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What Percentage and What Kind of Bonds Should I Have in My Portfolio?

Bonds can provide consistency and balance to a portfolio otherwise comprised of stocks.

In the long run, stocks are generally associated with a higher yield, but as we know, higher returns mean higher risks. Bonds are seen as a safer, yet lower-yielding investment. Bonds offer a spectrum of risk and return potential, however, and various kinds of bonds and bond funds can be used in various market climates and portfolios.

Ideally, a portfolio should be diversified between various asset classes, which include stocks, bonds, cash, and others, but the optimal allocation changes with age.

As a general rule of thumb, when you're young you can afford to take more risks and invest a large percentage of your assets in stocks, but, as you near retirement age, the safety, and steady income provided by bonds, especially Treasuries and investment-grade corporate bonds, can be a more suitable means of getting the asset protection and income you’ll be looking for.

Our resources here at Tickeron can help you to arrive at the right allocation for your goals and situation.

Is My Portfolio Diversified Enough?
What is the Role of Asset Allocation in My Investments?
What Types of Bonds Are There?

Keywords: fixed income, asset allocation, bonds, high yield, investment basics,