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I saw red the last time I looked at my wife's RRSP account online.

There it was when I checked the individual bonds that make up a five-year ladder in the account. Two of them had fallen in price lately and the brokerage firm showed the loss in red ink. My reaction? I just shrugged, clicked out of the account and checked the score of the Blue Jays game. I suggest you do likewise if the bonds, preferred shares, real estate investment trusts or dividend-paying common shares you own have fallen in price.

Interest rates are going to start chugging higher at some point and, in anticipation, bonds and other interest-rate sensitive investments have been on the defensive. It's going to get worse, but you can take it. Don't be one of those panicky types that investing pros envision when they talk about the damage a bear market for bonds can do.

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Here's how to set your mind straight about bonds. Realize that you own them for income and as a hedge against a stock-market decline. True, we've all had some great total returns from bonds in recent years. But that's most likely over. Barring a big setback for the economy, you're looking at getting yields of up to 3 per cent for short- to medium-term bonds. If stocks tank, your high-grade bonds will represent an island of composure amid overall market turmoil.

I'm expecting more red ink in that bond ladder in the months and years ahead. Yawn. Barring catastrophic economic conditions, I'm confident all will pay interest twice yearly and mature on schedule. The shorter-term bonds in the ladder mature in the next couple of years, offering an opportunity to buy bonds with higher yields. In other accounts, I'm using guaranteed investment certificates as much as bonds or bond exchange-traded funds. Because they're illiquid, there's no red ink to look at. They just sit there like statues in your portfolio, quietly earning interest and progressing toward their maturity date.

You'll need more patience to deal with red ink from bond ETFs. With no redemption date, you'll have to wait until rates stabilize after any increases ahead. Contain the downside by sticking to short term bonds and weight corporates over government bonds.

Red ink is coming, investors. Learn to make your peace with it.

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