FYI: Which way are interest rates headed? Retirees have been asking this question for the better part of a decade—and that conundrum continues. Just when it seemed that rates were finally moving higher, the Federal Reserve turned dovish in late March, sending bond markets into a tizzy.
Price fluctuations are a source of angst for investors who trade in and out of bonds, or own them in mutual funds and exchange-traded funds. But for investors who own bonds to maturity, it’s no big deal. As long as an issuer doesn’t default, which is pretty rare, investors who own bonds until their expiration dates can count on getting back their initial investment, plus the interest they earned along the way.
Regards,
Ted
https://www.marketwatch.com/articles/retirement-income-bond-ladders-51554500911?mod=barrons-on-marketwatch
Comments
Worth repeating: Recommended portfolio size for investing in individual bonds:
Treasuries only: "'We would recommend starting with a minimum of $50,000, with at least 10 bonds in $5,000 increments,' says Brian Therien ...at Edward Jones."
Corporates: "Investors interested in venturing into slightly riskier bonds that offer better yields—though it’s best to stick with AAA-rated municipal bonds or corporate bonds—will [have a] ... minimum investment for a laddered portfolio ... closer to $250,000."