Lux Investing
What are some good bonds to invest in?
I am preparing my portfolio analysis for my investments class, and I have decided to invest 20% of my capital in bonds for the fixed income asset class. Does anyone have any bond recommendations & if so, why? Thanks!
Public Comments
- Depends on what you are looking for as far as risk. The less riskier are obviously the government bonds, but since it is for class I would go with corporate bonds for the possibility of higher returns. I do not know the terms of the investment exercise, but I would stay away from bonds. The market right now is more conducive to high returns with stocks.
- Bonds are a game for institutional investors, not retail investors. Unless your portfolio is worth tens of million dollars, you will not be able to gain the benefits of diversification in the bond portion of your portfolio. A single lot of bonds has a face value of $100K -- so buying in lower denominations will cost you more in (hidden) transactions costs. The bid-ask spread for fractional lots is large. My advice is to put 20% of your portfolio into a fixed income mutual fund.
