Finance Dave
Thinks s/he gets paid by the post
- Joined
- Mar 29, 2007
- Messages
- 1,884
A relative has recently sold a property and now has $600k to invest. They are in their early '70s, so they want to be fairly conservative and go with some sort of bond ladder. I fully understand the concept of bond ladders, but my questions are more administrative in nature.
They want the portfolio to spin off cash at least annually, and preserve most of the principal. So far I've advised on a bond ladder with something maturing every year, they spend the earnings and reinvest the principal only.
Now for the questions:
1) Where can they buy individual bonds directly? Vanguard?
2) They are in a low tax bracket (other than this year due to this transaction), so I've so far steered them away from tax free bonds. Any other recommendations?
3) What's the best way to minimize transaction fees?
4) Would you buy several bonds of different debtors to minimize default risk? For example, if they buy $50k tranches x 12 tranches, then they could buy multiple issues within the $50k...is that a good idea?
Thanks,
Dave
They want the portfolio to spin off cash at least annually, and preserve most of the principal. So far I've advised on a bond ladder with something maturing every year, they spend the earnings and reinvest the principal only.
Now for the questions:
1) Where can they buy individual bonds directly? Vanguard?
2) They are in a low tax bracket (other than this year due to this transaction), so I've so far steered them away from tax free bonds. Any other recommendations?
3) What's the best way to minimize transaction fees?
4) Would you buy several bonds of different debtors to minimize default risk? For example, if they buy $50k tranches x 12 tranches, then they could buy multiple issues within the $50k...is that a good idea?
Thanks,
Dave