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Baby Boomers, the Bond Market, and Women’s Wallets, 3 Steps to Preventing a Possible “Money Bust!

Baby Boomers, the Bond Market, and Women's Wallets, 3 Steps to Preventing a Possible "Money Bust!

Baby Boomers, the Bond Market, and Women’s Wallets,
3 Steps to Preventing a Possible “Money Bust”!


Consider this:

– Another Baby Boomer will turn 60 years old every 10.5 seconds for the next 18 years, 24 hours a day.

– The 10-year US Treasury bond, one of the most conservative investments available, just made an historic all time high after a 30 year bull market advance.

– A woman of baby boomer age will most likely be advised to buy bonds for her retirement, which has been the norm in investment theory for generations, except this time, it could mean a real bust for her wallet!

What’s That Ticking Noise?

Warning – there could be a bomb hidden for women baby boomers that have invested in long-term bonds to preserve capital.  Of course, this can affect all bond buyers at any age. Yet it is most important for women to become educated, since statistically we control most of the nation’s wealth, and practically, we want to be good stewards of our family’s assets.

From Wealth Generation to Wealth Preservation.

The sheer size of the baby boomer generation will generate an enormous demand for bonds over the next decade as never before. Transitioning from a wealth generation phase of life to a wealth preservation phase means that bonds will dominate the financial focus of an entire generation.  Consumers are often unaware of the strong, persuasive bias within the investment industry to guide retirees into bonds for more safety. But what if it is precisely the wrong time to buy bonds?

A Little Historic Perspective.

As the saying goes, “A picture says a thousand words”. Look at any chart of the bond market. You will readily see that the bond market has had an unprecedented 30-year bullish advance.  (See the 30-year graph below).

Do you remember when interest rates were extremely high, around 20%?  That was 1981. (When interest rates are high, bond prices are low, since there is an inverse relationship). Now in 2014, we have the opposite. Short-term interest rates are nearly zero, and 10-year bonds pay only 2.5%, with the purchase prices of bonds sky high.  If you buy bonds now, you will pay these high prices and over the next ten years, the probable direction is not favorable to your wallet. Instead of preserving wealth, your hard earned retirement savings may actually be eroded.

So What’s a Smart Woman to Do?

Here are three steps you can take to avoid a possible “money bust”:

1. Get help! Find a qualified investment advisor who will spend time to educate you, show you the charts, and discuss your financial goals and strategies.

2. Create a Bond Ladder.  A prudent woman can achieve preservation of capital without taking inordinate risk.

What’s a Bond Ladder?

A bond ladder is a portfolio of bonds, that is, a collection of various bonds purchased with different maturities staggered or “laddered” over an investment time frame.  In a rising interest rate environment, as each “rung” matures, that money is reinvested at an incrementally higher rate. By spreading out the maturities of your bond portfolio, you receive a higher overall income yield. The key is looking for the highest quality, safest bond for each rung of the ladder.

3. Don’t believe any advisor who tells you that you will be fine by owning bond mutual funds. Not so! Not all bond funds are your best friends. Do your homework to determine the range of maturities and the quality inside any bond fund.

You have earned your money, and now you want to preserve it. Don’t let what has traditionally been a safe haven for retirees draw you into danger.

The Four Dames believe the modern woman today is aware of all areas of her life: her money, her health, and her relationships. We are here to empower women and to give you the benefit of our collective knowledge and abundant experience in real world situations.

Through our many programs we inspire, educate, and point the way so you can live a life you love. Contact us today for a personal consultation about your business, your money, your success or your life.

We encourage you to pay attention, get educated and listen carefully. Tick….tick…tick….tick…is that your wallet?

Come, let us empower you… then you will have the peace of mind knowing it’s just your healthy heart beating!

US-10yr-T-Note-cont-2014-06-02-chartChart: 10-year US Treasuries  – 30 years from 1981 to today

Lynn Kitchen is a successful Certified Life Mastery Consultant, Professional Speaker, Trainer and Financial Coach helping women to get results in making their life’s goals and financial dreams come true.  Lynn Kitchen was one of the first women to own her own Investment Broker Dealership and Investment Advisor Firm. She brings 34 years of financial experience, as well as 10 years of spiritual practitioner experience to her clients.   Lynn is one of the Founders of www.fourdames.com. The Four Dames is a collaborative coaching company that empowers Women to create a life of freedom, purpose and fun, which specializes in the areas of Health, Wealth, Love and Purpose.  Click here to receive 2 free MP3’s on The Abundant Life, and Living by Conscious Intention.

The above “Pearl of Wisdom” is LIVE! It has been shared directly from the content in the current ongoing weekly course that The Four Dames teach – a life changing, transformational course designed to provide structure and weekly support for women who know they have treasured gifts to offer the world.

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