Most people are fearful of investing in bonds when interest rates rise because that means the price of bonds will be dropping...significantly.
Most people can't take that heat. However, I think it's actually a great time to invest because the interest payments will allow you to buy the next batch of bonds for cheaper at a higher yield.
That means that every year your yield goes up with certainty instead of like the stock market where...hang on I have a phone call...no, for the second time I am not interested in a business opportunity with Amway!
Okay, back to stocks. Stocks are hard to predict so you never know what you are going to get and you are always looking for better returns. With bonds you can just sit back and watch the 7% roll it. Yes, that is correct, 7% yield is easy to find in investment grade bonds. You just have to look for it. And, as I mentioned before, with a little help from the Fed that yield will only increase.
So while bonds are boring and misunderstood. I think it's a great time to get in, so that's what I'm going to do.
