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Strategies & Market Trends : US Inflation and What To Do About It -- Ignore unavailable to you. Want to Upgrade?

To: Eric who wrote (134)	8/26/2010 6:05:24 PM
From: RetiredNow	Read Replies (1) \| Respond to of 1504

Hi Eric, have been on extended leave for a much needed break. I take vacations in August like the Europeans. :) So I'm back to work and the threads. Looks like the market has not disappointed. Still trending downwards in fits and starts. Did I tell you that I've been steadily buying junk bonds? Not ETFs, but bonds directly. I've been taking my time, but I've been buying bonds to lock in returns so I can make darned sure I retire in a few years. The thing I like about buying corporate bonds directly is that you can mitigate default risk by doing your due diligence and studying their financials and prospects. Then once you buy, you have locked in the annual return, and you can ignore the daily fluctuations in bond price if you plan to hold to maturity, which I do. It's a pretty sweet deal. The average portfolio return on my bonds is 8.3% over the next few years. And that's tax free, because I'm holding those bonds in my IRAs. Pretty sweet, eh? Anyway, that only represents 20% of my portfolio, but I think junk bonds represent a better risk/reward ratio than stock ownership right now. So instead of upping my stock allocation as I ease back into the market, I'm upping my junk bond allocation. If there is a collapse in stock prices, I may buy stocks again, though. How are things in your neck of the woods?