Ask Terry Questions gnma reinvestment income trust 120

gnma reinvestment income trust 120

By Terry Savage on March 28, 2015 |

What is your opinion of GNMA reinvestment income trust 120.Have approx 16K as of 9/2014 in it as part of trad IRA. Will be 70 yo this Nov. FAdv wants me to liquidate this and apply proceeds to purchase of symbol WRHIX. Also have 3 other equity UIT’s that combined w GNMA equal 40.2% of assets. Stay with the GNMA UIT for now, or sell? Short Term Loss now at $846.08 for GNMA. Thank You

Terry Says:  OK, there are two different issues here.  First, you need to know that when interest rates rise, bond prices FALL.  That applies to all bonds, to a different extent.  And it applies to unit investment trusts.  So it might be wise to sell your BOND (GNMA) unit trust before you lose more money when rates rise.  (In fact, it’s hard to see how you could already have a loss in this fund, since rates are near their lows!

The second — and far more serious — problem you have is your choice of advisors!  Get away from this person — who wants you to move from the frying pan into the fire — while he/she collects a big commission!  I don’t know what other investments you have, but you need a fee-only financial advisor (  OR go to Fidelity or Vanguard, ask about IRA rollovers, and tell them you want some advice about how to invest before you do a rollover!  They will also help with your Minimum Required Distributions, which will start next year.

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