FYI: “I’m more worried about bonds right now than stocks,” an investor told me recently. He was planning to retire in a few years, so this was an important time for him to manage risk in his portfolio, but he had no exposure to bonds.
He’d steered clear of bonds because interest rates were so low, and he figured that as rates rose, bonds would lose money. Stocks offered him at least the possibility of gains, but stocks also put his retirement plans at risk. If there was a big downturn in the stock market now, he might be forced to work longer.
The idea that you shouldn’t own bonds if interest rates rise is a common fixed income belief that can really hold you back. Are you making assumptions about bonds that are getting in the way of your investment success? Here are three common misconceptions about bonds and the facts all investors should know.
Regards,
Ted
https://www.forbes.com/sites/investor/2019/07/22/three-fixed-income-myths-that-can-hold-you-back-from-investment-success/?ss=etfs-mutualfunds#1733a95340c9
