Starvid:
make sure the bonds are short term, so you have time to get out if the company/country that issued it starts looking shaky
And if everyone follows the same strategy, at the first sign of wobbliness on the part of the issuer there will be a sell-off and your bonds will lose more of their value. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
So, instead of a lottery you pretty much guarantee yourself a constant default rate.
And if everyone follows the same strategy, at the first sign of wobbliness on the part of the issuer there will be a sell-off and your bonds will lose more of their value.
Not a problem if you have short term bonds and hold them to maturity.
And in a parallel comment you want to receive coupon payments from the bonds which, if they have maturities not exceeding a year, typically won't pay coupons. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
It doesn't really matter if you recieve a coupon, or if you but the bond for less than you get back from the issuer, at least if the maturities are short (the bond fund I have has an average amturity of 0.15 years). Peak oil is not an energy crisis. It is a liquid fuel crisis.
an average amturity of 0.15 years
