Episode 36: All About Bonds with Dr. Brandon Renfro

are bonds risky

When you’re investing, it can be hard to tell between “the way it has always been done” vs. what is actually a good idea.  In particular, old ideas about what portion of your portfolio should be in bonds may not be right for your situation.

This week, Devin talks with Dr. Brandon Renfro, a PhD in behavioral economics.  Devin and Brandon talk about bonds, when they’re right for you, and when they should be reconsidered.  Brandon does a great job of explaining different types of bonds, why they are considered a good investment, and how our current low interest rate situation changes the value of bonds as part of your portfolio.

We typically think of bonds as a safe asset class, but it isn’t as simple as most people think.  Interest rates have been low for quite some time, and it is inevitable that interest rates will increase in the future.  There’s a very real risk of seeing your portfolio decline, even though you’re invested in an asset class that is supposed to be safe.  Understanding how this works, and how it could impact your investments, is the first step in making smart decisions about when bonds are appropriate for you, and which bonds you want to choose.

Highlights include:

Why rules of thumb shouldn’t be considered hard and fast rules

What are you giving up by having too much in bonds?

How an individual bond functions differently from a bond fund

Different characteristics of different bonds, including tax benefits, the security of the bond issuer, and the details of the particular bond

Resources mentioned in this show:

Enter the Echo giveaway at www.bigpictureretirement.net/echo

Devin and John’s free ebook: www.bigpictureretirement.net/steps

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