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No. of Recommendations: 2
"Do you normally keep bonds until maturity?"


I buy with the intention to hold until maturity. But that isn't what happens. About one-third gets called. A sixth defaults and goes into Ch 11. Another sixth I sell off, because they aren't working out. Maybe a twenty-fourth I'll trade out of to capture an unexpected fat gain before time-decay takes the profit back. The rest do mature as hoped and planned

Normally, I'm carrying 200-300 positions, selected from treasuries, agencies, munis, corporates, and foreign sovereigns, sized as follows: for the low-tier stuff, a max of 2 bonds per issuer. For the mid-tiers, 2-5 bonds/issuer. For top-tier, 5-10 bonds max per issuer. In short, I'm running my own "spectrum bond fund". On some positions, I've made as much as 100% per year for my holding-period. On others, I've suffered a 100% loss. But by and large, my returns have been consistent with the top 5% of managers with that investment objective. So I'm content.

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