Currently, the economy is strong. Despite everyone's fears of recession, unemployment is near record lows, wages and productivity are rising, and more dollars are being invested in the U.S. by overseas companies than ever before. Inflation is still too high, and I suspect it is not under control yet. So we could still get some more interest rate hikes, but we are likely going to see the end of the rising rate environment. And should the economy sputter and we fall into recession, rates will come down, which will make the bonds that you hold more valuable. If you own a bond yielding 6% and interest rates drop next year, an equivalent bond may then yield 5%. So your 6% bond will jump in price because it's more desirable. Eventually, it will rise in price enough to yield 5% - for someone else. Yet you'll still earn 6% until maturity. Or you could sell the bond for a profit at the elevated price. Remember, bonds are called fixed income assets. The interest won't vary; it will stay fixed. If rates drop, you'll continue to earn the same yield as the day you bought the bond. So today's bond yields may be even more attractive in a year or two if interest rates decline. I haven't seen a better opportunity in the bond market in my 16 years with The Oxford Club. Yields are strong, and if a recession occurs, as many still expect, bonds that are bought today will be big winners, generating lots of income. I recently revealed my favorite fixed income play in THIS free video. I consider it "Wall Street's Best-Kept Income Secret" because this alternative asset could produce gains as high as 1,984% in three years. REVEAL WALL STREET'S SECRET Bonds are the perfect Goldilocks investment for today's market. I'm loading up on fixed income in my personal account. I recommend you do the same. Good investing, Marc |
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