Investors: Try these strategies to build your portfolios

You don't have to bet on the auto industry to get a decent return from corporate bonds. International Paper has a BBB rating from Standard & Poor's. That's the lowest investment-grade rating. Its bond, maturing in June 2014, yields 12.9%. Freeport McMoRan Copper & Gold, another BBB, has a bond that matures in April 2012 that yields about 12.6%.

•Consider buying closed-end municipal bond funds. Closed-end funds issue a set number of shares and trade on stock exchanges, just as stocks do. But many times, their share price is less than the actual value of their holdings.

For example, Nuveen Insured Florida Premium Income NFL had assets worth $13.01 a share as of Tuesday. But its share price was $9.66 — a 25.8% discount, in closed-end parlance. The fund yielded 7.75%, which is free from federal income taxes. A person in the 25% tax bracket would have to earn 10.3% in a taxable bond to get 7.75% after taxes.

The fund has its peculiarities. For one thing, Florida doesn't have a state income tax, so there's no particular incentive for a Floridian to buy the fund. For another, the companies that insure municipal bonds are themselves under fire, so you probably shouldn't put a lot of faith in the "insured" part of the fund's name. And like many closed-end bond funds, NFL can borrow to invest, which amplifies gains and losses. The fund has fallen 23% this year, so it's clearly not without risk. Nevertheless, you're getting stocklike returns in a bond fund, which is unusual.

Finally, you could just hope for the best and buy a broad-based stock fund. If there really is any validity to reversion to the mean, then the next 20 years shouldn't be half as mean as the past 20 were.

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. new book,Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments, is available through John Wiley & Sons. Click here for an index of Investing columns. His e-mail is

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