If You Invest in ONE Bond ETF, Make it This One

Don’t think bonds deserve a place in your portfolio? What if I could show you how to get twice the dividend yield on half the risk compared to stocks. Better still, what if by adding a bond ETF to your portfolio along with stocks and real estate, you could have beat the market this year with less volatility?

That’s the power of bonds. They’re not going to make your rich but will protect you and provide income when stocks fall apart. Even on higher interest rates this year, my favorite bond fund has provided a dividend yield more than twice what you get from stocks!

Bonds are a loan to the company. They pay interest twice a year and then return the loan value at the end of the bond’s life. That means companies legally have to pay back their bonds plus the interest. Stockholders only get a return and dividends as long as the company can produce profits and stay in business but bondholders have that higher right to assets. The interest rate or yield on bonds is largely determined by the company’s credit rating, a scale of how financially stable the company’s financials are and how likely it is to pay the debt back. Higher risk equals a lower rating and a higher interest rate on the bonds.

My Investing Recommendations 📈

The five bond funds I’ll highlight today outperformed while paying more than twice the dividend yield and at half the risk of stocks. Bond funds offer an easy and cheap way to invest in bonds, usually holding thousands of individual bonds in a single fund. Investing directly in each bond usually isn’t cost effective for investors because you pay a commission on each bond and don’t get the diversification you need.

0:00 Bond ETFs for Safety Investments in a Crash
1:10 A High Yield Bond Fund for Higher Cash Flow
1:36 What are Bonds?
3:39 Are Bonds a Good Investment?
4:38 Unloved Bonds with Upside Potential
6:03 The Highest Dividend Bond ETF
7:09 How to Invest in Bond ETFs
8:20 A Bond Fund for Super Income
10:06 My Favorite Bond ETF to Buy Now

Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

[NicholasBall]

I admire your dedication to educating your audience. We all aim for financial stability and a better life. Achieving this is possible through wise investments, frugal living, and careful budgeting. I'm grateful that I learned the importance of working hard for financial freedom at a young age.

[Brennanoliver]

Roughly $120K in my portfolio are in tech/TSLA stocks, can I get an advice on any other stocks that I can acquire to diversify my reserve across multiple markets while creating a comprehensive portfolio allocation that balances my concerns of risk aversion and returns that meet yearly inflation.

[homersreluctantodyssey]

great info, just started adding shares of Vanguards total bond market BND to my portfolio. low expense rate and steady yield as well as seeing the price being beaten down made it seem like a decent addition to a long term portfolio

[lucyameliaflynn]

Starting early is the best way of getting ahead to build wealth, investing remains a priority. The stock market has plenty of opportunities to earn a decent payouts, with the right skills and proper understanding of how the market works.

[milissabaadsgaard]

I love how balanced and supported your portfolio choices Are! Were doing so much better thanks to YOU! Thank you so much.

[davidv.]

I lost over 200k with AGG since 2/21 and never recovered. So owning corporate bonds is definitely not a bed of roses.

[sureshh]

The rich remain rich by spending less but investing, while the poor remain poor by spending
like the rich.Yet with no investment.

[josephhogue]

✅ Instant Buy/Sell Notifications and Stock Ideas
✅ Stock Split and IPO Alerts
✅ Monthly Live Q&A
✅ ...MORE!

[ambroseg.asante]

I hold TIP in my Roth IRA and love the monthly cash flow. Also loving the Series I bonds💞💵

[chaseroberts]

As long as you have a long view bonds are the best. TIP pays an incredible dividend that increases it's yield as the price declines. I wouldn't be surprised if it cracks 100

[thesig]

Yea I still prefer index funds for the potential growth. The POTENTIAL to earn more rather than bonds basically being a flat rate.

[amiV]

THANKS JO! Perhaps its prudent to invest in Bonds for emergency savings

[pvfeBAx]

In terms of DCA allocation I put 10% into AGG and 10% into VNQ. My stock heavy brokerage account had a year head start on my other brokerage account, and I don't feel like rebalancing my portfolio just yet.

[billgober]

These things pay usually way less than 5% and as their price is dropping you're lucky if you end up 2% in the green. Think if you're averaging a 3% yield and you lose 2% on the bond price what did you make? 1%. So knowing that what is the point? It's like putting your money in a crap savings or money market. Sorry not agreeing with Joe on this one. A lot of these ETFs are a waste of time.

[edward.abraham]

My spouse and I are diversifying our long-term investment portfolio by adding various stocks and ETFs. We've allocated $220k to begin with, focusing on inflation-indexed bonds and companies with strong cash flows. I think the current market presents a good opportunity for long-term gains, but I'm also interested in learning ways to make short-term profits.

[RetireandGo]

Thank you so much for these funds and the information
I’m wanting about 10 percent bond exposure and I needed some suggestions

[mcop]

Great advice here! I also own treasury bill: BIL which right now pays 5%...as interest rates are cut will move out of it.

[arigutman]

Totally dependent on your age when it comes to bonds... With the market deep into red or at least heading into the direction of deeper red, younger investors should be buying discounted stocks and simply waiting patiently.. talk about a massive pay out to come when someone just has some PAYtience!

[RobT]

Really liked the video, I only hold bonds in my 401k and Roth IRA. I only invest in REITS with my Roth IRA, so I don't pay taxes on that income in my retirement. Plus all the dividends are on DRIP so it will compound and generate me tax free income in retirement without ever having to touch the principal. I also have a taxable brokerage account that is my main portfolio that is all stocks with no ETF'S. I don't know if you would count it as a bond like investment but I have a high yield savings account for a emergency fund and so some of cash is earning interest and don't have to sell any stocks if I need cash because I am still young and in the building stage.

[georgesontag]

Don't you think a better way to go is to buy a fund that holds all the bonds to a certain maturity date ? This way you don't have the interest rate pressure. The funds closes on that date and your guaranteed all your money back. Open bond funds hold too many bonds with no true maturity date.