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Rus on the assumption the intermediate bond holdings have an average maturity in years (i.e. more than 1 year); your holdings are in mutual funds and finally the fund is forced to sell bonds at some point before maturity - I say think twice. Just look at what will happen to a 2 year from maturity instrument when rates rise to 3%.

If you were 70% equities, I urge you to get back there. Maybe you want to get into dividend paying equities, but bonds generally and particularly bond funds in my view will be money loosing over the next 3 to 5 years.

You most certainly have a point, one that's vexed me for some time now, what with bond funds at such low yield levels. I'm not concerned about the 3% rise, because I'll see that coming about 50% of the way before getting there, then I'll move my fixed money into MM. I have no trust in the stock market anymore, and only a little more in the bond market. The market drop taught me that the market can and will again drop 50% or more, only the next time it might not come back. Just as the folks in Japan. I used to think that the true terrible stuff couldn't happen in the US, but I was wrong...way wrong.
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