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Strategies & Market Trends : Dividend investing for retirement

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To: Kip S who wrote (4325)	4/4/2010 12:57:01 PM
From: seminole	of 34328

Another couple of points and suggestions. First, any bond held to maturity would avoid principle loss with interest rate increases. For short term bonds it is easy to hold these instruments to maturity and avoid any loss. I agree that bond holders should shorten their durations (maturities) before rates rise. IMO, bond holders are going to get killed during the next couple of years. Another technique that bond holders (or CD holders) should consider is LADDERING. With a laddered portfolio, a portion of your bond portfolio is available for reinvestment each year at potentially higher rates. A laddered portfolio allow the investor to reach for higher yield, reduce interest rate risk by lowering the duration of the portfolio and still retain good liquidity.

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