Comments on: How a Callable Bond Worked http://thefinancebuff.com/2007/12/how-callable-bond-worked.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: TFB http://thefinancebuff.com/2007/12/how-callable-bond-worked.html/comment-page-1#comment-348 TFB Mon, 10 Dec 2007 15:48:00 +0000 http://blog.thefinancebuff.com/?p=200#comment-348 Thank you for the comments and questions.<br/><br/>@AGG: Bonds did fine this year. BND and AGG are both up ~6% in 2007. Vanguard Intermediate Treasury Fund and Inflation Protected Fund are both up 9%. If Fed keeps lowering interest rates, yield on money market funds will go down. The FFCB bond I'm considering pays 5.6%, state income tax free. Not bad in this environment in my opinion. The worst case is that I'm stuck with it for 11 years, collecting 5.6% a year. I'm comfortable with that. I'm not recommending it to everybody though, because 11 years is a long time.<br/><br/>@Anon: Vanguard's small value ETF ticker symbol VBR is cheaper by 0.12% a year. However IWN has 1/3 more stocks and 40% lower median market capitalization. When I buy a small cap fund/ETF, I like it small and more broadly diversified. <br/><br/>VBR is also 30% in financials. I don't speculate on sectors with an exception for REITs. So I don't have any opinion on IYF. Thank you for the comments and questions.

@AGG: Bonds did fine this year. BND and AGG are both up ~6% in 2007. Vanguard Intermediate Treasury Fund and Inflation Protected Fund are both up 9%. If Fed keeps lowering interest rates, yield on money market funds will go down. The FFCB bond I'm considering pays 5.6%, state income tax free. Not bad in this environment in my opinion. The worst case is that I'm stuck with it for 11 years, collecting 5.6% a year. I'm comfortable with that. I'm not recommending it to everybody though, because 11 years is a long time.

@Anon: Vanguard's small value ETF ticker symbol VBR is cheaper by 0.12% a year. However IWN has 1/3 more stocks and 40% lower median market capitalization. When I buy a small cap fund/ETF, I like it small and more broadly diversified.

VBR is also 30% in financials. I don't speculate on sectors with an exception for REITs. So I don't have any opinion on IYF.

]]> By: Anonymous http://thefinancebuff.com/2007/12/how-callable-bond-worked.html/comment-page-1#comment-347 Anonymous Mon, 10 Dec 2007 14:14:00 +0000 http://blog.thefinancebuff.com/?p=200#comment-347 I am puzzled by your choice of IWN. First, why not use Vanguard's viper equivalent - they are much cheaper? Second, this ETF has 31% of its value in finance, since it is Russel 2000. Do you think it is the right time to get into things like IYF and other heavy-finance ETFs? I am puzzled by your choice of IWN. First, why not use Vanguard's viper equivalent – they are much cheaper? Second, this ETF has 31% of its value in finance, since it is Russel 2000. Do you think it is the right time to get into things like IYF and other heavy-finance ETFs?

]]> By: AGG http://thefinancebuff.com/2007/12/how-callable-bond-worked.html/comment-page-1#comment-346 AGG Mon, 10 Dec 2007 13:59:00 +0000 http://blog.thefinancebuff.com/?p=200#comment-346 Thank you for the post. I've been reading your blog for a while, I like your way of thoughts. With regard to bonds at this time, many sources are suggseting to opt out of them due to the risk of rate fluctuation in the next year and sticking with money markets. Things like BND, or i-shares total bond did not do well recently. What do you think? Thank you for the post. I've been reading your blog for a while, I like your way of thoughts. With regard to bonds at this time, many sources are suggseting to opt out of them due to the risk of rate fluctuation in the next year and sticking with money markets. Things like BND, or i-shares total bond did not do well recently. What do you think?

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