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LONG TERM BOND FUNDS? GET OUT

June 2, 2014

**********Go to “Core Portfolio” for current holdings.**********

Interest rates have been declining.  If you are still in long term bond Funds, you have an excellent opportunity to sell them.  You don’t have to sell today or even this week.  But you definitely want to get out soon.  Nobody really knows when interest rates are going up.  It could be weeks, months, or even years away.  But with the government’s massive money printing it’s only a matter of time.

So why do you want to sell long term bond funds?  Because if rates spike up you will get hurt…and it could be bad.  One option is to get into shorter term bond funds and I have one listed in the Core Portfolio.

Most good financial advisors are also recommending floating rate bond funds.  BKLN is frequently mentioned and is also listed in the Core Portfolio.  BKLN is paying just over 4%.  JRO and VVR are closed end funds that use leverage and are riskier.  Here is an excellent article if you want to read more:

http://seekingalpha.com/article/2229783-caution-advised-if-investing-in-floating-rate-loans-cefs

Note I am talking about funds…..NOT individual bonds which I do own and have suggested.

Every so often I mention annuities.  These dogs are probably the worst investment vehicle ever offered.  Never never buy an annuity.  They are commission products and only benefit the rip off artist selling them.  There is tons of information on the web and you can Goog to find out more.

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