Updated Friday, November 28, 2014 as of 9:38 AM ET

Best Income Strategy: Bonds or Annuities?

Roth: I have a different solution that Iíve been using for the last 15 years. Probably 70% of my own fixed income is in certain CDs directly with banks and credit unions that have easy early withdrawal penalties, and that acts like a put. If rates do rise, you pay that small penalty and reinvest at the higher rate. I do have some bond funds and itís a complete myth that bonds are less risky than bond funds. The net present value of the decrease of the cash flow of holding a bond to maturity is equal to the amount that the bond fund falls when rates rise.

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Comments (2)
Great article, thanks for the dialogue!
Posted by William R | Thursday, May 29 2014 at 2:00PM ET
indeed a nice article and the video links you mentioned are really very helping to understand.really an informative content.thanks for the upload.
Posted by fifo c | Friday, June 13 2014 at 12:03AM ET
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