Are there any limitations on longer duration Vanguard bonds?

[LB_001]

I was looking at purchasing some bonds from vanguard (probably leaning towards their bond index fund) and couldn't find any limitations really for their long term bonds compared to their mid-term and short-term despite a longer maturity. It just seems like if you can buy and sell the shares at any point with no penalties the long term bonds should offer a higher yield with no drawbacks. Am I missing something or is it possible for them to give a lot of flexibility because they have so many investors?

[DcifrThs]

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I was looking at purchasing some bonds from vanguard (probably leaning towards their bond index fund) and couldn't find any limitations really for their long term bonds compared to their mid-term and short-term despite a longer maturity. It just seems like if you can buy and sell the shares at any point with no penalties the long term bonds should offer a higher yield with no drawbacks. Am I missing something or is it possible for them to give a lot of flexibility because they have so many investors?

[/ QUOTE ]

duration is a measure that relates small basis point changes in yield to a change in price.

the downside to having long duration bonds is that if the yield curve shifts up 25bps, the price change (fall) for those long duration bonds will be larger than it would be for your short duration bonds.

EDIT: further, as JeffW has noted previously, long duration bonds are more highly correlated to equities than short duration bonds.

Barron