Bonds
Hi Terry! When I type “bonds” into the search box at TerrySavage.com, most of the articles say, “beware of bonds.” Do you not recommend bonds or bond funds at all? Should I simply invest the non-equity portion of my diversified portfolio in T-bills and/or money market funds instead of bonds? (I do have a no-fee fudiciary thanks to Wealthramp, but what’s your opinion, Terry?)
Thanks so much!
Terry Says
Beware of Bonds is one of my favorite headlines. I have re-written that commentary several times over the years. I want people to understand that bonds — even by the best companies, or the U.S. Treasury have market risk: When rates go up, bond prices go down. There is more price “swing” the longer the maturity.
Of course, the best time to buy bonds is when rates are at their highest. Because the inverse is true: When interest rates come down, bond prices rise! (Those old, higher-rate bonds are in demand!)
there’s a place for bonds in your portfolio — but in my estimation, not a very big place right now.
