Do You Really Need to Invest in Bonds for a Balanced Portfolio?

One of the most common nicknames for your retirement portfolio is "nest egg," but in the realm of food metaphors, it might be better to think of it like a holiday feast. So many dishes, so many choices, and to be healthy, you need to pick a properly balanced meal -- but also one that suits your personal tastes. So how should one do that? The answer comes under the heading "portfolio allocation," and it's the focus of this episode of Motley Fool Answers.

In this segment, hosts Alison Southwick and Robert Brokamp consider an asset class much lauded for “safety,” but not usually for much else: bonds. What they do have going for them is that usually, when stocks plunge, bonds rise. But not always. They also consider the “bread and rolls” portion of your investment meal: cash, Treasury bills, and similarly liquid holdings.
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[HaroldSimmons-mfep]

I believe investors should always put their cash to work. In 2024, we’re likely to see greater market diversification. I plan to invest around $350, 000 of my savings into stocks next year, aiming to achieve significant growth—possibly millions—by 2025.

[HumbleTrader]

Except that the stock market went up around 30% in 2019 and over 16% in 2020 (after fully recovering from the collapse in the first quarter of 2020). By the way, most people who listen to Motley Fool would be better off in Index Funds instead of picking stocks. Motley Fool used to admit that most people would be much better off in Index Funds but I guess if everyone just dollar cost averaged into index funds then Motley Fool would be out of business.

[engyn]

Oops, you guys just forgot to do this in real terms. If you add inflation, the worst years for bonds are much worse!

[JayMomoa-]

If you had $250k, which investments would you go for in terms of maximizing returns and mitigating risks? I'm semi-retired and only work 7.5 hours weekly. Looking for opportunities in the market that can fetch me millions, then I can retire.

[triquepersonalwork]

Why does everything on this set, including the clothing these people are wearing looks like it came from the early 90’s!? Lol 😆

[MetalBum]

This was pre coronavirus. Everyone thought bond yields would go up so value go down
Opposite happened. Bond yields went to 0% so bond values went up a LOT

[johngerard]

Vanguard's Wellington fund is about 60% stocks and 40% bonds.

[fredatlas]

At the moment UK bond index funds have been hammered. I just hope the interest rates will come down at some point and bond prices go up again

[Lucky_]

100% equities with a 30+ year outlook. Any less equities makes little sense for me for my timeframe.

[taggthis]

Thank you, I am just about to make my first index fund purchase via vanguard. I intend to invest long term and just leave the funds ‘locked away’ for at least 5 years forgetting about it. I am just getting slightly stuck on how I balance my percentage portfolio between equity vs bonds. Low risk is good for me. Any tips or related videos you can recommend?

[CommandoX]

I now feel more hungry, than informed.

[storts]

What year was this made? 2018?

if inflation rises again will Bonds not be a good investment?

[josephkennedy]

you left a *lot* out of this discussion on t-notes and t bonds. 1. unlike CD's they are marginable. 2. easy to build a short term ladder. 3. you can buy them at auction either comp or non comp. 4. when it makes sense to buy them in open market/post auction. 5 tax implications. disappointed. (

[Jima]

I’m afraid of bonds because every time we have to raise the debt ceiling, lawmakers wait until almost midnight to pass it and a lot of Republicans vote to not raise it, even if it would cause a default on our debt. We’ve come too close too many times, so I will never buy bonds.

[Julianwatts]

One of my biggest financial mistakes was not being born in 1930 and dropping $100 into the S&P 500.

[clearcutlawncare]

42 second in. Well that's all I needed to know see you guys later. Lol jk

[MetalBum]

Bonds have done well since the filming of this

[mattball]

"Trying to pick up a quarter in front of a steam roller" ... Bonds are trash. Maybe short term corporate but...

[marcellarice]

You said 40% out of the stock market-after you corrected yourself. What do you mean?

[joec.]

my sep ira account


50% 3 fund portfolio (30/30/30)


45% stocks


5% specs




so far so good.