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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: accountclosed who wrote (1891)	6/30/1999 9:31:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

henry, if one were starting to build a bond portfolio, what would you recommend? psychiatric counseling . . . <g> I will give you a serious answer later today.

To: accountclosed who wrote (1891)	6/30/1999 10:29:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

1. I'm not a big fan of bond mutual funds if your intent is to hold for income. The few I've looked at have expenses that reduce the yield significantly. An individual should be able to buy quality bonds cheaply enough that a hold strategy would be more effective with the actual bonds once your past a relatively modest portfolio size. Ironically I like some of the funds as trading vehicles, particularly the zero coupon funds. Since the funds cash you out to the closing price, which is mid market, you are effectively avoiding paying bid offer spreads which are huge for zero coupon bonds. And for short term trading holds the expenses won't bite hard. 2. I love Vanguard and I respect Pimco. The time horizons are really a matter of individual circumstances. But if the guys on the Nostradamus thread are right stick to overnight paper ;) 3. the size of the portfolio needed to go with individual bonds depends on what you pay in brokerage. If you can get a pretty good discount on bonds you can probably start at a pretty reasonable portfolio size. FWIW we should see on-line bond trading grow and that should bring the cost down even further. 4. that is a pretty broad question. Preservation of capital should be one of the prime goals of any investment approach so I would put credit at the top. I would stick with AA or better. Anything below that is beginning to acquire 'equity' risk and, imo, should have equity rewards. The next important issue is liquidity. Go for liquid issues which should have tighter pricing. 5. Most discount brokers should be able to do bonds. I get all my bond pricing through Bloomberg so I haven't actually searched the web for good info. 6. sorry no, I don't follow closed end bond funds. 7. I'm neutral to mildly bullish for the next couple of days. However I don't believe we have seen the high for bond yields this year. I don't have a trade on yet or a target. It's just a gut feel. proofsheet.com datek.com