I'm getting about 5% on CDs. If the Federal Reserve lowers interest rates, I may want to move some money from the CDs to bond funds. I'm wondering if anyone trys to forecast what the average bond fund (or, say, the Lehman Brothers Aggregate Bond Index) will do.
2006-10-12 06:23:00 · 3 answers · asked by Dale 1 in Business & Finance ➔ Investing
As an advisor, I'm not a big fan of bond funds in general...why pay an annual management fee if you don't have too?
That said, depending on your tax bracket and state, municipal bonds can be very attractive. Another favorite of mine, are the government agency bonds, ie: FLHB, FFCB, FNMA etc. Their yields tend to be very competitive with the CD's and you are able to get some longer maturities with them too.
2006-10-12 07:49:03 · answer #1 · answered by henry9tx8 2 · 0⤊ 0⤋
If the economy does tank, interest rates will indeed fall. But long term rates are not especially attractive currently, so I am dubious that bonds will perform very well. However, if the economy does collapse, they will certainly do better than stocks.
2006-10-12 08:10:31 · answer #2 · answered by Anonymous · 1⤊ 0⤋
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2006-10-12 14:58:34 · answer #3 · answered by stock.geek 2 · 0⤊ 0⤋