If you’ve been following my blog lately you’ve been noticing that I’ve been questioning why one would ever have any money in bonds in the long-term due to their sub-par performance vs. stocks. I’ve had tons of great comments and I thought I even summarized things pretty good, but in the end I don’t know that I really had it nailed down. I was still able to shoot my mouth off somewhat about how in the long-term stocks are still the best investment and I really kind of wanted someone to stick my foot in my mouth, well maybe not that harsh but there are two great posts about why bonds are a vital part of an investment portfolio.
Well The Finance Buff posted this response to my article on his blog and I think he did make some very good points for having a portion of bonds in your portfolio. He also referenced MakingOurWay’s post on the role of bonds in an investment portfolio a simplification of modern portfolio theory. I love writing that makes things simple and his analogy of bonds being a battery and how that you can leverage that battery during times of poor stock performance to rebalance and buy stocks low is a great way to think about things and I think may have me drinking the bonds are ok kool-aid.
Anyway check these articles out and thanks to everyone who commented on my posts and tried to make me see the light.