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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (33913)	3/21/2009 2:17:32 PM
From: E_K_S	Read Replies (1) \| Respond to of 78744

I know through Schwab the transaction cost to trade bonds is very high (perhaps 2%-3% total commission in/out). When you have to give that much away in expenses the yield begins to not look that attractive. You have to trade in size (ie $50K) and usually split the bid/ask price. There might be some good buys with the Toxic Asset Plan to be announced next week. Toxic Asset Plan Foresees Big Subsidies for Investors nytimes.com From the article:"...The plan to be announced next week involves three separate approaches. In one, the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell. In the second, the Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up on a dollar-for-dollar basis with government money. In the third piece, the Treasury plans to expand lending through the Term Asset-Backed Securities Loan Facility, a joint venture with the Federal Reserve...." ========================================================== If the Fed sets up something similar to Treasury Direct, you might be able to buy a share in some of these assets for pennies on the dollar w/ a very low transaction costs. The other Bond like asset that is beginning to look attractive again are Tips (Treasury Inflation Protective Security). I use my Treasury Direct account to buy Tips & Notes. I also use Vanguard and hold shares in their TIPs, GNMA and treasury fund(s). EKS