11-06-2016, 12:46 PM
I'm not a big fan. In the very early days of investing everyone learns that, in general, bonds are the safe alternative and stocks are the dangerous one. Even a lot of the mutual funds which I see have a "safe" portion made out of bonds and a "risky" portion made out of stocks. But I don't see bond funds as a low risk option right now, certainly not. Interest rates really can't go much lower, so it's unrealistic to think theses funds would go much higher. Also, the FED will raise rates at some point.
So I would certainly stay away from bond funds for now. Like you said, high price and low yield... now this would mean that in order for it to be a sensible investment it should have great growth potential. Do bond mutual funds really have that? Especially in the current environment?
I only own individual bonds, they are much safer as my plan is to hold until maturity. (so basically I've already locked in the profits, as long as the company is capable of paying back the principal)
So I would certainly stay away from bond funds for now. Like you said, high price and low yield... now this would mean that in order for it to be a sensible investment it should have great growth potential. Do bond mutual funds really have that? Especially in the current environment?
I only own individual bonds, they are much safer as my plan is to hold until maturity. (so basically I've already locked in the profits, as long as the company is capable of paying back the principal)