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Author: wburble Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35392  
Subject: Re: Thinking about getting into treasuries Date: 3/11/2011 10:28 AM
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You might also want to seriously consider investing in a bond mutual fund or ETF with Vanguard, which I believe now charges no sales fee or commission for its ETFs or funds if you have an account with them; or Ameritrade, which I believe has a very long list of ETFs which it does not charge a trading commission on.

You will probably be pretty safe with a short term or intermediate term bond fund or ETF, even if interest rates go up somewhat. You probably don't want to go long term due to the risk of rising interest rates.

TIPS should not be invested in unless it's a tax advantaged account such as IRA because you get taxed on phantom income. Also as noted intermediate TIPS are now offering zero or negative real yields.

What a lot of people do to establish a core/beginning bond position is open up an account with Vanguard and buy TBM, their Total Bond Market fund. This is a good place to park your money while you are figuring things out. Another one is BIV (intermediate term bond ETF) or the equivalent mutual fund, I don't know the symbol offhand. There are others which vary by duration and mixture of types of bonds (corporates, treasuries, mortgage-backed).

If you have only a few thousand or less to invest at this time, it probably doesn't make much sense to bother with individual bonds or a bunch of different funds, you should probably just put it in a single intermediate or short term bond fund which is in the middle of your comfort zone, then you can add to it over time.
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