The situation was different with short-term bonds, as central banks around the world pushed down overnight lending rates.
He also exited long- and medium-term bonds for fear that rising rates would zap them.
With the junkier and longer-term bonds you get higher expected return but also higher risk.
Jim Bianco, president of Bianco Research, calculated an average annual gain of 11.8% for long-term bonds.
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In recent months the spread for its short-term bonds went from 150 to 500 basis points.
Issuers are scrambling to refinance into proper long-term bonds, or asking banks for letters of credit.
These longer term bonds are most susceptible to loss of principle in a rising interest rate environment.
The temptation may be to invest in short-term bonds while waiting for interest rates to finally rise.
We could, if we wanted, have the ability to go out and buy equities, buy longer-term bonds.
If interest rates rise across the economy, he says, those longer-term bonds could fall sharply in price.
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However, it makes sense when you consider shorter term bonds are less risky than longer term bonds.
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It would also increase the demand for long-term bonds, thereby holding down long-term interest rates a little longer.
This would especially be true for long term bonds, which many retirees bought for their higher interest rates.
Investors cannot afford to watch their wealth wither away in low returning money market funds and short-term bonds.
The alternative of banks issuing many hundreds of billions of pounds of long-term bonds also looks fanciful right now.
Two studies that I have seen recently suggest looking at long-term bonds instead.
Buying shorter-term securities, shorter-term bonds, you may not get a lot of yield.
For investors in long-term bonds, that is certainly soon enough to worry about.
They return about the same as long-term bonds with lower interest-rate risk and pay substantially better than short-term bonds.
They might be investors who lent money to the bank by buying its short-term bonds, with a Libor-linked interest rate.
He recommends investors look at long-term bonds with 10 years or more between the bond's call date and maturity date.
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He says he has to rely for financing on short-term bank loans at high interest rates instead of on longer-term bonds.
Noah Rosenfarb, the Singers' financial adviser, invested money targeted for the down payment in short-term bonds, preferred stocks and dividend-paying stocks.
Creditor banks have hinted they might be prepared to convert some of this debt into longer-term bonds, issued by the government.
Stay invested in short term bonds and buy quality dividend paying stocks like Kimberly Clark (KMB), Kraft (KFT) and Duke Energy (DUK).
He concludes that U.S. long term bonds are a good trading opportunity.
This means that the difference between short-term bonds (two-year Treasuries currently yield 1.02%) and long-term bonds (10-year Treasuries yield 3.77%) will narrow.
It could float long-term bonds to advance badly needed technology in equipment.
He has said the BOJ should consider buying more and longer-term bonds.
The longest-term bonds, which are the most volatile, have risen the most.
WSJ: Upside: Looking for Inflation Protection? Take TIPS off Your List
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