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Updated: February 2, 2011Bond Bubble About to Burst!It used to be so easy. All you had to do was wander down to your local bank and buy a CD. You got an entirely safe, 100% insured investment that yielded a nice, comfortable five percent. Today that same CD is providing only around 2% unless you're willing to tie up your money for a decade or longer (which in this economic climate would be terribly foolish!). As a result millions of Americans have flocked to corporate and other bonds that pay higher interest payments than the banks. Most had no idea that they were taking a terrible risk. For the past few years this strategy has paid off handsomely. But this bubble may be about to burst. When interest rates climb, the value of the fixed rate bonds you hold may plummet as new bond buyers flock to the higher rate versions. If you don't closely monitor your investments, you may suffer yet another market plunge in the coming months. If you must buy bonds, stick to those with the very shortest lives. Above all avoid long term bonds as they carry a huge long-term interest rate risk. And what happens if the U.S. dollar should tumble? The Fed will reluctantly be forced into raising interest rates in an effort to attract foreign investment which will support the value of the greenback. With our deeply depressed economy the last thing we need now are higher interest rates. That would kill off the precious few jobs that are being created. Should interest rates shoot up the value of bonds being held by investors would plummet. By chasing high yields, investors may be setting themselves up for a terrible crash and a terrible loss. Survive and thrive during the coming bad times. Get the facts - there's no other book like it. Order today!
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