Is it better to for the small investor to create a ladder of bonds or to use a no load bond fund?
As a small investor it may be difficult to strategically ladder enough bonds to make it work your while and be cost effective. A bond fund will offer the diversity but if interest rates should rise there is no assurance you will get your principal returned, since there is no set maturities for the typical bond fund. The best way to answer your question is to calculate the cost in laddering individual bonds versus the fund’s total cost, then go with the former if the overall costs are comparable.
