I've been investing for the past 20 years, but mostly equities. Now in retirement, I'm looking to "stabilize" my portfolio with bonds.
I've looked at some bond ETFs (ZAG, XBB and others) they offer some okay yields, but my question is to whether buy bond ETF or single muni bonds?
If I buy a 2-3 year muni bond for an avg yield of 3% (if I'm lucky to find it!), the reasoning is that at maturity I am (quite) certain to get back my capital +interests.
On the other hand, if I follow the ETF route, what will happen with its value in 2-3 years from now? I could go up a bit, and down also. So, I may (or may not) lose some of my capital.
What's the argument of going with an ETF insteal of a "regular" bond? Beside the fact that the ETF could be sold anytime and that you must keep the bond until maturity.
I don't get it!
I've looked at some bond ETFs (ZAG, XBB and others) they offer some okay yields, but my question is to whether buy bond ETF or single muni bonds?
If I buy a 2-3 year muni bond for an avg yield of 3% (if I'm lucky to find it!), the reasoning is that at maturity I am (quite) certain to get back my capital +interests.
On the other hand, if I follow the ETF route, what will happen with its value in 2-3 years from now? I could go up a bit, and down also. So, I may (or may not) lose some of my capital.
What's the argument of going with an ETF insteal of a "regular" bond? Beside the fact that the ETF could be sold anytime and that you must keep the bond until maturity.
I don't get it!