“Fixed Income is Always a Good Foundation for a Portfolio”

From Simon Constable at the Wall Street Journal:

Given the expected rise in interest rates, does your portfolio still need a healthy allocation of bonds? Probably yes, according to the experts.

Many agree that the security and diversification bonds offer shouldn’t be spurned just because the direction of rates could be changing. But, depending on the investor, now may be a good time to adjust the size of that allocation and its contents, with regard to lengths of maturities and levels of risk.

“Fixed income is always a good foundation for a portfolio,” says Eddy Elfenbein, Washington, D.C., author of the Crossing Wall Street blog and newsletter. “Security and safety.… Each month and quarter there is a regular check from the coupons.”

Mr. Elfenbein says he generally suggests a 30% allocation in bonds once investors hit 40, and an increasing allocation as the years progress. Younger investors may want to be in stocks only, he says, because they will be able to weather more market swings.

Posted by on July 7th, 2015 at 7:52 am


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