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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: posthumousone who wrote (14985)	3/19/1998 12:55:00 AM
From: Bonnie Bear	Respond to of 18056

Gary: It depends on what type of bond fund. Convertibles are interesting- they are bonds that can be converted into stocks, so you can use a convertible fund to get most of the upside in the market with very little downside risk. And yes, bond funds are best when interest rates go down. Dr Ed yardeni thinks rates are going down a lot farther-- his track record is scary, I'm not going to bet against him. There's muni bonds that give you tax-free return, mortgage bonds that give mortgage spread and sometimes equity participation, and corporate or even high-yield (junk) bonds that will give you a few percent higher return. The worst part about a short-term bond fund is that the fund managers stick you with 1% management fee so you end up making less than the money market.