Ask Terry Questions Bond funds

Bond funds

By Terry Savage on April 25, 2023 | Investments

Hi Terry, I put $20K (2 x $10K) of “chicken money” into Bonds a couple of years ago, looking for a relatively safe investment since interest rates on my AMEX Personal Savings account were relative low back then. *Advise from financial advisor.
Cost basis => Current Worth
AIBAX – Intermediate Bond Fund of Americal CL A – 10,334.54 => 9,233.70
ANBAX – American Strategic Bond CL A – $10,399.71 => $8,945.86

I’m also looking to pay for college tuition (for my son) and am debating on whether to start cashing out these bonds starting with worst performing bond or taking money out of AMEX savings (which is about 3.5% or more).
From what I’ve learned, bonds don’t have much of a future. So should I take the loss now or just wait it out.

Terry Says

Well, at least someone got rich on this deal. The “advisor” earned a fee. He/she obviously had no idea how bonds work. Nor did you!
Read this: https://www.terrysavage.com/beware-of-bonds-2/

It explains why bond prices fall when interest rate rise. Now that rates seem to be coming down, you may recoup some of your losses.

I wish you had beensaving for college in a 529 plan. I have no idea when your college needs start, or your total investment picture.
One thing for sure: Do not listen to that”advisor’ again!

money

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