Ep. 1979: Bonds Help You Sleep

Bond prices are falling as long-term rates rise, but that doesn't mean bonds have failed. Don and Tom explain why bond prices and yields move in opposite directions, why a normal yield curve can look painful, and why the real job of bonds is stability—not stock-like returns. They compare broad intermediate-term bond funds with Treasuries, including the state-tax advantage of VGIT for some investors, and revisit the long-run case for a balanced portfolio. The bottom line: stop trying to time interest rates and let bonds do the boring work. Then they answer listeners on skipping bonds when heirs are the real beneficiaries, using fixed annuities inside a CD ladder, FDIC versus state guaranty protection, and simple funds-of-funds for one-stop diversification. 00:40 Welcome and model-airplane weather 01:42 Why bond yields rise when prices fall 05:22 What bonds are actually for 08:40 Stop trying to time interest rates 11:36 BND, VGIT, and the state-tax edge 17:26 Can wealthy heirs justify an all-stock portfolio? 19:07 Fixed annuities inside a CD ladder 22:57 Funds-of-funds for simple diversification Questions? Comments? Click!