Investors may be able to taper-proof their fixed-income portfolios by shunning long-term government Treasurys and opting instead for three yield-producing, fixed-income alternatives, according to MarketWatch.

While investors can reach a 3 percent to 5 percent yield with dividend stocks, MarketWatch columnist Aaron Katsman, president of Lighthouse Capital, said the potential for loss of income is still an overhang with stocks.

Instead, he recommends other solutions that stay within the fixed-income market.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

Katsman said convertible bonds are a good solution because they are bonds and therefore pay interest, but they can be converted into stock if the underlying equity appreciates.

Christopher Towle of asset manager Lord Abbett explained that convertible bonds usually appreciate when the 10-year Treasury yield rises by 100 basis points or more.

Convertibles paired with traditional corporate debt "may add a higher level of participation in stock movements, while potentially lowering a portfolio's interest rate sensitivity," Towle said.

Katsman suggested senior bank loans could also be a good choice for yield-hungry investors. Such loans are floating-rate securities from below-investment grade companies, but unlike junk bonds they have seniority over other creditors and are secured.

According to Katsman, Timothy Strauts of Morningstar wrote on Seekingalpha.com that "bank loans have tended to have low average default rates versus high-yield bonds, above-average yields, and very low duration (given that they pay floating rates), are negatively correlated to Treasury bonds, and have historically generated above-average returns in rising interest-rate environments."

A third solution for investors could be global non-U.S. dollar bonds, Katsman suggested.

Douglas Peebles, chief investment officer and head of fixed income at AllianceBernstein, said global bonds tend to perform significantly better than do U.S. bonds in an adverse bond market.

"While U.S. bonds declined 1.1 percent on average in down quarters, global bonds lost only 0.7 percent," Peebles said. "That's 62 percent of the downside of U.S. bonds — a significant advantage."

Treasurys fell in early trading Wednesday after gross domestic product for the second quarter grew a higher-than-expected 1.7 percent, Bloomberg reported.

However, the Federal Reserve is finishing up its two-day meeting Wednesday and will release a statement regarding the policy outlook.

"It's important to look forward and listen to any guidance from [Fed Chairman Ben] Bernanke on the development of the economy. I expect his wording to be cautious, but at some point the Fed will have to reduce stimulus," Lorenzo Carcano, senior portfolio manager at B Metzler Seel Sohn & Co., told Bloomberg.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.