Monday, September 16, 2013

TAKING A WAIT AND SEE APPROACH ON BOND INVESTMENTS

While the majority of my total dollars invested are in stocks, I do have some exposure to the bond market through fund investments.  This being the case, you can understand my concern over the recent media frenzy regarding a supposed looming crash in the bond market.  While this may very well come to fruition, since rising interest rates have an adverse affect on bond investments, I've decided not to panic and take a wait and see approach.  

I'll keep reinvesting dividends in the bond funds I currently hold, however, I'll deploy my cash investments elsewhere.  So in effect I'll be limiting exposure to any bond market crash, should one occur.  A crash in the bond market may very well precipitate a correction in the stock market as well.  In that eventuality, I intend to look at it as a buying opportunity.  With prices down, my investment capital will go much farther.  

It's really a matter of learning to make money no matter where the market is going.  The key is not to panic.  I didn't panic when the market crashed during the "Great Recession" and I don't intend to panic now.

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