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Pastimes : Ask Mohan about the Market

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To: Otimer who wrote (14975)3/18/1998 11:01:00 PM
From: posthumousone  Read Replies (1) of 18056
 
Can someone please explain why a bond fund should be considered. If I invest $1000 NOW, sure I will earn intrest but if interest rates go up my share price goes down, cancelling any gains I get from the higher yield. It seems you are just betting on interest rates to go down?

Why would I risk putting money in a short term bond fund that is yielding 5.7% when interest rates can rise and wipe out my gains when I can put it in money market earning 5.2% risk free?

Or am I to just do the ol dollar cost averaging and hope for the best.
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