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Originally Posted by OldShooter
I know. My point was only to give you some benchmarks and an indication of how seriously professional fiduciaries treat imprudent concentrations. Sorry if I was not clear.
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No worries! I was only answering what I thought was a question. Nonetheless, the information is good and may be helpful to someone else on down the line.
Quote:
Originally Posted by phil1ben
For my fixed income portfolio I only own individual bonds both muni and corporate. I have been buying individual bonds for many years and almost always hold until maturity. Normally because the process for a retail investor to sell a bond will yield substantially less than the market price. The process to solicit a bid used by Schwab and Fidelity always results in offers almost 10% below market. The parties making the offer know the Seller is a retail investor and low-ball the bid. I am afraid that if you go on EMMA and look at past trades for the bond you have you will find that the sales price (to a retail buyer as opposed to a dealer to dealer trade) will be much higher than what you will be offered. There is no harm in soliciting a bid. You do not need to accept it. No harm no fowl.
Having said that holding 15% of your father's total portfolio in a Ford bond is probably inappropriate. Don't know the rest of his portfolio but I would be inclined to sell half realizing that he will take a haircut on the sale. Currently, I am personally comfortable with the Ford credit but not for 15% of a portfolio.
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Well, an update of sorts. I looked at selling about 1/2 of it and the bid was woefully low, so I rejected it... as I wasn't interested in taking a haircut. So, as it stands, I am going to hold it. I am still not 100% happy with the bond(s) being 15% of the portfolio, but considering his age and weighing the fairly low risk in some big issue at Ford happening in a fairly short period...I am more comfortable leaving it as is. In the grand scheme of his total assets, he would have to be in really bad sorts for a substantial period of time before he would *have* to have the money from the bonds.
Thanks again to all the posters. I am now a little smarter about bonds, and I thank all of you for facilitating that!