| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
I am considering investing in a short-term bond fund. I have been under
the impression that these are pretty safe. That is, even if interest
rates rise (as many believe will happen) I will still get the same
monthly return even though the value of my share will be less. I also
thought that the value of my share would almost certainly bounce back
in a few months as existing bonds were replaced with new ones at the
higher rate. I am beginning to suspect that these impressions may be
incorrect. Could someone out there enlighten me?
Thanks.
Hillel
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 204.1 | Over time beats money market. | FREEBE::NEARY | Bob Neary | Tue May 19 1992 12:32 | 9 |
I've used short term bond funds as "Money Markets" for the past year or
so myself. The price does float around, but if you don't need the money
tomorrow you get a much better rate of return (7% vs 4%) even aside
from gain on price of fund itself. On the Fidelity Spartan Limited Term
Govt. Bond Fund the price has bounced between 10.00-10.20 for the past
year while the yield has been about 7%. Keep in mind, my goal is not
capital gain (altho' I don't mind) but rather a better rate of return
on excess cash.
| |||||