[Fred911]

"Dollar bonds have returned about the same amount over the same period."

Are you telling me you know of a bond that I can more than double my money in 7 years??? I'd love some specifics on that!

[JasonC]

Double in 8 years is what you said, and that is 9%. BBB corporates yielded 8.5% in 2000. Plenty of bonds were yielding 12 last fall, and many yield 8 now, while the better credits are back to 6-7%.

Bonds also return more than their coupon when interest rates fall. Each 1% reduction in long rates raises the price of bond with 10 years left to run by about 7%. Corporate bonds have returned 35% since last November from both operating in tandem.

Any time you see a sound corporate name at double digit yields, it's a buy. But last fall, people where buying T-bills at zero and snearing at bank bonds at 12-15%.

[JasonC]

You asked for specifics - my corporate bond fund, Loomis Sayles Retail, has returned +115.5% cumulative return with dividend reinvested, since January 1, 2000. The share price has only moved from $11.48 to $12.67, but it has also paid out $8.22 a share in 57 dividend payments over that stretch - quarterly dividends through June 2007 and monthly dividends thereafter.

$10000 invested at the start of 2000 price bought 871 shares. The dividend reinvestment has compounded that to 1698.6 shares, worth $21538 as of yesterday's close.

YMMV...