Here's an article on bond funds. Only you & your DH can determine if a fund is right for your circumstances.

/tricia

Here is a link that might be useful: Smart Money - Bond Funds

Thanks Tricia, I printed it up for him to read.

Everything was so simple (it seemed) 2 years ago. Now, forget it!

Jane

When interest rates are low, usually the payout offered by an annuity is low, as well.

Once an annuity is bought ... that rate continues throughout its life.

Some say that interest rates will remain low, but I don't think so. Your country has been printing money like it's going out of style ... plus, carrying huge debt earlier, is going much more heavily into debt, and it looks as though these bailouts aren't nearly over.

Which leads one to think that the value of the dollar will shrink, and would-be borrowers, including the government, will need to offer major incentives in order to induce(seduce?) potential lenders to free up their money ... which usually amounts to offering higher interest rates ... you know what rates junk bond borrowers need to pay.

I've just been reading an article about a financial advisor who appears to have some qualifications who, when asked how long one should carry a certain type of investment, similar to a bond, if I remember correctly, said that it should be about as long as one held a grenade between the time that one pulled the pin and threw it.

Actually, one can hold it for some time, safely - just as long as one holds the lever down by hand that the pin secured in place previously ... just be careful not to relax your grip, so that the lever can't spring up, unnoticed.

Good wishes for making choices regarding your assets that you'll continue to be pleased with, later ... and later ... and later.

Many say that quality stocks are on sale.

They may be on fire sale later.

But for money that I don't figure to need for the next five years or so, I think that it's wise to put at least part of it into well-chosen equities.

Not bought in big chunks at a time, though ... unless one can be sure that that time is the bottom of the market!

Having celebrated my 80th birthday earlier this year, I'm about 80% invested in equities ... but there's a major proviso: living fairly frugally (I spent much of 10 years helping refugees with nothing get back on their feet) I live on less than my pension income ... so you could make a good case for claiming that my invesments are sort of like play money, not the kind that I depend on to put bread on the table in the near future.

ole joyfoul

Hi again, jane of N Y,

Sorry - I meant to add a link to a story about the financial advisor that I referred to (some of whose articles a colleague in an investment group that I attend sent to me).

ole joyfoul

P.S. If you want some bonds ... why not buy some directly, thus avoiding the commission and the management fee that the fund managers charge, eating up a substantial portion of the earnings.

o j

Here is a link that might be useful: Story about Donald Coxe, financial guru (some claim)

"Now the financial person at our bank (Chase) talked us into putting (what's left) of our 401 into a Bond Fund which will pay a fixed amount each month. There is a upfront, one time fee of $7,400.00. We will receive $2,100.00 a month."

Your not alone. A lot of people are struggling to find safe investments that pay a decent dividend.

Here is a link to another article (that talks about bonds) that may be useful:

FDIC-backed bank bonds: Too safe?
www.bankrate.com/dls/news/investing/
20090227-FDIC-backed-bank-bonds-a1.asp

One more thing.

JP Morgan Chase has a bank rating of C (hold). I don't know what kind of bonds are in the fund you invested in but I would be cautious about using any bank that has this rating. Here is an excerpt from a German publication that talks about the dangers of having your money in a bank that could be in trouble.

"Financial Crisis Caused by a 'Culture of Complicity'

Manager Magazin: Professor Galbraith, you suggest that banks that suffer from bad assets should simply be declared insolvent, instead of rescuing them with taxpayers' money. Why?

James Galbraith: We need a correct assessment of the degree of losses suffered by a bank which is functionally insolvent. But as long as the old management is in place, there are no incentives to cooperate in the evaluation you need to make. That's the first problem.

The second problem is: When a bank is insolvent, the incentives for normal banking practice disappear. They become perverse. The incumbent management has good reason to gamble excessively and to make capital losses. This is because it appears that the regulators could soon close down the bank.

Beyond that, if the situation for the bank is truly hopeless or if the management is truly corrupt, then the incentive is to loot the institution, to take as much money out of it -- e.g. in the shape of bonuses and dividends -- before the true state of the books is discovered.

Links that may be useful:

Rate your bank
www.thestreet.com/screener/index.html?src=ratingsindex&tab=3

Financial Crisis Caused by a 'Culture of Complicity'
www.spiegel.de/international/business/0,1518,614297,00.html

'O FOR OLD, D FOR DUMB'
How German Seniors Lost Nest Eggs in Lehman Collapse
www.spiegel.de/international/germany/0,1518,613102,00.html

dreamgarden,

"JPMorgan Chase has a bank rating of C (hold)."

