I didn't see this one posted before:
Stewardship vs. Salesmanship—Bond Mutual Funds Gone Awry
- Alec
Stewardship vs. Salesmanship—Bond Mutual Funds Gone Awry
- Alec
Bogle on Bond Expenses [speech]
- Thread starter ats5g
- Start date
mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks for the link. We do not seem to get a lot of good papers on bonds and this is a beauty. I like Mr. Bogle's use of the term "relentless rules of humble arithmetic" here. It demonstrates that bond funds do not need to have a large ER to be successful, and lead the pack as the Vanguard funds do.
mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Thanks for the link. We do not seem to get a lot of good papers on bonds and this is a beauty. I like Mr. Bogle's use of the term "relentless rules of humble arithmetic" here. It demonstrates that bond funds do not need to have a large ER to be successful, and lead the pack as the Vanguard funds do.
I have said similar things before but we have some stalwart bond fund defenders on the forum. This will probably resurrect the troops. 
I can't see a reason to pay any fees for buying or holding fixed income. It's very easy to buy a laddered portfolio of CDs, government or non-government bonds with minimal or no fees. They can then be held until maturity or sold at the current market rates in the event of unexpected need. The nice thing about holding to maturity is that the principal is recovered except for the credit risk of the non-government backed bonds.
I personally like the short maturity yield of CDs which are readily available around 5.25%. That's not great but it beats US 30 year bonds. By diversifying with brokered CDs, you can avoid the FDIC limit.
I can't see a reason to pay any fees for buying or holding fixed income. It's very easy to buy a laddered portfolio of CDs, government or non-government bonds with minimal or no fees. They can then be held until maturity or sold at the current market rates in the event of unexpected need. The nice thing about holding to maturity is that the principal is recovered except for the credit risk of the non-government backed bonds.
I personally like the short maturity yield of CDs which are readily available around 5.25%. That's not great but it beats US 30 year bonds. By diversifying with brokered CDs, you can avoid the FDIC limit.
Last edited:
saluki9
Thinks s/he gets paid by the post
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- Feb 23, 2005
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I have said similar things before but we have some stalwart bond fund defenders on the forum. This will probably resurrect the troops.
I can't see a reason to pay any fees for buying or holding fixed income. It's very easy to buy a laddered portfolio of CDs, government or non-government bonds with minimal or no fees. They can then be held until maturity or sold at the current market rates in the event of unexpected need. The nice thing about holding to maturity is that the principal is recovered except for the credit risk of the non-government backed bonds.
I personally like the short maturity yield of CDs which are readily available around 5.25%. That's not great but it beats US 30 year bonds. By diversifying with brokered CDs, you can avoid the FDIC limit.
Well there are many reasons people would have to pay to hold fixed income assets
1. Just because you're buying individual bonds doesn't mean you're getting them for free. The bond market is still not a kind place for small investors.
2. Many people have most of their assets in 401(k) plans and IRAs. It is almost always impossible to buy individual bonds in 401(k)s.
3. In almost all cases these plans are the most tax efficient places to hold fixed income.
4. In some FI classes such as high yield, convertibles, and foriegn bonds it is not a good idea for the vast majority of folks to buy individual bonds.
