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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35362  
Subject: Re: New to bonds Date: 10/30/2001 8:05 PM
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Yes, a bond mutual fund is probably a good way to begin--until your investment gets to about $25K in bonds. For larger amounts you can consider owning the bonds themselves instead of a mutual fund.

I think you may be over emphasizing diversification. With investment grade corporate bonds, almost any bond fund will be highly diversified. You should be more concerned about bond rating and maturities. Will you accept long bonds? Do you want short bonds? Or something in between?

Investment grade bonds (those rated BBB or better) are usually fairly conservative investments. Junk bonds (those rated BB or lower) are more risky. If you decide to invest in junk bonds, then diversification becomes more important.

You'll find more on bond investing in the links from message 218 on this board, but also check out the Fool school from the fool.com homepage.
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