Comments on: Is it safe to invest in corporate bonds? http://monevator.com/is-it-safe-to-invest-in-corporate-bonds/ Make more money, invest profitably, retire early Thu, 24 May 2012 00:24:09 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: The Investor http://monevator.com/is-it-safe-to-invest-in-corporate-bonds/comment-page-1/#comment-23462 The Investor Fri, 05 Feb 2010 08:47:33 +0000 http://monevator.com/?p=3550#comment-23462 @Bret - Thanks for your extensive comment, I quite agree with everything you've written. In my comment to DaddyPaul I meant if I had to buy bonds at present I'd buy high yield. <a href="http://monevator.com/2009/11/16/buy-government-bonds/" rel="nofollow">I wouldn't even buy government bonds</a> right now, and they are by far my preferred addition to portfolios for diversification. @Bret – Thanks for your extensive comment, I quite agree with everything you’ve written. In my comment to DaddyPaul I meant if I had to buy bonds at present I’d buy high yield. I wouldn’t even buy government bonds right now, and they are by far my preferred addition to portfolios for diversification.

]]> By: Bret @ Hope to Prosper http://monevator.com/is-it-safe-to-invest-in-corporate-bonds/comment-page-1/#comment-23444 Bret @ Hope to Prosper Fri, 05 Feb 2010 06:53:12 +0000 http://monevator.com/?p=3550#comment-23444 I'm no expert in fixed-income securities, but I don't think bonds are a very good investment right now. With interest rates at close to zero, they only have one way to go and that is up. And, as you pointed out, this will cause most bonds to loose market value. If they are held to maturity to avoid this loss, the interest yield will lag the market rate for many years to come. The yields on muni's and treasuries are so low, they are probably lower than inflation. (I'm talking about the real rate of inflation and not the bogus core rate posted by the Fed.) So, that's a guaranteed money loser, with a lot of municipalities in danger of a default. IMHO, none of this makes bonds look very attractive. .-= Bret @ Hope to Prosper on: <a href="http://feedproxy.google.com/~r/HopeToProsper/~3/I-CdQ1lru74/" rel="nofollow">Investing in a Shaky Market</a> =-. I’m no expert in fixed-income securities, but I don’t think bonds are a very good investment right now.

With interest rates at close to zero, they only have one way to go and that is up. And, as you pointed out, this will cause most bonds to loose market value. If they are held to maturity to avoid this loss, the interest yield will lag the market rate for many years to come.

The yields on muni’s and treasuries are so low, they are probably lower than inflation. (I’m talking about the real rate of inflation and not the bogus core rate posted by the Fed.) So, that’s a guaranteed money loser, with a lot of municipalities in danger of a default.

IMHO, none of this makes bonds look very attractive.
.-= Bret @ Hope to Prosper on: Investing in a Shaky Market =-.

]]> By: The Investor http://monevator.com/is-it-safe-to-invest-in-corporate-bonds/comment-page-1/#comment-23403 The Investor Thu, 04 Feb 2010 20:52:37 +0000 http://monevator.com/?p=3550#comment-23403 Yes, I agree they're probably most attractive bonds at the moment, but if I'm buying risk I'm just a fool for equities, as they say down south. Agreed about a bond fund, you'd have to be mad to buy even a dozen high yielders and think you were diversified. They *do* blow up readers. :) Yes, I agree they’re probably most attractive bonds at the moment, but if I’m buying risk I’m just a fool for equities, as they say down south. Agreed about a bond fund, you’d have to be mad to buy even a dozen high yielders and think you were diversified. They *do* blow up readers. :)

]]> By: Daddy Paul http://monevator.com/is-it-safe-to-invest-in-corporate-bonds/comment-page-1/#comment-23394 Daddy Paul Thu, 04 Feb 2010 19:38:50 +0000 http://monevator.com/?p=3550#comment-23394 I think we are in a good time for high yield bond funds. Most of the damage has been done and companies who are going to fail for the most part have. I would never hold a single corp bond I would let a fund manager figure that out. .-= Daddy Paul on: <a href="http://fundtips.blogspot.com/2010/01/choosing-best-mutual-funds.html" rel="nofollow">Choosing the best mutual funds</a> =-. I think we are in a good time for high yield bond funds. Most of the damage has been done and companies who are going to fail for the most part have. I would never hold a single corp bond I would let a fund manager figure that out.
.-= Daddy Paul on: Choosing the best mutual funds =-.

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