Oh I've warned about this many times -- how you can lose money in "safe" bond funds. I'm about to write another column. The basic principle is that when interest rates rise, bond prices FALL! All bonds, even the top-rated bonds, lose value if rates fall. That's because investors with cash can buy new, higher-yielding bonds -- so they don't want to pay full price for your old, lower-yielding bonds! The funds are liquid, yes. You can sell at any time. But that doesn't mean you get ALL your money back! Only a money market fund guarantees that. Sadly, they don't pay much interest -- but you can't lose money there!