Originally Posted by jIMOh
I know rates are going down... but they cannot go much lower.
No, they aren't (in general). The Fed has direct control over one particular rate at the very short end, the others float freely. Right now, the yield curve is very steep at the short end and then relatively flat out to 30 years. In munis, at least, rates are rising across the yield curve - not surprising as frightened investors suddenly become risk-adverse. Somewhere on the web there's an animated display showing how the yield curve has gyrated over the last 30 years - it's fun to watch.
If your crystal ball indicates that rates are going to rise across the board and you're in the mood to invest in bonds, then you should park your money in a money-market fund (preferably one that doesn't break the buck
). In normal times, you can often walk out the yield curve a bit and get much better total returns with very modest risk to principal. For example, Vanguard's Short-Term Tax-Exempt fund shows a positive return YTD - fairly amazing considering the carnage everywhere else.