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Short-term interest rates are headed up, but not necessarily long-term ones.

What are you getting at here and what impact does this have on the scenario? I am aware that Bill Gross says long bonds are not the place to be now. So even if long term rates are not going up, the implication is that there is a risk to priciple in long term bonds that is especially felt to be high now.

If she holds to maturity, and the company is financially sound, there is no risk to principal.

I'm not sure she will be holding to maturity at her age. She may need the priciple between now and the maturity date in 20-25 years.
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