- quote -

I'll look as I have at everything else. Thanks.

- quote -


This is great to know since I have just been watching the REITs and
they seem to be returning unbelievable results. Paying out capital to
maintain earnings is a pretty good explanation at least in part.

How about something like a Fidelity Fund, FINPX ( FIDELITY INFLATION
PROTECTED BOND FUND). 1 year return is 7.76. Anyone have any
knowledge of this type of fund that I can't easily read on a
prospectus?

Thanks much,

Mike

Caroline wrote:
- quote -

Good catch! I forgot they changed that last year.

-Tad

"Tad Borek" <borekfm[at]pacbell.net> wrote
snip
- quote -

Nit: It's now one year for both EE and I bonds.

See question and answer 2.4 at
http://www.publicdebt.treas.gov/mar/...restronredempt

Michael Grinnell wrote:
- quote -

Michael, what about good ol' savings bonds? Either I-bonds, whose rates
are adjusted for inflation, or EEs, whose rates are tied to 5-year
Treasury bonds. They're cheap and easy to buy, and can be redeemed as
early as 6 months from purchase (though there's a small penalty for
early redemptions). Lots of information available at:
http://www.publicdebt.treas.gov/sav/sav.htm

- quote -

Keep in mind that REITs are much more volatile than short/int bonds - a
bit more like stocks in that regard. Though I think they fit in nicely
in a longer-term portfolio, I'd be wary of buying them for such a short
window, unless you're willing to accept the risk that you'll sell back
for a lower price.

About three years ago, REITs as a group were priced at a level below
that of their assets, and paid a nice yield, so they looked like a
bargain. Currently that's flipped - they're priced above the value of
their assets and yields are quite a bit lower (some REITs are paying out
of capital, rather than earnings, to maintain their dividends). This
isn't surprising when you see all the "for lease" signs out there. You
can find some exceptions and of course it could pay off, but I see this
sector as risky for an investor looking to cash in as soon as 3 years
from now. The yield will be higher, but you might sell at a loss, so
bear that in mind when allocating dollars.

-Tad

- quote -


Unfortunately, according to the document, this is not available in
Puerto Rico or Minnesota. I am in the latter. I'll read the fine
print, but in the meantime any other ideas?

Thanks,

Mike

A suggestion could be a no surrender charge annuity, The Hartford has and
the prospectus is at
http://www.hartfordinvestor.com/prod...055507234.html


"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0401141103.4d204ca7[at]posting.google.com...
- quote -

"Michael Grinnell" <msgrinnell[at]charter.net> wrote
- quote -

I am not acquainted with (the software program?) RiskMetrics although from the
context above I have a good guess about what it does. Do tell more.

I draw a huge distinction between bond funds and individual bonds, particularly
in the current economic climate. I personally do not recommend a bond fund for a
known, short period of time like 3-5 years, unless it's part of a very diverse
short-term portfolio. Others may differ on this point.

Hopefully the thread length will increase with input reflecting more diverse
sources.
snip
- quote -

In the last two years, I have had good experiences with two electric utilities,
so taking your experience into account too, I think I would start by looking for
an electric utility index and study its history before rejecting them
altogether. Then I'd research good metrics for electric utility financial
strength and see if anything is appealing.

AEP is yielding about 4.5% right now. This seems a typical high yield for an
electric utility. This is very hard to beat, either with other stocks (where I
think the average yield is between 2 and 3%), or with 5-year high grade bonds.
But as you know, the risk is higher.

I suspect you know all this already. Just adding my somewhat different opinion.
:-)

snip
- quote -

Can't help on Loan Participation Funds but will look forward to further
discussion of these.

Re REITs, I found the following Jan. 2 article interesting:

"Can REITs Repeat Results?"
http://personal.fidelity.com/myfidel...ty.members.fid
elity.com:80/investorsWeekly/cms/null.dyn?keyword=null

(If the link fails, I can email you a copy of the article.)

"Rich Carreiro" <rlcarr[at]animato.arlington.ma.us> wrote in message
news:m31xq2iaza.fsf[at]animato.home.lan...
- quote -

Yes, that's the way banks and credit unions do it here. I have elderly
friends who have the monthly interest automatically deposited into their
checking accounts.

Elizabeth Richardson

"Caroline" <caroline10027remove[at]earthlink.net> writes:

- quote -

Maybe it's a regional thing? Up here in New England, pretty much everything
from megabanks (like Fleet) to 5-6 branch outfits (like Bank of Newport)
allow interest to be withdrawn at any time. Heck, they'll even mail you
a monthly interest check if you want it.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

- quote -

No. Have about 30% equity in my house and a 15 year fixed mortgage so
no PMI, either.

- quote -

No, I am in no rush to retire, but I will be 65 in 28 years. Kind of
like my job now.

- quote -

At present with my two children, wife staying at home, and assorted
expenses I am able to max out my and my wife's Roth IRAs, put away
300/month in each of my kids' 529 plans, but only get about half the
max for my 403b at present.

- quote -

Not particularly.

