December 12, 2008
Generally, the goal of a bond etf is it's dividend payouts and not it's share value. Bond etf's can increase/decrease in value during market volitility or simply because. Have a look at prices for the bond index etf and look at the historical dividend payouts. You can then calculate an estimated income. This income is taxed at a lower rate too. You can also re-invest this income.
Just be cautious though. Buying an etf has it's risks with the market compared to a straight savings account with a guaranteed principle.
You can accomplish something similar to this in a bond mutual fund too. ETF's are generally cheaper on the MER and do not have a back/front load. You still have to pay a brokerage fee though.
I would recommend a savings account for short term money requirements, but bond's should have their place in every portfolio.
Here's the link I was trying to send you.
February 3, 2009
Generally, the goal of a bond etf is it's dividend payouts and not it's share value.
IT'S = IT IS. Your sentence actually means "the goal of a bond ETF is it is dividend payouts and not it is share value", which makes no sense.
Bond etf's can increase/decrease in value during market volitility...but bond's should have their place...
Pluralization in English is never done with apostrophe+s. If you know the plural of requirement is requirements, why don't you know the plural of bond is bonds? The plural of ETF is ETFs. And ETF must be capitalized.
"Volitility" is spelled volatility.
February 3, 2009
Haha you're kidding right? You're giving me English lesson in an investment forum?
Try doing something more constructive Mr Wong, like your opinion on this topic!
Where is this hostility coming from? If I made as many mistakes as you, I'd thank the person who points them out to me. See it as a favor, not an attack. And I think you should thank me for showing you your mistakes, because if you learn from me, you are better off, and if you don't, you can't possibly be worse off. I didn't get around to comment on bonds, because the grammatical mistakes are so egregious that they deserve more attention than bonds.
Having taken another look at your message, I'd point out that, because bond funds (mutual funds and ETFs) don't pay income tax, income from bond funds is taxed as interest in the hands of unit holders. Dividends from taxable corporations have already been taxed, and therefore are taxed as dividends in the hands of shareholders. At year-end, bond funds may distribute capital gains (which are taxed as capital gains); otherwise, all income from bond funds is fully taxable as interest.
Also, there is no dividend reinvestment for ETFs, only for mutual funds.
I don't like bond funds because they can have losing quarters and even losing years. And I have neither the patience nor faith to ride out losing streaks. Kevin O'Leary and Suze Orman say, why buy government bond funds when you can buy the bonds yourself? Marc Faber says government bonds are the best short.
Edit by admin: We certainly appreciate you sharing your experiences, but please only post the same things once. See here for Binky's post.