Sunday, January 19, 2014

Questions on Bond fund

I am totally invested in Stocks. I don't have any bond fund but I am planning to add some to it.
After some research I found that most of them required a minimum investment of $1000 or $3000.
Is there any bond fund that I can open without this minimum investment. I was looking at Vanguard.
I am not looking to do it in US treasury directly.
Fellow bloggers any advice


  1. Buy I bonds from Treasury direct. Until you cash them in they are tax free.

    But you can buy the bond ETFs. VCSH is my back up emergency fund.

  2. Peter Lynch has said, the most profitable investment are stocks.
    And even if you want to withdraw money regularly, bonds have only disadvantages because they generate less profit on average as shares (profit growth + dividends).

    I would not invest in bonds, regardless of whether 30 years or 70 years.


    1. DS I want to diversify , I don't want to just be with only Stocks. Thanks again.

    2. I'm a big fan of bonds. It is very unpopular among DGI but I always keep a big allocation of my portfolio in bond funds.

      For high yield taxable - JNK, HYG, these are taxed as ordinary income

      For corporate taxable - LQD, VCLT

      For treasuries - TLT

      For preferreds(these are "bondlike" stocks) - PFF, about 50% is taxed as ordinary income/50% qualified

      For tax free yield - MUB, TFI, ITM

      All of the above can be purchased commission free via various brokers.

      For high yield tax free, I like CEFS. Check, search for tax free municipal, and stick to things with a large market cap and zero ROC. I also try to focus on funds that have been around since the 1980s. Things like NUV, DMF, LEO, NPI, etc. Their education center there is nice is worth reading. also has a nice education center on CEFS.

      Hope this helps.