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On “Common Sense” Column Defies It

Q

Mr. Stewart may be wrong, but you don’t have a crystal ball, either. Bottom line: Mr. Stewart has no ax to grind. You, on the other hand, want to sell bonds now.

M.L., North Carolina

A

James A. Klotz responds:

This was precisely our point. Since no one has a crystal ball, attempting to time interest rate markets is the antithesis of “common sense.” Our quarrel with Mr. Stewart’s column is not with his forecast, but with the fact that he is forecasting. “Ax to grind” or not, over the past 30 years, bond investors who bought long-term bonds when their funds were available – and did not attempt to guess the direction of interest rates – are very pleased they did.

Jun 27, 2005

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