[net.invest] Zero coupon bonds

len@qumix.UUCP (Leonard Labar) (07/11/85)

Has anyone out there had experience with zero coupon bonds?  Sears has
them for 10.38% return over 10 years locked in.  Our tax man/investment
consultant advised us on them.  We're considering transferring part of
our IRA and part of our sons trust fund into them.

gene@batman.UUCP (Gene Mutschler) (07/14/85)

> Has anyone out there had experience with zero coupon bonds?  Sears has
> them for 10.38% return over 10 years locked in.  Our tax man/investment
> consultant advised us on them.  We're considering transferring part of
> our IRA and part of our sons trust fund into them.

They're too new for many people to have had experience with them, I think.
The main reason being that they don't make much sense unless tax sheltered.
(Unless of course you LIKE paying taxes on income that really isnt there...)

john@hp-pcd.UUCP (john) (07/19/85)

<<<<<
<
<
<  The main reason being that they don't make much sense unless tax sheltered.
<  (Unless of course you LIKE paying taxes on income that really isnt there..)

   If he didn't he wouldn't be paying taxes on his FICA withholdings.


John Eaton
!hplabs!hp-pcd!john

johno@rruxo.UUCP (J OBrien) (07/19/85)

Zero Coupons hav actually been around for a while.  Its the treasury
zero coupons that are new (generally called CATS or STRIPS).
Zeros are okay for IRA's, since you defer paying the tax.  They
are super for a college fund for a kid because they are usually
in a low tax bracket and will have to pay almost no tax as the
bonds build value.

John O'B