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Im so sorry, but your intuition may be good ... as interest rates posibly go up, the value of these bonds COULD go down
I am having trouble reading your answer. It looks like Just Answer has some kind of pop up blocking most of the screen
The problem here, is that (as I'm sure you understand) as rates begin to go back ... and they may not do so tomorrow (based on the Fed's decision yesterday) BUT THEY WILL, nowhere to go but up form here - investors looking to buy bonds will buy the newer bonds (issues at those increasing rates) and MIGHT buy your bonds, but would only do so at a discount, that would make them generate the effective higher rate being offered with the new bonds that come to martket
Have you tried using the scroll bar to look back up at eh answer?
I still can't see most of the screen because of some kind of Just Answer popup
(sorry for the typos ... hopefully you got the gist of that) .. OK let me contact the moderators and see what they can do So sorry I am having no ntrouble on my end
There is a big popup which shows part of my question and includes the Just Answer logo and says awaiting customer action
I've sent an email to the moderators
Can you try turning on the p[opup blocker in your broweer?
Ok this never happened before
system HAs been very buggy tonight
What about moving to "Q&A" mode ... that may her
All I saw was your last phrase about the system being buggy
ok ;;; I'll move us to Q&A ... we can still continue our dialogue, just not in real time
how do i do that?
I am not sure how to get into Q&A
The problem here, is that (as I'm sure you understand) as rates begin to go back ... and they may not do so tomorrow (based on the Fed's decision yesterday) BUT THEY WILL, nowhere to go but up form here - investors looking to buy bonds will buy the newer bonds (issues at those increasing rates) and MIGHT buy your bonds, but would only do so at a discount, that would make them generate the effective higher rate being offered with the new bonds that come to market.
This is that inverse relationship between rates and bonds.
Essentially, my question is will the prices for my bonds keep getting worse? If I have to sell now, I am looking for a way to generate income and preserve capital. Growth is not as important.
If I sell these bonds, is there someplace which will provide income but, almost as importantly, preserve capital? I haven't found any mutual funds which are safe and provide income rather than growth.
It seems like my problem will be needing to raise cash in five years. Would a conservative allocation mutual fund be likely (No, I'm not asking for a guarantee) be something that could be liquidated in five years with the principal being secure?
In terms of probability, that IS the most likely.You may want to look at one of the target date funds.Such as these: They change the portfolio to become more and more conservative, as you get closer to the point where you need the funds/https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList?WT.srch=1There are many other fund companies That do this.But again. TODAY, Treasuries (high 2's) are the safest way to do this ... and I believe that (given your time frame) that may actually outperform you municipal bonds.DO be sure, however, to factor in what the tax free nature of your bonds is dong for you ... If your income is high enough buying a laddered portfolio of municipal bonds (buying bonds one month at a time) may make the most sense.Here's an excellent article on that.http://bonds.about.com/od/munibonds/a/How-To-Calculate-Municipal-Bonds-Tax-Equivalent-Yield.htmLane