How to Set Up a Bond Portfolio
Time was, retirees could generate enough income from safe-haven bond investments to cover living expenses. But those days are long gone, thanks to years of low interest rates. In August, the 10-year Treasury note yielded 0.57%, a far cry from the 2.60% yield it paid a decade ago. In response, many investors have taken on more risk by investing in bonds that fetch higher yields, or by shifting more of their portfolio into stocks.
In a changing market, it’s time to remember why we hold bonds in the first place. They should play four key roles in a diversified portfolio. Some bonds provide a counterbalance to your stock holdings by holding steady when stock prices plummet. Others act as safety nets, preserving money you need to
