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Author: brucedoe Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8750  
Subject: Re: secured promidary notes Date: 4/14/2014 1:21 PM
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I agree with kelborn. I have been sure there was going to be runaway inflation since 2001 so a several years I held off buying CDs buying 5 and 6% because I was sure rates were going to 8 or 95 or maybe higher.

Then Paul Krugman convinced me that we were in an economic state that no one knew how to get out of and that these rates would be around for a long time. So I started buying CDs in my CD module from above 6% gradually down to 4 percent. I was buying 5-7 yr CDs. These are now maturing. I was lucky in January and got 3% CDs from PenFed, but other 5 yr CDs are renewing at less than 2%.

Our 5% corporate bonds have all been called in our bond module, and I have not replaced them though we have both stand alone IPS's and mutual funds. The stand alone IPS's mature next year and the following year. I'm not sure what I will do.

So, yes, I believe that some year, interest rates will probably skyrocket, but I have no idea when.

As for our stock module, I never bought preferred stocks before the last decade. I have bought below par and only what I feel are high rated companies like PSA and PSB, but even the safe" preferreds are paying above 6% but I am willing to buy and hold 5% for ever. Yes, I am willing to hold these forever in case they are never called.

As for common stocks, I like the Fantastic 50s with the likes of 3M, GPC, K, PG, and EMR (Because of the death of my wife, I personally only own EMR at present.). Among REITs for common stock, I like VTR, my own largest common stock holding. My own personal largest holding is VGHAX, but had the T. Rowe Price Health Sciences Fund in my wife's trust.

Everyone to their own poison.

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