Thoughts on bond investing

I’m 65 and am looking at my allocations. Everything I read suggests being about 40% in bonds. As much as I try to learn about them, I simply do not understand bind investing much less where to invest. It has been said you never should invest in things you don’t understand. So, I’m struggling with pulling the trigger and putting my money into them and just staying in equities. I’d appreciate any insights you might give me.
Thank you b

Start with the Bond and Fixed Income FAQ article on the top right of your screen. Then if you have questions ask away.


As pauleckler mentioned, the FAQ section is very helpful:…

This whole bond/FI board is very interesting. As you look through posts of various Fools such as blacktreechaser, pauleckler, aj485, Arindam, etc you’ll see often varying but (in my view) very helpful perspectives.

Most of those that are familiar with or are experts in stocks and well as various forms of stock funds (mutual funds, CEF’s, ETF’s, etc) often start with bond funds when it comes to this area of investments. There is a difference between bond funds and individual bond issues. The FAQ covers a lot of it. I started with funds but gradually learned to appreciate the process of picking individual issues – or sort of creating my own fund – and have since bought and sold both funds and bonds. (I happen to do both funds and individual issues on the equity side as well.)

I think as you study material here and look at some books – we can make recommendations if needed – you’ll find that security analysis is… security analysis and much of what you may be doing with equities applies to bonds. (Although to be fair I’m not sure what your approach with equities is.) Sure, bonds can be issued not only by companies with publicly-traded common equity but also by privately-held companies, governments at various levels, government-owned corporations, utilities, etc. Perhaps some of the good first types of bonds to look at in terms of analysis and such after reading through the FAQ would be US Treasury and corporate bonds of major US companies. One thing that I like about bonds is that the issuer doesn’t necessarily have to grow or “hyper grow” to make it worthwhile for the investor… it just needs to survive enough to cover interest payments and have the ability to refinance or pay the principal some other way at maturity date.

I’ll leave it at that for now. Feel free to post questions here.

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