Another group of securities that haven't been fairing well lately is the closed-end bond funds.
Typically, bond funds do well when the stock market is falling and interest rates are going down.
Credit-related panic selling, though, has driven the price some quality shares down 8-10%.
Will the credit crunch adversely affect these holdings?
I don't think it will.
There are closed-end funds with attractive portfolios of bonds that can be purchased for less than the underlying costs of the bonds themselves.
For instance, a sovereign government fund isn't going to be adversely affected by the sub-prime mortgage situation, yet these shares have been sold-off just like everything else.
But they continue to pay their dividends and have yields over 6%.
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