Bonds: The Unbeaten Path to Secure Investment Growth

Part V. BOND INVESTMENT STRATEGIES

"IF YOU DON'T know where you are going, you will end up somewhere else," said yogi Berra, manager of the new york yankees. In this section, we'll help you get to where you would want to go, if you knew where that was. In chapter 17, we outline four steps you might take to design and execute your personal bond-investment strategy. Before making any investment, you should update your life objectives and financial needs. After you've considered your future, divide your investment funds into two pots: secure and risk taking. Having done that, consider what the after-tax consequences of your investment choices might be and how the results might modify the working model of your proposal. finally, purchase plain-vanilla bonds that meet your financial objectives.

We offer a variety of financial-planning stories in chapter 18. These stories will give you a sense of how you might use bonds to design your own bond portfolio. One of our examples is a socially conscious investor who takes the unusual step of using bonds as her investment vehicle. Other investors deal with life-planning issues of achieving financial security, saving for college, and preparing for life's transitions.

In chapter 19, we present the concept of the yield curve, a plotted snapshot of interest rates, and how to adjust your investment strategies to maximize your return. We show you how to construct a bond ladder tailored to your own personal needs within the context of market fluctuations, ...