Bicentennial of Bonds: Disappointment Galore

Bonds are anything but worthwhile as a part of your investment portfolio.

Today's post comes straight to you from Vox, and mostly for the reason that I've seen this referenced twice today, so it's worth exploring.

According to Stocks for the Long Run, bonds are anything but worthwhile as a part of your investment portfolio. Now, I'm not a shill for the latest and greatest "get rich" philosophy (of which this is NOT), but I agree that bonds tend to be a massive waste of time.

The chart below seems to make a pretty powerful argument against them, at least as a long term investment in your portfolio. 200 years is a very long track period to prove a point, and it's hard to argue that level of predictability.

historical investment returns

Source: Jeremy Siegel / McGraw-Hill

Regarding the article I'm referencing, the following quote reflects more current mindsets as well.

Stocks' advantages hold up even if you focus in on recent decades.

While the stock market took a beating in 2008, while bonds proved more resilient, the investment firm BlackRock found that you'd still be better off investing in stocks from 1994 to 2013.

Monitor the News, Play Safe

News can crush (and HAS crushed) client capital, so we're very cautious.

As you have all read in the past, you understand we aren't a "stocks purchase" company. Indeed, we are about the potential of stock offset and a way to minimize delta risk, but ultimately stocks are driven to their height or demise by news.

Ultimately, we are about mitigation of risk, and it's why we deal almost exclusively in indexes and ETFs, which are stock based, but highly diversified.

I hope this all makes sense. If it doesn't, feel free to drop me a note as I'm always happy to answer your questions, or address your thoughts.

Blessings always.

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