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So can anyone tell me exactly why it would be better to invest in a bond fund than in high dividend stocks like NLY, which is tied to the mortgage market? Neither is safe from erosion of the initial investment, and NLY has much better dividends. What am I missing here? I am wondering because according to asset allocation we should drastically increase our bond fund or indiv. bond holdings.

And I am very hesitant to back up the truck and load up on bond funds right now, when we are within 6-8 years of retirement. No time to wait out a long down cycle.

Thanks in advance for any light you can shed on this.
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