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Hi richinaz --

Is there a reason you prefer bonds over something like a multi-year guarantee annuity (MYGA)?

A few --

First, liquidity. Poking around after being inspired by your question, it appears that many of the higher yield MYGAs have strict liquidity restrictions that limit the ability to take money out before maturity. One function my bond ladder serves is as a form of 'ballast' in the account where I manage my options investments. To serve that purpose, the investment needs to be able to be liquidated if necessary.

Second, the fine print. Many of the higher yield MYGAs that I've been able to see publicly have fine print restrictions or fees that make it look like "the large print giveth, the fine print taketh away" such that the yield I'd actually receive would be below the advertised amounts.

Third, contract minimums. Many of the higher yield MYGAs that I've been able to see publicly have higher minimum contract amounts than I would need to serve my monthly bond ladder. Granted, that one I could get away with by using something like quarterly or every six month maturity windows instead of monthly, but even then I'm sacrificing convenience as well as liquidity to get to essentially where I am with the bonds.

Regards,
-Chuck
Home Fool
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