Hi Bernie, Have you seen what's been happening to the 10 Yr Treasury bills? They along with mortgage rates have started to soar. I'd guess this is as good a barometer as any of what the next FED move will be. "Easing" appears to be over. That means we get to see either flat or rising short term interest rates. Even the 25 year notes have started to rise in yield.
Of course a rise in yield on existing notes means there's a drop in face value. That will translate into a drop in Net Asset Value for medium to long term bond funds. Usually we start to see the Price/share start to chase the NAV downward once this cycle begins.
I'd guess our AIM cash reserves will start to look better and better as the cycle starts downward. There is usually a carry-over from the govt bond market to the real estate and corporate bonds and other high yield areas as some of the premium evaporates. I will enjoy being able to put some of the profits back to work buying more high yield funds when the time is right.
As mentioned previously I believe I'll be adding a corporate bond fund and a real estate investment trust fund to my mix of income producers during the next downward portion of the cycle. We own a nice REIT and the ACM Income Fund now and including a healthy corporate bond fund (most likely a closed end fund) to the mix will make me happy.
Around here mortgage rates have jumped from around 5% to 6% in only a few weeks. Bankers are smiling. Those who'd been fence sitting about refinancing are now nearly panicing to get the job done.
Those shares you purchased at the end of 1999 turned out to be a "reasonable" investment! Good thing AIM guided your decision making. I managed to pick up some ACG right at the end of Dec. 1999 at $6-3/8. Those shares still look pretty good to me. I hope I have a chance to add some more to the collection when prices get back down there.
Best regards, Tom
Port Washington, WI 53074
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