WARNING: When the Fed raises rates, your bonds could lose 25% – Do not own bonds. Sell. Move out now. – PAUL B. FARRELL
April 24th, 2013
10 investing rules for the coming bond crash
By Paul B. Farrell, MarketWatch
“The best piece of advice I could give long-term investors today is don’t own bonds. And if you do own them, you probably ought to move out of them,” warns Charles Ellis, acclaimed author of the classic “Winning the Loser’s Game: Timeless Strategies for Successful Investing.”
Get it? Do not own bonds. Sell. Move out now.
Sound familiar? You bet. Ellis’ warning came during a CNN/Money interview with Penelope Wang, just one month after the cover of InvestmentNews was screaming the same warning in huge bold type: “Tick, Tick … Boom!”
In that “special report on the impending crisis in the bond market,” InvestmentNews the newspaper of record for 90,000 professional advisers, I-News was predicting a “bond bomb” will explode, asking rhetorically: “What will your clients’ portfolios look like when the bond bomb goes off?” Answer: Bonds will crash, with huge loses.
When the Fed raises rates, your bonds could lose 25%