Getting Going: How to Navigate the Fixed-Income Shoals
Financial security has rarely looked so unappealing.</br></br>Bonds and bond mutual funds are supposed to offer a comforting dose of certainty. You typically have an excellent idea of how much interest you will collect each year and what price you will receive when you go to sell.</br></br>But today, that virtue looks like a vice. Even the longest-dated Treasury bonds pay less than 5%. To make matters worse, many folks fear rising interest rates will pummel bond prices.</br></br>What to do? In this week's and next week's column, I will offer some pointers on how to navigate 2006's treacherous bond market and how to build a portfolio that should serve you well in the years ahead. Today's contention: The current worries are overblown -- and they certainly shouldn't dissuade you from having at least a portion of your portfolio in bonds.</br></br>Bonds may be unappealing, but stocks aren't much better. They trade at lofty price/earnings multiples and they pay skimpy dividend yields.