Date: Tue, 9 Jan 2007 17:48:01 -0600
From: zxcvbob 
Newsgroups: misc.invest.financial-plan
Subject: Re: Asset Allocation question: Bonds
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	=5H6L

kastnna wrote:

> To the OPer, whether you decide to keep with the bond allocation or not
> you probably shouldn't hold actual bonds. ETFs for both equities and
> bonds work great. They are not subject to the discretion of money
> manager's which can keep them more in-line with your intended
> allocation. There is also one for pretty much every sector imaginable,
> so diversification is a snap. Of course, that's just one of many viable
> options.
> 


I disagree.  If interest rates rise and your bonds lose value, you have 
the option of holding individual bonds to maturity and getting your 
capital back.  AFAIK, bond funds do not have maturity dates.

Another reason to invest in bonds is if interest rates are rising, bonds 
will appreciate in value at a time when stocks are especially vulnerable.

Bonds are not all that expensive to invest in if you buy original 
issues.  They do tend to incur high expenses and commissions if you 
buy... what's it called... on the secondary market. [that might not be 
the right terminology]  I buy bonds direct from the US Treasury outside 
my retirement accounts for my bonds allocation, and my tax-deferred 
retirement are almost 100% equities (and a few high-yield exchange 
traded debt securities).

Best regards,
Bob