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210 Don’t Make Me Say I Told You So

“Bond mutual funds are not insured or guaranteed by FDIC,
the U.S. Securities Investor Protection Corporation (SIPC), or by

any other government agency, regardless of how a bond mutual
fund is purchased or sold—whether through a brokerage firm,

bank, insurance agency, financial planning firm, or directly.
Nor are they guaranteed by the bank, brokerage firm, or other

financial institution where they are sold.” 1

Millions of investors have an approximate combined
$4.1 trillion invested in bond funds as of January 2019, according
to the Investment Company Institute. I would bet that a large

percentage, if not the majority of those investors, don’t realize

that they face what could be a major loss of principal when
interest rates rise in the future. If you own bond funds, you
might want to take a look at your portfolio and assess the risk

to your principal as rates increase.

1 Investment Company Institute, 2019.

Chapter 5: Things That Can Wreck Your Retirement