Long-Term Bond &

Mortgage-Backed

Securities

Long-Term Bond

Mortgage-Backed Security

Taylor Rule

Interest Rates Levels

The Federal Reserve will probably start raising interest rates

around the middle of next year, two top officials at the U.S.

central bank said on Thursday, although both said theexact timing will depend on the economy.

"What we think now is that the capital markets have it

more or less right but we don't ourselves know when we're

going to do it," Fed Vice Chairman Stanley Fischer said in

Washington.

"On the basis of our forecasts of the data ... it looks like

markets more or less have it right - somewhere in the

middle of the year." http://www.reuters.com/article/2014/10/09/us-usa-fed-idUSKCN0HY2GB20141009

New Recommended Allocation

Long-Term Bonds – VBLTX – 6%

Oldest Long-Term Bond mutual fund on our study

Management was able to minimize the effects of the 2008 depression

Longest same management time

Growth of 10,000 in 10years – U$ 20,954

http://quotes.morningstar.com/fund/VBLTX/f?t=VBLTX

Mortgage-Backed Securities – MBB – 6%

Oldest Mortgage-Backed Securities mutual fund on our study

Quick recovery from the effects of the 2008 depression

Moderate interest rate sensitivity

98.36% of assets in AAA bonds,

http://etfs.morningstar.com/quote?t=MBB&region=usa&culture=en-US