Cents and Sensibility


Saturday, November 10, 2001

Telephone bonds calling
for loans from buyers

QUESTION: What are telephone bonds and how do you buy them?

ANSWER: Telephone bonds are debt securities issued by telephone companies.

When you purchase a telephone bond, you're loaning your money to the telephone company.

In turn, the telephone company promises to pay you a fixed rate of interest for the length of time stated on the bond.

Bonds are available in differing maturities, from 3 to 30 years or longer, and pay interest semiannually.

Like stocks, publically traded bonds can be sold any business day at their current market value.

Telephone bonds usually carry an investment grade credit rating, and some are insured, making them relatively safe investments. Contact your broker for prices, current yields and availability.

Q: I'd like to add some international investments to my portfolio. What do you suggest?

A: International investing offers attractive opportunities, but investing in individual foreign stocks can be complicated and risky.

Different regulations, political instability and fluctuating exchange rates can confuse the most seasoned investor.

One of the simplest and safest ways to invest in global markets is through mutual funds.

Most fund companies offer global or international funds. Many have years of experience in international funds.

Before choosing a fund, ask the following questions: Does the fund have an established track record? Where does the fund get its research information? Are the fund's research teams located abroad or in the United States? What is the fund's long-term performance record?

Finally, the same rules that apply to investing in domestic investments apply to international investments: Buy quality, diversify your investment dollars, and hold your investments for the long term.

Guy Steele is a financial planner and head
of the Pali Palms office of Edward Jones. Send
planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, HI, 96734,
or by email at:

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