Why Own Bonds in This Low Interest Rate Environment?- Season 2: Episode 9
The standard, cookie-cutter portfolio often consists of just three main assets: stocks, bonds and cash. One may argue that this is not enough diversification, but that discussion aside, some investors seem to find themselves these days replacing some of their “riskier” stock portfolio with the relative safety of US Government bonds. But interest rates are at historic lows, and the reward for owning bonds is minimal, at best. Are people really satisfied with a 10-year rate of return that’s currently paying less than 1 percent annually? Maybe: but there may also be some bond alternatives available to you that pay a bit more than that.