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ESRBob · 06-16-2005, 03:17 PM

Yeah, I took the Penfed route, 5 years, 5% APY as my medium term bond choice recently when rolling over some munis.

One thing about the junk bonds -- just because there haven't been any defaults (100% loss) doesn't mean there haven't been any downgrades, which can lower price and hurt annual capital return, too. However, we can all hope the Vanguard managers will ride those out and get par for them in the end, so it isn't a big deal for long term holders.

I agree that nothing on the horizon makes junk look particularly bad as an asset class -- obviously individual companies will have their pratfalls. I wonder how are those old GMAC bonds doing,

06-16-2005, 03:17 PM	#16
ESRBob Thinks s/he gets paid by the post Join Date: Mar 2004 Posts: 1,303	Yeah, I took the Penfed route, 5 years, 5% APY as my medium term bond choice recently when rolling over some munis. One thing about the junk bonds -- just because there haven't been any defaults (100% loss) doesn't mean there haven't been any downgrades, which can lower price and hurt annual capital return, too. However, we can all hope the Vanguard managers will ride those out and get par for them in the end, so it isn't a big deal for long term holders. I agree that nothing on the horizon makes junk look particularly bad as an asset class -- obviously individual companies will have their pratfalls. I wonder how are those old GMAC bonds doing, __________________ ER for 8 years; living off 4.3% of savings (and a few book royalties ;-)