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No. of Recommendations: 4

The way I see it. For those speculating in bonds, the largest risk is interest rate risk. For long term holders of fixed income the greater risk is inflation. If you buy a bond at x% interest rate and hold it to maturity, barring the normally small credit risk of default, that is what you get at maturity. The big risk is how much the recurring payments are in real purchasing power and how much the principal will be worth at maturity again in purchasing power.

CPI has averaged about 2.1% for the last four years.
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