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Today, The Big Risk Is In Bonds

Friday, May 10, 2013 - 7:50 PM
While people are still worried about government deficits, rising federal debt, and the possibility of hyperinflation, yields on Treasury obligations are approaching record low levels. Worse, in all short-term maturities the yield is lower than the rate of inflation. Today, for instance, the yield on a 10-year Treasury is 1.70 percent— about the same as the trailing rate of inflation.

The risk that interest rates will rise is now greater than the opportunity of a continued decline. More important, the losses could be significant.
ShorebreakShorebreak2,675 posts since
Apr 6, 2010
Rep Points: 14,527
1. Friday, May 10, 2013 - 8:08 PM
I use stable value funds to replace my bonds allocation; realizing stable value funds have their own risk. 
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427