The OP is not wanting to purchase stock in JPMorgan Chase. So, thestreet.com's rating is not relevant to her circumstances.

The bank rating that's important is its CAMEL rating & those are never released to the public. They are known only by the institution's executive management & the regulators.

Bankrate.com provides a rating similar to the CAMEL but it should not be confused with the official rating. It's just another analyst based review. Bankrate.com then assigns a Star Rating to each institution.

Bankrate.com gives JPMorgan Chase a **** rating...pretty darn good.

An investor who might purchase stock has a different criteria than a person looking for a depository institution.

Note: "Chase" is the consumer & commercial banking division of JPMorgan Chase.

/tricia

Here is a link that might be useful: bankrate.com

U.S. stocks are on sale.

They may be on fire sale later (maybe not) but folks who love to shop for bargains should consider some of the high quality ones, now ... or after while.

They're different from consumer goods - most pay a benefit, annually. And may well increase in value, over time.

Many consider that, considering the massive U.S. debt, much of it held abroad, a major portion in China, and the huge current deficit, considering the costs of the Iraq adventure, and the large bailouts, with more to come, plus the major printing of money, that the U.S. Dollar is likely at risk.

In such a situation, quite a number feel that it would be a good idea to hold part of one's assets denominated in the currency of at least one other country, possibly of several.

US$1.00 buys CA$1.25, these days.

Can I interest you folks in some Canadian bank stocks?

A recent evaluation by a respected international agency considers them about the strongest in the industrialized world. They are heavily regulated, were carrying most of their own mortgages. Some were rather heavily involved with the U.S. financial fiasco, but some were not. One that was not has taken a fairly heavy battering, along with the others and I think is good value now.

They are paying from 5.6 - 8.7% dividend and many think that there is but slim risk of them cutting them.

On the other hand ... how about an oil or gas pipeline? They've held their value reasonably well.

Or some oil and gas stocks? Canada is the U.S.' largest out-of-country supplier of petroleum ... when you pay high prices at the pumps ... it doesn't hurt so much if you own some oil stocks.

Some, agreeing to pay most of their income in order to avoid tax liaility, have been paying about 15%, but with lower oil prices may likely cut their payment levels ... and are required to reorganize in a couple of years ... but many feel that they may lower their payments only slightly, then.

Good wishes for incresingly skillful use of your income and assets.

ole joyful

Thanks all. Very confusing and as a result I probably made a mistake by pulling out of the Fund. It was a fund of over 1500 different municipals and some high rated corporate funds. I felt the cost was too high to get in but I am hearing that is a normal amount. None of the bonds were JPMorgan (as far as I could see). Too many to keep track of.

I think we'll have to go to one of those places like Schwarb to figure this all out.

Thanks for the good information
Jane

tricia-"The bank rating that's important is its CAMEL rating & those are never released to the public. They are known only by the institution's executive management & the regulators. Bankrate.com provides a rating similar to the CAMEL but it should not be confused with the official rating."

Should not be confused with the 'official rating'?

If the Bankrate.com site doesn't provide the REAL rating then why did you direct the OP to a link that isn't accurate?

"Bankrate.com gives JPMorgan Chase a **** rating...pretty darn good."

In Aug of 08', Consumer advocate Clark Howard, reported that before IndyMacâÂÂs failure, it was a pretty loosely held secret within the banking industry that IndyMac was facing severe financial trouble. Up until the day that IndyMac closed its doors, it had a âÂÂSuperiorâ rating according to BankRate.comâÂÂs âÂÂSafe & Soundîâ rating system.

Thanks again, for reminding those of us who are being asked to subsidize corrupt, failing banks, that only privileged 'insiders' are allowed to know this most vital information.

No, dreamgarden. You're not understanding. The CAMEL rating & an analyst's rating are different animals. You provided a rating commonly used to evaluate investment potential in a company (financial institution or otherwise). It's not unreasonable at all for someone to consider a financial institution safe as a depository but still not want to be a shareholder.

"Thanks again, for reminding those of us who are being asked to subsidize corrupt, failing banks, that only privileged 'insiders' are allowed to know this most vital information."

Dreamgarden, (sigh), a financial institution's CAMEL rating can be influenced by anything from a short-term absense of a CFO due to sudden illness or it could be affected by something more of a systemic issue. It's a snapshot in time.

Here's a good balanced discussion of CAMEL ratings from the Federal Reserve Bank of San Francisco.

Bankrate.com provides, as I said, a similar rating but it doesn't include information known only to executive management & the regulators.

The point of my post was to highlight the different types of "reviews", their meanings, & the typical useage of each.

/tricia

Here is a link that might be useful: Federal Reserve Bank of SF - CAMEL