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Just sold my life's work of a company - I have $5MM, am 75 years old w/ no kids and required expenses are $40,000 per year (but I may spend $100,000 and do some travel and volunteer work) - my only concern is capital preservation.


You fail again to understand what is at issue here, because you fail define a crucial term, "capital preservation."

Yes, to pay a premium to buy a bond is to spend more present-day dollars to buy less future-dollars. So one type of capital loss does occur. But the price of the bond is only part of the picture. The other part is the income-stream from coupons. Both have to be kept in mind when buying bonds. Both have to be kept in mind when measuring capital losses.

You --and everyone else who chooses to look at this issue differently-- are free to invest how you choose. In fact, I'd encourage you to do so. The fewer people there are who understand how to use bonds effectively, the less competition the rest of us have and the better absolute-returns and the better risk-adjusted returns we can achieve.

So I thank you for your reply. ROTFL

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