Investing in a laddered bond portfolio like the Guggenheim BulletShares defined maturity bond ETFs gives investors "a little yield, a defined maturity price if rates rise and liquidity to switch and go 'all in' to the stock market when the next great opportunity or crash arrives, he said.
"It's hard to convince clients to buy in though," said DeShurko. "The key is that you have to be willing to move out of bonds and into stocks when everyone is saying that is a really dumb idea. Even with pretty bad timing, it isn't so hard to break even with a stock only buy and hold strategy, but you have eliminated a lot of stress."
The premise of a 60/40 stock/bond mix dates back from a strategy devised by pension funds and the mix was intended to produce stable growth with bonds "cushioning" the risks of the volatility in the stock market, said Robert Johnson, president of The American College of Financial Services in Bryn Mawr, Pa.
No comments:
Post a Comment