AAII: Bonds Instead of Stocks

                It seems I forgot to publish this last night.  So the short explanation is that the market fell 200 points Friday due to continuing concerns over interest rates and a scare that smartphone demand is weakening, which throws a monkey wrench in all the FAANG action.  But volume is still below average while investors continue waiting out more Q1 reports.  17 percent of companies have reported, 80 percent have topped forecasts.  

... and now on to more current business ... 

In conversations I've had with AAII members during this past year, there has been some controversy over the wisdom of maintaining the traditional portfolio mix of 60% stocks and 40% bonds, using stocks for growth and bonds for safety, security and a hedge against market downturns.  This has been conventional wisdom for investors for many decades but some have argued that it no longer applies in this low interest rate environment we've had for nearly a decade now.

This is why I found this week's AAII article about bonds to be particularly timely for the author agrees with the position that a position in bonds, particularly muni bonds, is in fact still a very wise strategy for investors concerned about safety.  So below is the link "Using Bonds Instead of Stocks For Income."  I also came across an article from 2013 that was reprinted in January entitled "Should You Maintain An Allocation to Bonds When Current Rates Are So Low?' once again making a strong argument that the answer is definitely yes!  So the two links are below.  If nothing else they provide a refresher course as to why conventional wisdom has not gone out of style.

4-11-18 AAII: Bonds Instead of Stocks


1-16-18 AAII: Allocation Bonds v Stocks