Date: Sun, 12 Mar 2006 05:20:51 -0600
From: pmb@his.com (Paul Michael Brown)
Subject: Re: New to bonds...
Newsgroups: misc.invest.financial-plan
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Cogent as ever, Elle wrote:

> Bond mutual funds greatly reduce risk . . .

For the fixed income novice I think bond funds are the best bet. I like
the bond funds that track the total U.S. bond market. All the big
companies offer them. You get professional management, excellent
diversification and low fees.

> The drawback to individual bonds is one has to have 
> a lot of money to have a diverse, and so lower risk, 
> collection.

Another reason I like bond funds for all but the most sophisticated and
diligent investor.

> I have read posts at another newsgroup where many pillory 
> bonds. Be very skeptical of this.

Another excellent point from Elle. Even the youngest and most
risk-tolerant investor should have *some* fixed income in his portfolio.
Doesn't have to be much, and it doesn't have to be fancy. Say 20 percent
in a total bond market index fund.