About Bonds

With the stock market stubbornly refusing to settle down and smooth out, Wall Street has been scrambling to come up with "product" they can sell to gun shy investors. One such new concept is the Lifestyle fund; an extremely diversified package designed to be the single fund in an investor's portfolio.

Bond In Investing Savings There are two general types of these funds, in which assets are spread out across a wide range of stocks and bonds. In one, securities are held directly, in the other, assets are held through other funds.

Securities brokers and dealers $53, 700 Security and commodity services 46, 900 Mortgage bankers and brokers 36, 300 Commercial banks 33, 000 Stockbrokers, who provide personalized service and more guidance over a client's investments, usually are paid a commission based on the amount of stocks, bonds, mutual funds, insurance, and other products they sell. Commission earnings are likely to be high when there is much buying and selling and low when there is a slump in market activity.

Bond Investment Toledo Toledo Fidelity's Freedom 2030 is an example of the first type. It targets a specific retirement date, and the cash and bond stakes rise as that date approaches. This type of fund has created a perception among investors that its value will not drop and that it is safe. But, in fact, these are no safer than a standard mutual fund.

Up the ladder are corporate bonds...then the stock market...and some of the most popular investments these days...Mutual Funds.

James Bond Trading Card Since we sold all of our investment positions on October 13, 2000 and preserved our capital, Fidelity Freedom 2030 has lost 39% (through 2/21/03). Do you think that's an isolated incident? I'm not picking on Fidelity, but here are some of their other Lifestyle funds with returns over the same period:

Serves as a middleman between the supplies of capital and the users of capital; also known as an underwriter. Issuer or notes. Investment Grade Bond issues that the three major bond rating agencies, Moody's, Standard & Poor's, and Fitch rate BBB or Baa or better. Many fiduciaries, trustees, some mutual fund managers can only invest in securities with an investment grade rating. See "Ratings."

Bond In Investing Stock Fidelity Freedom 2020: -34%

According to MBA economists, term interest rates. The Federal Reserve interest rate only affects the federal fund rate, which banks charge each other for the money they lend overnight. year Treasury bonds, and the mortgage rate is usually 1. year Treasury bonds. year Treasury bond rates only fall when unemployment rates drop and there is greater confidence in the economy.

Municipal Bonds Investment Fidelity Freedom 2010: -22%

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Bond Terms Trading So much for perceived safety.

Bond Debt High In Inside The other Wall Street bright idea is the fund of funds (FOF). It sounds good, but it actually creates a double layer of costs; the cost of purchasing the fund itself, and then the expenses of the mutual funds the FOF purchases.

Bond Greenville Greenville Take for example, the Enterprise Group of Funds. It shows an expense ratio of almost 2% plus a sales charge of 4.75% according to Morningstar. Tack on the underlying expenses and you're paying out more than 3% a year in investment expenses.

Trading Stock And Bonds If you're a new investor (with less than $10k), and have your account at a discount broker, you can add a minimum of 1% per year in fees just for the privilege of having an account. That brings the total up to 4% in annual expenses. Talk about adding insult to injury.

Bond Investing Municipal FOFs are sometimes being touted as the only fund you need no matter what the investment climate. So, let's compare to see how the Enterprise fund of funds performed during the same period as mentioned above for the Freedom funds:

Basis Bond Finance Hill Enterprise Group of Funds: -35%.

Bond Explained Terms Trading The bottom line is that no matter what type of mutual fund you choose, or what anybody claims it will do for you, you must be vigilant and see if it does what you were told it would. In investing, there is simply no such thing as a sure thing. Sure you need to know how to recognize a good investment. But just as important-maybe even more important-you must know when to recognize that a good investment idea didn't work out, cut your loss, and sell.

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Bond Houston Houston Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped countless people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: www.successful-investment.com.

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