Thu, Aug 22, 2013
My System Signals It's Time to Abandon Bonds
For months now, the bond market has been difficult for income investors. Risks are high when rates are low, and the sudden move up in interest rates has pushed bond prices down. With rates having been so low for an extended period of time, investors are risking several years' worth of income if they hold bond funds as rates rise.
Bond prices fall when interest rates rise because older bonds making lower interest payments will need to remain competitive in the market.