Retirement - Now what? Message Board

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Strategies & Market Trends : Retirement - Now what?

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To: deeno who wrote (198)	7/26/2007 8:18:22 PM
From: OldAIMGuy	Read Replies (1) of 288

Hi Deeno, Re: Distribution of principal and bond funds...... I agree that's always a concern with this sort of fund. I believe the part of the equation we aren't seeing here is what their cost for those funds are. I've paid as little as $0.33 on the dollar for converts myself in the past. What they show there is what the face of the bond says. If they bought a 5% bond for half its face value, then the effective yield 10%. There's a difference in the level of "leverage" being used by these two Calamos funds. CHY uses less. Even if these don't suit your fancy, take a look at almost any long bond funds and you'll find the recent drop in price to be between 10% and 20% these days. They've dropped dramatically in the last 30 days. For me, I add to these positions when they're out of favor and then trim back on the positions when the price/share is happier. I hold the core for the income in the mean time. I do get concerned with "return of principal" with funds of this nature. There's no use letting them hold our cash just to give it back. Best regards, Tom

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