2013 was a great year for investments. S&P 500 grew more than 30%. See why it was bad for investing.
Are Vanguard Long Term Muni Funds Really Long Term Or Just Long Term In Name Only?
Vanguard long-term muni bond fund offers a much higher yield with a duration not that much longer than that on the intermediate-term fund. What gives? Is it a free lunch?
Bond Fund vs CD In the Next Five Years
Under what circumstance will a bond fund do better than a 5-year CD in the next five years?
Higher Yield On Brokered CD vs Early Withdrawal Option
Bond interest rates came up by about 1% after the Fed started talking about tapering Quantitative Easing. We are starting to see some higher rates in brokered CDs. This makes sense because brokered CDs compete directly with bonds. Brokered CDs don’t have the early withdrawal option. If you want out, you have to sell them […]
Buy Bond ETFs At Large Discounts To Net Asset Value (NAV)
For reasons I don’t completely understand, bond ETFs, especially ones investing in illiquid bonds such as munis, trade at a premium to the net asset value (NAV) most of the time. That means you will pay more to buy the ETF than the value of the illiquid bonds held by the ETF. Look at these […]
Stable Value Fund vs Bond Fund vs CDs
CDs are better than bond funds these days even though financial advisors rarely recommend CDs. Many 401k or 403b plans include a stable value fund. How do those compare to CDs and regular bond funds? CDs are appealing for several reasons: higher yield, principal stability, and FDIC-insurance. Stable value funds share some of the same […]
Why Financial Advisors Favor Bond Funds Over CDs
CDs are a better deal than bond funds nowadays but investors often don’t realize it. You would think financial advisors would be all over it when they are living and breathing in the investment world day in and day out. However, besides Allan Roth and Larry Swedroe, I haven’t seen many financial advisors recommend CDs […]
Why Investors Don’t Realize CDs Are a Better Deal Than Bonds
The best CDs are a better deal than bond funds but investors don’t realize it. They overvalue simplicity, overpay for liquidity. and they underestimate how easy it is to buy CDs even in IRAs.
CD vs Bond Fund: A Case Study
Although interest rates dropped during the study period, favoring bond funds, buying a CD still came out ahead.
Invest In Long Term Bonds Now?
Back in June 2012, a reader asked in a comment on my post What to Do When Interest Rate Is So Low: What would you think about this Vanguard Bond Fund for the next couple of years of low interest rate – VWESX [Vanguard Long-Term Investment-Grade Fund]? I said I wouldn’t be comfortable with it […]
Diversify Bond Funds with CDs
Bond funds and CDs are not mutually exclusive. Considering investing in both bond funds and CDs.
Pay Down Mortgage vs Investing In Bonds
In a low interest rates world, you should take a serious look at any loans you have. Although a 3.25% 30-year mortgage is often said to be "cheap money" or "almost free money" it’s neither cheap nor nearly free compared to the rate you earn on your bonds. This chart shows the difference between the […]