Is now a good time to invest in the bond market?

[computerwiz56@rocketmail.com]

I'm considering investing in the bond market. Should I buy now or wait until the debt crisis is over? If the government defaults, I'd take it that a short term bond crash would occur. If that happens, would that be a good time to buy?

[JoeyV]

Interest rates are very low and the government has just stepped away from buying hundreds of billions in bonds. This is a terrible time to put money in the bond market.

[MrTradewell]

You are probably correct about US government bonds, not corporate but that is just my opinion. Additionally, NO one has a full time working chrystal ball so, no one can tell you what will actually happen. Remember, interest rates on US bonds have been coming down for 30 years. Now, government debt Worldwide appears ready to default. Bonds can only go down.

In my opinion, if debt implodes Worldwide all bondholders (savers) will loose and capital will again become very expensive.

[John W]

It isn't clear that the debt ceiling issue would result in a short term buying opportunity. The US has never defaulted before, the debt ceiling has been raised 76 times historically, often twice in a year. Even if the debt ceiling isn't raised, the bonds would just be derated to AA from AAA, the UK survived that just fine in the Thatcher years. As a percentage of the GDP, the national debt has been higher in the post war 40's. If the ceiling isn't raised, the government is likely to default on everything else before the bonds in order to preserve as many jobs as possible so everything from road works, to social security payments to the paychecks for soldiers will default before the bonds do. If it does take a dip, it might be worthwhile to rebalance your portfolio into the dip. Bonds should not be considered by themselves as an investment but rather as part of a portfolio, a portfolio of 25% stock and 75% bonds actually has less risk than a portfolio of 100% bonds so it's always a matter of rebalancing the portfolio to take advantage of major market events not a matter of whether or not it's a good time to buy.

[Rogue]

Consider junk bonds.
They pay much higher interest.
Vanguard Corp. bond fund is one with low cost and monthly dividends.