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Subject:  Re: Bonds vs equities - OT? Date:  7/24/2013  3:06 PM
Author:  pauleckler Number:  72674 of 88498

If you had the foresight to set up a bond portfolio years ago, you are enjoying substantially higher interest payments than current market rates. Of course your bonds have considerable value over their face value, and many have been called.

Absent that situation, bond holder are in for some pain. If they own quality bonds and hold them to maturity, they should be OK. But bond fund investors can expect to take a hit.

Bonds are less volatile than stocks, but still sizable declines seem likely as interest rates rise.

Sadly the very low interest rates offered by treasury bonds means most alternatives also pay low returns.

Most are better off in stocks just now, even though they are higher risk. But the risk can be minimized by concentrating on dividend paying stocks. The dividend tends to support the stock price even in bad times. Otherwise, I would focus on good quality blue chips to provide a measure of stability.

If you worry about the stock market, now is not the time for speculative investments.

No matter how you slice it, there are still risks out there. We do the best we can and hope for the best.
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