The other fund in the top five was AXA Rosenberg Value Market Neutral. Given the possibility of inflation, the problems now inherent in Social Security, and the general insecurity and cyclical nature of a free-enterprise economy, you will need to continue to take equity risks. But if you already have or are near acquiring a suitable nest egg for retirement, you should give greater weight to fixed-income investments than you might have just a few years ago. It is a matter of allocating your investments to achieve the best reward commensurate with acceptable risks. In the September issue, Sheldon also highlights the advantages of no-load bond funds over individual bonds.
Bond funds do have several advantages.
They pay dividends monthly, not semi-annually as is usually the case with individual bonds. You can achieve proper diversification with small purchases. You benefit from the low commissions funds pay to buy and sell bonds. In some cases, professional managers can buy more desirable issues than can small investors. Finally, we would recommend buying only investment-grade bonds individually.