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The post responded to reflected that time frame.

It did no such thing. The post you responded to asked how bonds/CDs would help him...that's going forward not looking in the past.



Over the long term diversifying a bond portfolio-high yield, US. Short term bonds, US intermediate term bonds, TIPS, and international bonds-will outperform CDs.

I do not agree with this in the least. Will is far too strong a term. With interest rates still well below historical averages, why would you count on *any* NAV appreciation from a bond fund? Without NAV appreciation, how will today's bond funds beat 5-year CDs that are yielding as much as 6% if you look around and buy when they go on sale?



Actually we have had a RISING interest rate environment which means bond funds don't do as well

Do you believe this? Or are you just trying to make statements hoping people will accept them? Because the facts are definitely not in your favor.

You quoted 17-year returns for a bond fund. During that 17-year period, interest rates have fallen dramatically -- see http://www.naic.org/svo_research_historical_treasury_rates.htm for proof. Sure, they have gone up in the last 2 years, and bond funds have suffered for it. But they have not gone up nearly enough in the last 2 years to overcome to dramatic fall of the prior 15 years.

Overall, rates have fallen significantly in the period you quoted and that increased the returns of the bond funds. It would be virtually impossible for the same things to happen in the next 17 years, so it is insane to use the past 17 years as even a remote indicator of the returns you can expect from bonds/bond funds going forward.

In fact, I would say it is insulting to even try...

Acme
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