The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments


Subject:  Re: DBLTX Date:  11/29/2011  7:57 PM
Author:  charliebonds Number:  33494 of 36508

I want to thank you fellas for the input. I may not own DBLTX forever, but the fund looks like an acceptable risk as a place to hold some cash.


You're doing just fine. Don't under-estimate the courage and shrewdness it took for you to buy DBLTX, which was an unknown entity when you got in and lacking enough of a track record to have earned much attention from a fund-rating shop like Morningstar, much less a retrospective seal of approval (disapproval) via a "stars" ranking. Your entry suggests that you're able to do sufficient due-diligence and to act on your own ideas. Said another way, you put on a position, and it's working. Take the credit due you.

I understand only a little about the bond market, and I have no confidence in buying individual bonds in this market.

In buying DBLTX, you weren't making a bond market bet. Instead, you were betting that a pair of fund managers who had specialized bond market experience could make you some money. That's a very different bet, and, probably, a far easier one for most investors to make. In short, if you don't know horses, then bet on the jockey, which suggests a way to ease into bond investing. Look for other managers who can offer you an edge over trying to do it yourself. Gundlach and Barach offer that. I'd suggest Fuss and Gaffney (of Loomis Sayles) are another good pair who are thoughtful, experienced, disciplined, and who serve their shareholders well. The other tact one could take to gain bond market exposure is to index. But implementing that gig requires more of a selling discipline than most investors are willing to put together for themselves, and that's why some of us prefer to own our own bonds. We can sit out market price fluctuations.

Wish I was as smart as Charlie in 2008 and 2009 when he bought in at the right price.

Don't be wishing for something that isn't true. 2008 was a tough year for me, and I got killed. In 2009, I was as scared as anyone else and saw no reason prices couldn't have rolled over and begun a second leg down. But I also knew that if I wanted to call myself a value investor, I had to be in there buying, or at least nibbling on the discounts being created. It was no different in 2010, and it hasn't been any different this year. YTD, I've put on 89 new positions. In fact, two more just this morning. So there's stuff out there that could be and maybe even should be bought *provided* the buys are consistent with one's method and discipline.

That's the rub. At a typical thousand bucks a whack to get in, and with a need to carrying upwards of at least 50 positions so as to get exposures to individual issuers down to a reasonable size, and with the work required to put on even 2-4 new positions a week, most investors have neither the time, interest, nor money to do individual bonds better than what they can buy right off the shelf with a fund. But if learning a bit about the bond market interests you, then wander over to Investopedia and start poking around. Their coverage is both in-depth and accessible. Then set up at account at E*Trade or Zions and start putting in screen time. This stuff's not rocket science, and anyone who can buy their own stocks in a responsible manner can buy their own bonds.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us