Are Bond ETFs affected by the stock market?
Asked 5 years ago
I'm new to this and I realized that my entire investment portfolio is now in stocks. I then read the "All Seasons Portfolio", where it recommends that you put 30% of your investment back into stocks and diversifying your investments in Bonds and Commodities as well. The idea is that if the stock market crashes, you'll still be protected because you don't have all of your eggs in one basket. I know I can buy Bond ETFs and Gold ETFs through my broker, but would still count as stocks if I do? Will I still be affected if the market crashes? e.g. if I buy Bond/Gold ETFs, and the worst happens, will my bonds also crash?
Andia Rispah Igobwa
Thursday, April 15, 2021
Bonds are a safer investment than stocks. The downside is they offer lower returns than stocks.
Most times, when stocks are high in value, bonds plummet and vice versa.
The best time to buy bonds is when the economy is doing poorly because they offer guaranteed regular payments.
In some instances, both bonds and stocks can go up in value when there's liquidity.
Therefore, keeping bonds in your portfolio is generally an excellent idea.
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