In the investment world, there are two words we hear more than any othersstocks and bonds. While each can offer their own advantages and disadvantages, both should be included in your portfolio. As a general rule, stocks have outperformed bonds since 1926; returning 10.4 percent against government bonds 5.4 percent showing.
However, when stocks go badand they willbonds will always be there for you. Over short periods of time (like the bear market of 2000 to 2002) bonds easily outpaced the growth of stocks. However the world of bonds can be a confusing one, so lets learn a little more about them.
Why to get fond of bonds
The first word in smart investing is diversification. That means you own a good mix of volatile stocks and steady bonds in your portfolio. When one takes a hit, the other will usually hold steady.
Whereas stocks will only give you liquid results when you sell, bonds pay interest regularly, making them an attractive investment choice for retirees looking for regular income.
Bonds are also some of the some of the safest investment choices you can make, second only to cash. U.S. Treasuries offer a risk-free vehicle of stashing...
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