Given that one can purchase fixed-income (bonds and CDs) of several-years' duration with YTMs nearly equal to good money-market funds such as Vanguard's VMMXX, coupled with the fact that interest rates seem very unlikely to increase and pretty likely to decrease over that time frame ... it seems like a heads-up move to invest in some of these (with money one is certain to need over that time-frame).
But, the ones with the highest yields tend to be "callable", which I believe means that the issuer can elect to simply pay off the principal at a time of their choosing. So does it defeat the premise of my rationale to invest in callable bonds ? If rates do indeed fall, is it a near-given that the issuer will exercise their call ?
But, the ones with the highest yields tend to be "callable", which I believe means that the issuer can elect to simply pay off the principal at a time of their choosing. So does it defeat the premise of my rationale to invest in callable bonds ? If rates do indeed fall, is it a near-given that the issuer will exercise their call ?
Statistics: Posted by RustyShackleford — Tue Jan 23, 2024 7:16 pm — Replies 0 — Views 65