pick individual stocks. I like to do my own investing..and lean against picking some allocations (x% bonds, y% stocks etc)..and forgetting about it. The type of account I have (401k)..allows me unlimited trading for a fixed fee a year...so commissions are not a question. I find that having my life savings capital safe in fixed income..while employing the income generated into equities..gives me the best of both worlds..ability to sleep at night..while taking some chances.





What is your timeframe?

At the current time..my timeframe is probably 10-15 years...until I retire.

Are you going to be investing more money as time goes on, or are you limited your current investment capital?

I will be investing more in a separate 401k plan with my new employer.
My bonds are in another account that I set up when I left my prior long term employer.



You mention one success predicting stock prices. That doesn't make a trend. Interest price movements are notoriously hard to predict. Short-term and medium-term rates don't always move in sequence.

You are absolutely right about this with 1 or 2 exceptions. While most of the time it is impossible to predict interest rates when they are in middle ground...when they they are at extremes , the odds are in your favor to do so. The stock market was at record valuation (over past 100 years) at end of 1998 (read "Valuing Wallstreet")...which could not be sustained. Exact timing is not possible..but probably no necessary.



Would you be able to reach your goals if you just said "Okay, I'm going 15% stocks, 40% bonds, 55% cash and periodically rebalancing"?


See above. For the current time..it is my goal to pick stocks with income generated with fixed income. Currently..my account is 10% equities and growing.


Returning to my original question...I am looking for advice as to what to do with bonds at this time that have appreciated. Interest rates will probably stabilize for 'awhile'..but eventually head up. There may be 1 more or at most 2 more Fed cuts...and that's it.
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