Many people invest in bond funds with the motive of preserving capital and reducing risk. While it sounds sensible and has worked for many decades in the past, it is not working now because interest rates are at historic lows. As of today, nearly 80% of Morningstar’s taxable bond funds and over 90% of municipal bond funds have lost money so far this year. For example, the Vanguard Total Bond Index fund has lost 1.6 percent this year, even after factoring in a 2.6 percent yield! Find out why bond funds are losing so much money and could KEEP losing money for the next five years. A great show today you don’t want to miss MASTERING MONEY is on the air!!
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