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078 - How Should You Diversify the Bond Part of Your Portfolio?
Description
In this podcast episode, we have a listener question:
Since interest rates are so low and the bond market is so much bigger than the equity market, what are a good mix of bonds for a portfolio with a lot of bonds? Should it only be high quality corporate or should it be some TIPS, CMO, or anything else? There are a lot of options for bonds.
Planning Points Discussed
- Interest Rates, Credit Rating & Terms of Bonds
- Treasury Inflation-Protected Securities
- Government Bonds vs. Corporate Bonds vs. Collateralized Mortgage Obligations
- How to keep your purchasing power
- Other issues (i.e. risk tolerance, danger of yield chasing, inflation)
Timestamps:
2:05 - What types of bonds should I invest in?
2:30 - What is a bond?
4:30 - Mortgage Terms (30 year, 20 year, 15 year)
8:30 - Qualified Tax Treatment
9:43 - Bond Yields
12:30 - Where do I start when trying to figure out what’s right for me?
15:30 - The Purpose of Holding Bonds in a Portfolio
20:00 - The Danger of Yield Chasing
LET'S CONNECT!
James
Scott
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