No. of Recommendations: 1
In my opinon 20k does not justify the time it would take to select and invest in individual bonds. Hte 0.2% vangaurd charges, which pays for all documentation and telephone support are well worth the money.

"You know what I paid for ten Xerox 8's of '27 on March 1 of last year? Exactly $3382.50, which is a whole lot less than 20k. Do the math. How many years do I have to hold them before I'm in the money on that investment? Meanwhile, what's my current yield? (Try 23.7%, which beats stocks all to hell.)"

Thats nice but,
1) you got lucky, let's see if Xeroz lasts till '27, you have not won with junk bonds until you get your priciple back.
2) bond funds offer diversification, with 20k you can only invest in 5 or so such positions, that will make it easy to loose money fast. It is very clear to me that the origial poster should not be buying 5 junk bonds series.
3) The person who posted originally was unlikely to be the type of person who had the time and knowledge to research individual bonds, for that kind of person deligating to fund managers is a good idea.
4) My guess is that if you bought the vanguard junk bond fund and then worked a second job instead of researching and investing (no doubt succesfully) small amounts of money in junk bonds you would actually end up with more money in the end.

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