AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Question My absolute investment periority is preservation of nest egg.I hold Vang 28 with is corp. bonds of many ratings. Now I notice Vang 83 is all treasuries. Is that word some sort of magic omen /guarantee that my money is safer than in such as Vang 28? Same question for other funds.
Or even outside of funds?
Bill Kiewel
Answer Dear Bill:
Treasuries are not only safer; they are more liquid--easier to buy and sell.
But if you're focusing on safety, you must also look at bonds' maturity. The shorter the term, the safer. The longer, the riskier. A general bond fund, like Vanguard Bond Index, will have an intermediate-term maturity.
For the greatest safety, look for a short-term Treasury fund - which Vanguard does offer. But your return will be paltry.
In general, you may find that a little risk is acceptable. I myself alway buy corporate-bond funds rather than Treasuries because they pay a higher yield. I'm not worried that a bunch of major U.S. corporations will default on their obligations.
