At the end of last year, 79% of advisors surveyed by GDC Research and Practical Perspectives indicated that the possibility of a jump in interest rates this year was the biggest reason driving them to make changes to their clients’ retirement portfolios.

Indeed, money poured out of bond funds last year as rate increases seemed certain because of the Federal Reserve Board’s announcement of a tapering of quantitative easing. So far this year, however, rates have declined. It looks as if maybe bond markets weren’t so stupid and actually understood that the United States couldn’t buy back its own bonds indefinitely.

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