In 2008 international isnt doing as well as domestic.
This is a turnaround from the past several years.

The moral is not to focus on just one asset class
because you never precisely know the winners and losers.
The other cliche is that past performance is no guarantee of
future performance.

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- quote -

something along these lines to consider, depending on what you want
the 48k for, and when in 2009 you need this money-

Each month open a 12 month CD of 4k. Each month in 2009 you will have
a CD maturing. When you open each CD you will lock in rates available
for that month.

Maybe it makes sense to open 7 month or 13 month CDs instead, or in
Feb open a 13 month, March open a 12 month, April open an 11 month...
so all 12 CDs mature the same month.

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On Feb 21, 5:35*am, Shhhh <trumpet1...[at]comcast.net> wrote:
- quote -

I would look at spectrum income, if you can stomach a 20-80 fund. The
yield is good, and it owns both bond funds you mentioned, plus many
others.

disclaimer- I own this fund in my Roth and Rollover accounts.

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"Shhhh" <trumpet1120[at]comcast.net> wrote in message
news:d2a66e3a-8e21-4d13-9e82-f2c85b58ce71[at]m23g2000hsc.googlegroups.com...

- quote -

I think that the phrase "this environment of lowering interest rates"
suggests that although you may not realize it, you are trying to engage in
market timing.

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On Feb 21, 2:35*am, Shhhh <trumpet1...[at]comcast.net> wrote:
- quote -


Bankrate.com shows many banks with above 3% MM acct. rates.

If you already own a bond (not bond fund), if the interest rate goes
lower, the price of your bond is likely to increase. The relationship
between interest rate and bond fund prices are not so clear cut.

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Shhhh wrote:
- quote -

Bonds and "bond fund" are not the same type of investment, don't confuse
the two.

-Mark Bole

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Shhhh wrote:
- quote -


Unless the funds you're looking at hedge currency risk, that type of
fund adds another layer of risk -- you're at the mercy of variations in
the value of the US dollar. Recently this risk helped the performance of
(unhedged) Int'l bond funds because the dollar has fallen:
http://research.stlouisfed.org/fred2/series/TWEXB
The falling dollar boosted the returns of bonds denominated in foreign
currencies, for a US investor. The opposite happens when the dollar
gains in value, so you could see losses larger than the interest earned
during the year and most people don't want that for 1-year investment.

The other issue, assuming you're buying high-grade bond funds (not junk
or emerging-market debt) is the term of the bonds. Bonds of longer
maturities are subject to potentially large price changes when interest
rates change. For one-year money, where your goal is simply to do better
than a savings account, the closest match would be a currency-hedged
international bond fund with very short maturities (one year or less). I
know of an institutional fund managed that way but it's kind of unusual.
Realistically, you're not missing much - this type of fund should not do
much better than a comparable dollar-denominated investment.

Because you're not investing a lump $48,000 now, but rather $4k over 12
months, any additional yield will have a relatively small impact on the
value at the end of the pipe. If you really need all the money in a
year, is it worth the downside risk?

-Tad

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"Shhhh" <trumpet1120[at]comcast.net> wrote
- quote -

For investment grade bond funds and in general, yes. For
international and emerging market bond funds, no. When you
go overseas with bonds, then generally you are taking on
much more risk and volatility.

You need to decide if this move alters your asset allocation
plan so much that it is undesirable. Going from low risk to
high risk will not be a free lunch. You have to be prepared
for more swings, both in yield and principal, when you
switch from cash to overseas bonds.

A chart that introduces one to this reality, from the late
1980s to the present:
http://finance.yahoo.com/q/bc?t=my&s...=m&q=l&c=vbmfx

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In article
<d2a66e3a-8e21-4d13-9e82-f2c85b58ce71[at]m23g2000hsc.googlegroups.com> ,
Shhhh <trumpet1120[at]comcast.net> wrote:

- quote -

Also, increasing yields typically mean an increase in risk. How
much of your investment are you willing to lose? 5%? 1/3? And
do you really need it in the one year timeframe? What the dollar
makes a huge run just after the new President takes office and
your international bond fund tanks?

-john-

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In this environment of lowering interest rates does it make sense to
park cash in an international bond fund?

I have roughly $4000 a month I need to save for the next year. so I'm
wondering if it makes sense to invest in an international bond mutual
fund, and earn more than a plain jane savings account.. I want to earn
more than 3% interest, because by the end of the year, in a savings
account it'll be much less than that.

So I'm looking at International bond funds like TRowe Price's
offerings. They have 2, and international bond fund, and an emerging
market bond fund (which offers significantly more yield than any us
savings account)

What do you folks think? Is this a good idea? Am Icorrect in stating
that lowering interest rates causes bonds to increase correct?

Thank you

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