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WilliamLipp asks,

intercst Date: 8/5/99 11:11 PM Number: 12873
I have a "5 step" bond ladder equal to 5 years worth of living expenses. I had been using US Treasury notes. But now that 5-year CDs yield about 1% above 5 year Treasuries, I'm replacing the Treasury notes with CDs as they mature.

I assume this is bonds maturing 1 year apart, each with about one year's living money. Have you considered stretching it to 10 steps, each with 1/2 year living money. You would get each year's money partly from selling stock this year and partly from the maturing bond, buying 10 year bonds instead of 5 year bonds. Longer duration bonds tend to pay higher interest rates, so it seems to me this could boost your yield a bit.

The small difference in yield between 5 and 10 year notes isn't attractive enough to me to tie up my money for 10 years. (But reasonable people can differ on that assessment.)

If I still believe in Harry S. Dent's prediction of a prolonged recession/depression starting in the year 2008, I might put as much as 50% of my portfolio in 30 year Treasuries starting in 2006. We'll see.

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