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  • Ed Yardeni Likes Emerging Markets, High Yield Bonds; Believes Europe's in for Trouble [View article]
    Inflationary pressure is two years down the road. We are currently in a deflationary mode with consumers and corporations looking to delever. Although interest rates will start to increase, the credit spread between Treasuries and corporate debt will decline as the economy improves and credit conditons improve. As a result, you will collect say 5-6% on investment grade corporate debt with the underlying value of the debt remaining relatively constant. Stay within a 4-6 year average duration for bonds and you should get equity like returns but higher up on the credit food chain. Note: Long AGG and Ginnie Mae bond funds.


    On May 08 08:21 AM prairiedog555 wrote:

    > So, if the economy is recovering, and inflationary pressure is a
    > factor, why are bonds a good buy? Don't they go down when rates rise?
    May 08 10:43 am |Rating: +1 0 |Link to Comment
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