With long term interest rates at 5%, I am increasing the amount of funds invested in fixed income. It makes sense to based on a previous analysis I did.
I wrote Fixed Income vs. Equities after a 40% Decline in November 2008 after a 40% in the stock market. The analysis showed the equities needed to return between from 7-16% annually in order to beat a 5% CD during the same time frame, with higher returns needed for shorter holding periods.
I've already started buying some 20 year Treasuries yielding over 5% with a 5% coupon. Now, I'm leaning towards TLT and GOVT ETFs as options, since I don't need to manage reinvestment at maturity.
This is not financial, fixed income, nor investment advice. Please consult a professional advisor.
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