#511 - Should I Continue to Own Bond Funds?

Bonds are a ubiquitous part of a balanced portfolio and in recent years bond funds have become even more attractive to many investors. However, due to rising interest rates, bond funds are now losing their appeal.

One listener asks whether she should call it quits on her investment in bond funds. In this episode of Retirement Answer Man, Nichole and I will explore this and other questions from listeners like you.

Stick around to hear my conversation with Dr. Bobby Dubois about energy and our relationship with caffeine. Find out once and for all whether caffeine is as bad for you as they say.

Should you dump your bond funds?

If you have bond funds in your portfolio you are also probably wondering whether you should dump them.

There is a difference between owning individual bonds and a bond fund. A bond fund is a portfolio of bonds so they operate a bit differently than individual bonds. With individual bonds, it doesn’t matter as much if their value fluctuates because the distributions will pay out.

Bonds are an important part of a healthy asset allocation. It is important to remember that when you have a balanced portfolio when something is down other parts of the portfolio are usually doing well.

Whether or not you decide to keep your bond funds should depend on where they fall into your financial plan. Listen in to hear why.