Apr 21, 2010

Bond Fund Investors Still Getting Hosed

Lunch with FrugalJR yesterday reminded me to pick up a thread. You were warned in an earlier post: Investing in bonds is complicated and mutual fund managers routinely misinform middle class investors about how funds work. Now the Wall St. Journal confirms the validity of that warning. Investors are misled by mutual fund companies misrepresenting "short-term" bond funds when, in reality, the fund managers invest in securities with maturities over 10 years! Frugal Ben Says: For your country: Pressure your politicians to create more transparency and stronger regulation of the financial industry! For your family: Meanwhile, be vigilant and invest only in products you understand. Even at low rates of return, CD's - safe investments precisely because insured by your federal government - should still be part of a conservative investor's financial plan.