I wish we had a "crying" icon --- I'd start with that for you....
Corporates and Munis generally pay interest every 6 months... and YES -- on the maturity date (or before) you get your capital back. When I say "BEFORE" - most bonds are "callable"... so at some date the issuer can "call" your bond and cash you out. Sort of like if you re-fi your house - you pay off the high interest note and re-fi it with a lower interest. I've had bonds called away before. A couple times -- they've paid more than the face value... but then you give up your high interest rate and now have to buy something else that's paying the current lower rate... but that's the way these things work.
Mutual Funds equal a jackass throwing darts at a dart board.... it takes hardly any work to beat their performance - because you can AIM -- and they just buy "stuff" that fits their predetermined scope... There are good ones -- but most are just so friggn' ho hum that they do more harm than good.
By the way - you state your MF was in a "tax free account".... by that I think you mean that it is in a TAX DEFERRED account such as an IRA/401? These accounts have no taxes due UNTIL you start to withdraw...
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Originally Posted by lmnop
Hi Greg
Thanks again for all the info. I have a rookie question for you that may have covered already. When you talk about the interest on a corporate bond of 10% it is paid annually correct? And then you get your initial investment back on the maturity date? And is this the same for Muni bonds? On a side note I have a mutual bond story when I was 21 I had 18k invested in a tax free account. I am now 38 that mutual bond is now worth 21k and some change. That is why I have stayed away from the stock market; I figured if the “pro” heading up the mutual fund can’t get it right what hope do I have.
Ray
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