- quote -

Yes, although what were are 'talking' about is counting as a backup to
the emergency fund. This pot of $$ I am setting aside for expenses
such a new car once the wheels finally fall off my current vehicle,
re-shingling/re-siding my house when it finally needs it and other
assorted projects that are elective and may be pushed off to whenever
I feel like doing them. The bulk of the proceeds came from the gains
on the sale of house. There's about 18K to invest right now. I
anticipate my current vehicle to last between 3 and 5 more years and
it is paid for now. Worst case scenario here is that I would have to
finance a new vehicle if the investments were not looking as good as I
had hoped at the time. Sometimes I wonder if this is a decent plan or
whether I should just take all this and shove it into my 403b and
worry about paying for these things once the time comes. I realized a
long time ago, however, that borrowing is always more expensive than
not, especially when I can use the money for an extended period
before.

"Rich Carreiro" <rlcarr[at]animato.arlington.ma.us> wrote
- quote -

Hm. I'm accustomed to a pretty stiff penalty for withdrawing interest on a CD
before maturity. I just did a quick google skim and it seems to back up my
claim. Maybe there are exceptions out there.

Either way, perhaps better wording would be, "the full yield of the CD will
result only if one does not touch the interest or principal until after
maturity."

- quote -

I have had some in an an intermediate bond fund in the past, but
perhaps someone can explain to me why on RiskMetrics if I put this
into my portfolio, the intermediate bond shows up as having a
sub-optimal return for the risk involved. This is particularly
confusing when the risk/return for both a REIT and Loan Participation
fund are better than expected and my actual return in the past has
always been better for the intermediate bond fund.

- quote -

I am in a relatively low tax bracket so tax issues really don't give
me much of a boost.

- quote -

I've heard about this before, but have never looked into it carefully.
Will have to do so now.

- quote -


- quote -


I had a couple hundred shares of AEP for years and years (gift from my
grandparents) and that stock was the biggest dog in the world. They
recently cut the dividend in half from $0.60 (which was the only thing
going for it). That prompted me to get rid of it. Therefore, I am
pretty wary of utilities.


- quote -


Again, thanks for the lead. Before I ask questions I'll look at the
site.


- quote -

I can live without touching the principal, but I am less risk averse
than CDs. I also don't want to get locked into something I can't
change for that long if the situation changes and something else looks
more attractive.

- quote -


I am a strong believer in diversification so I am shopping for good
options to fit into such a portfolio. Thanks for the ideas. I would
really like some insight on REITs and also the take on Loan
Participation funds. Are these at all appropriate for someone with a
3-5 year time frame?

Mike

Question:

Are you buying a house?
Is the 3-5 year term until you retire?
Do you already have a longer term portfolio?
How liquid does it need to be?
Do you have an emergency fund?

Your answers will point out where the best options will be.

"Michael Grinnell" <msgrinnell[at]charter.net> wrote in message
news:237a8ae7.0401131922.66f118c6[at]posting.google.com...
- quote -

"Caroline" <caroline10027remove[at]earthlink.net> writes:

- quote -

Most CDs I've seen let you withdraw any amount of accumulated
interest at any time without penalty. So I don't see the point
of the "...or yield" phrase above.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

Investment grade (that is, non-junk) new issue corporate bonds of 3-5 year
maturity were recently paying about 2.5% to 3.8%. New issue bonds don't usually
have a commission fee.

Muni bonds are likely similar after taking into account the tax break.

Treasury Notes are yielding about the same; maybe a bit lower than corporate
bonds, but one should check this. See www.treasurydirect.com . No commissions if
you open a free account at Treasury Direct.

Non-jumbo CDs from www.bankrate.com are yielding about the same. No commission
fee but be wary of other fees a bank may impose for the service of keeping your
account for you.

If you want more risk and quite possibly higher yields, consider electric
utility stocks. Good yields especially if one counts the new dividend tax break.
But there will probably be a commission fee.

Poster R Wink mentioned www.quantumonline.com (Income Tables, Exchange Traded
Income Securities) a few weeks ago. It (and no doubt other sites) lists various
high income, low risk hybrids. These are traded on, for example, the NY stock
exchange but typically (always?) pay interest (not dividends). Many are rated
the same way corporate bonds are rated, so one can get perhaps a better handle
on the risk as opposed to guessing what an ordinary electric utility stock will
do in five years. Registration is free at the quantum site, and I found it
user-friendly. Again, there will probably be a commission fee.

If you absolutely want the principal back intact and can live without touching
the principal or yield for a certain amount of time, go with CDs. If you want to
enjoy the yield during the 3-5 years but again want virtually no risk, go with
Treasury Notes. If you want a bit more risk and again would like to enjoy the
yield during the 3-5 years, add some investment grade corporate or muni bonds.
For comparable or perhaps a bit more risk, I would say then go to the hybrids.
Lastly, turn to the electric utility stocks. Or mix all of the above to achieve
diversity and thus optimize yield and risk, but at less guarantee of getting all
the principal back then having only CDs or Treasury Notes.

"Michael Grinnell" <msgrinnell[at]charter.net> wrote
- quote -

List,

If someone were to be putting funds away for a purchase 3-5 years in
the future, what would be some ideas for places to be putting these
funds? I have looked at older postings and while informative, they
are a little stale given current economic conditions. I have looked
at a REIT as a pleasant, low-cost way to diversify a little more, but
they have all gone so high in the past few years I am very wary of
buying high and watching the air leak out of my balloon.

Thanks,

Mike