Bonds bandwagon peer pressure

FOX TOLEDO NEWS - "But everybody's doing it..." buying into bond funds that is.

Studies show that many have flocked to bonds for safety after losing money in the stock market.

Bond funds offer a fixed interest rate and may be backed by the government, municipality or corporation that offers the bonds.

Investors might feel more secure knowing how much of a return to expect (the interest rate stated) and for how long the money will be tied up, (the maturity date of the bond.)

But just because it's laid out for you to see, doesn't mean it's a good deal.

For example, 10-year government bonds pay about 2.5-percent, but you have to knock about 25-percent off those earnings to account for fees.

So, the best you can earn is less than 2-percent, even less if interest rates go up, as they're expected to.

So consider this: Stocks are the cheapest they've been since the 1980s.

And what's the basic rule of investing? Buy low. Sell high.