Bond Mutual Funds as part of Your Portfolio Base

Bond Funds are a good thing to have in the right proportion.  So why have bond funds in your portfolio?  Well, here is the basic answer.  As stock prices rise bonds tend to go down.  But when stocks fall due to recession, market corrects etc., then bond prices tend to go up.  So you may lose money in one place but make it back up in another with the use of bonds in your portfolio.

Currently I do not have any bond funds in my portfolio due to my personal situation.  However that was not always true.  They add stability to your portfolio and help prevent you from taking huge financial losses during a market pullback or stock market correction. (we will talk about pullbacks and correction in another posting in the future).  Again, there are literally thousands of good bond funds out there.  I suggest you stay in your family of funds you already own if possible.  (remember your discounts)  Talk with your personal financial advisor and review several bond funds that have a good track record before making your final choice that you feel is right for you.  Always remember in the stock market, what goes up will come time and what comes down will go back up.  Bond Mutual Funds help you in limiting your losses in a down market.  A good bond fund in your portfolio to limit your losses in your base funds is highly suggested.  Why take the gamble?

Gus S.

Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.