With Interest Rates Falling, Why Do You Own Bonds?

With Interest Rates Falling, Why Do You Own Bonds?

How an asset class such as bonds can play different roles in your portfolio depending on your investment philosophy.

In this episode you will learn:

  • What are bonds and how can they be used in investment portfolios.
  • What is interest rate anticipation.
  • Why individuals have an advantage over institutions because they don't have to worry about outperforming a benchmark when it comes to bonds.
  • Why U.S. interest rates could rise and fall from current levels.
  • Why China is unlikely to sell all of its U.S. Treasury bonds.
  • Examples of higher yielding strategies other than bonds that can benefit from falling interest rates.


Thanks to LinkedIn and Policygenius for sponsoring the episode.

For show notes and more information on this episode click here.

  • [0:20] Generating a return on bonds.
  • [2:22] David explains why his own portfolio has not seen huge success in bonds.
  • [3:56] What is the role of bonds in your portfolio?
  • [6:41] A historical analysis of bonds.
  • [9:55] The advantage of being an individual investor.
  • [10:59] Speculating whether or not interest rates will go up or down.
  • [14:50] The effects of the global economy on US bond behavior.
  • [17:12] Strategies for diversifying your portfolio.
  • [20:49] What to focus on as an individual investor in bonds.
  • [22:19] Comparing the story of the carpenter and the tree to the life of a bond.
  • [24:23] Deciding which path to choose for the use of your bonds.

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