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Subject:  Re: Bond fund investing - Bad Timing? Date:  12/8/2003  9:05 AM
Author:  billjam Number:  38096 of 95248

I'm in a similar situation, being too heavy in stocks for the long term. However, I believe interest rates will rise in 2004 and 2005. At the same time I expect stock prices to rise also.

I'm going to hold my stocks for the most part but rebalance about 5% of the portfolio each quarter in 2004. This will include taking some profits on rising stocks but not liquidating the whole position so long as I feel the stock has further to run.

I've been dealing with the interest rate risk issue for the past year by buying individual bonds in the secondary market with 1 to 2 years to maturity. I've had some good yields in GMAC notes and bonds for example. You could also look at short term corporate bond mutual funds for now and move the money to intermediate term funds when you feel most of the interest rate rise is over.


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