A.I.M. Users Bulletin Board

[lostcowboy]

Hi Toofuzzy,
1)While the stock price is high, would be the best time to issue new stock, for the bond fund. If they keep the new money in cash, or short term bonds, then if interest rates go back up, the bond fund price will not change as much as if they had not issued new stocks. This is their way of re-balancing the fund. Once they think interest rates are topped out again, then they should take this money and buy long term bonds.

2)First, if they think that interest rates are as low as they will go, they should be selling all their high interest rates long term bonds now for a premium. With the extra money, they would ether go to cash or short term bonds. Two, they may not be able to keep the pay out the same.

3)If rates go up then the stock price goes down, The price of the bond fund should be what you would get if you sold all the bonds today. Note if this is a closed end fund the price can very some from the NAV.

PS: How goes the Synchrovest?