Re: Investing When Interest Rates Rise
I'm not all that crazy about GNMAs. Why? You get a higher yield, but in return you get an asset that is pretty funky and hard to analyze. Since these securities pose extension risk in an up-rate scenario, and refi risk in a down rate scenario, you have traded away all of the upside in return for higher yield. No thanks. Thta's one of the reasons I like having a fixed rate mortgage: I get to keep the options and benefit from rate swings.
"Neither my companion or I carry firearms on our persons. We depend on the goodwill of our fellow man and the forbearance of reptiles."
- English Bob