Thanks for your response.It's always tempting to replace an asset after a decade of under performance and switch to another asset that is winning. Unfortunately, what usually happens is that you sell low and buy high. Bonds have done badly because interest rates were low after 2008 and then in 2022 there was a severe interest rate hike.
The unfortunately truth is that there is no way to get higher return with no interest rate risk. You can reduce your duration which is likely to get you a lower return. The return you stated are the past return, they don't necessary reflect future return. Bond funds now have higher yield compare to the crappy rates several years ago.
Diversification means some part of your portfolio will suck. In the first decade of 2000, stock return were negative and bonds look a lot better. In the decade that followed, bond return were terrible but the stocks were great. Having a diversified portfolio means you reduce some of your gain and losses to smooth out your return, but the ride will still be bumpy. You should view your portfolio as a whole and just learn to accept that some part of your portfolio will disappoint you.
Statistics: Posted by PGHunt24 — Mon Sep 16, 2024 10:12 pm