Besides reading boilerplate descriptions of where such funds fall on
the risk spectrum, take a gander of recent performance of various
categories here... read it and weep at the horrible performance of
even some of the short term categories, or safe havens like inflation
protected:

http://news.morningstar.com/fundRetu...ryReturns.html

Don't necessarily jump into the recently better performing ones before
considering they have gotten the benefit of a rush to quality, which
is a cycle that may reverse and bleed money itself. What I am doing is
using ETF's mostly which I can bail out of fast, like if t-bills lose
their glitter... or quickly into, like high quality corp bonds which
have been modestly hit and look ripe for recovery.

Sam wrote:
- quote -

Sam, a good answer to this would require a very long post...Vanguard's
prospectus for their bond funds has a good explanation of the different
types of risks associated with bonds generally, and with each fund
specifically. Their marketing materials on the funds have more info as
well. Perhaps if you review that you'll get answers to most of your
questions and can post some follow-up Q's.

-Tad

I have never invested in bonds or bond funds but I am trying to work
on my asset allocation and I think I need to add bonds to my mix. I do
not intend on being a bond trader so I am concentrating on bond funds
and my investment accounts are with Vanguard so also focusing on
Vanguard bond funds.

My questions are fairly broad:
1. Other than the yield what do I need to look at when evaluating bond
funds?
2. Is there a need to divisify among bond funds or are the bond funds
sufficiently diversified so that I can put all my bond money into a
single bond fund? Currently I only have about $8k to invest in bonds
so we are not talking about big dollars.

Here are the particular Vanguard funds I have been looking at, but
this is just based on looking at the year to date yield and the "since
inception" yield. I do not know what other criteria to use.

Short-Term Treasury (VFISX)
Intermediate-Term Treasury (VFITX)
Short-Term Federal (VSGBX)
Vanguard GNMA Fund Investor Shares (VFIIX)
Vanguard Total Bond Market Index Fund Investor Shares (VBMFX)


Can anyone provide suggestions on how to evaluate bond funds so that I
can make an educated decision among the bond funds offered by
Vanguard?


Regards,

Sam