Bonds At Your Stage of Life
The key to a well-balanced portfolio is asset allocation and diversification. Asset allocation is spreading your money across a good mix of equity investments (shares), fixed income investments (bonds) and cash instruments to maximize the return of the entire portfolio. Diversification is investing in various vehicles across asset classes to reduce the risk that any one investment may pose to your overall portfolio.
Unfortunately there is no hard and fast rule, or formula, about how much to invest and where to invest. Your investment strategy will change over time, reflecting your investment horizon (how much time there is between now and when you want to access the money you are investing) and your risk tolerance (how much risk you are willing to take in exchange for a possible higher rate of return.)
By gaining insight into the factors affecting bonds, and determining key issues to consider before investing in bonds, you can be well-poised to invest with confidence. This section provides financial planning information and resources to help you evaluate bonds as an important part of your financial plan.
Your portfolio and your financial goals will change over time so when you review your financial plan, returning to this section may be helpful.