What do you get for your money when you invest in bonds? That depends on what bonds you’re investing in, and how much risk you want to shoulder in these turbulent times.
In my chart below, you can see the bond yields by category as represented by fixed income indices from ICE Bank of America Merrill Lynch.
As you take on more risk, the yield you may demand on bonds increases. The average yield of the junk bonds in the index above is 7.13%, while average T-bills yield 4.24%. Is a not-quite-three percentage point difference in yield worth climbing the risk ladder? That all depends on your risk tolerance, goals, your portfolio diversification, and other factors.
Action Line: When you want to talk about risk, bonds, and your portfolio, email me at ejsmith@yoursurvivalguy.com. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
