I have worked with investors and their bond portfolios for years. There are two major problems that don't really seem to have answers when working with bonds.
Number one you have no control over interest rates. If rates are good then great if rates are bad then not so great and there is nothing you can do about it.
Number two you have no control over your bond values. When rates go up your bond values will go down. There is nothing you can do about it. And yes I am one of those few advisors in the world that believes that when an investment is down it is lost money even if you don't sell it yet.
If you have a large bond portfolio let me tell you that when rates go back up for real your bond values will go down. There is nothing you can do about it. Or is there?
Fixed indexed annuities offer a great alternative to bonds. They have a fixed rate option that is close to most bond rates right now and they are tax deferred. More than that they have what I call a "superpower" option.
You can change them without selling or losing money in commissions and losses. You can change them from earning a fixed interest to earning interest based on the market. All of this while taking zero risk since your principal values never goes down. You can take advantage of an up market with zero principal risk. You can't do that with your bonds! Selling after rates go up means losing money!
To learn more about how it works read - Are Fixed Indexed Annuities A Good Replacement For Bonds?
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