/biz/ - Business & Finance

>>53104950
bonds have two schools of thought. One is to just hold the entire bond market (BND) and chill. But the average duration is barely 6 years so it servers as an intermediate style bond fund. So most investors will ignore bonds and focus all on equities until they are close to retirement, i.e. their time horizon matches the bond fund.

Then there is the second school of thought, and that is to invest into long term bonds over the long term (duh). Because even though they crash when rates rise or inflation occurs, that risk and subsequent higher rate yield is where the reward comes from. For some reason a lot of investors and even bogleheads forget the key risk vs reward principle when it comes to bonds.

What you'll see is that bonds act similar to reits, or vice versa, except they won't crash with the stock market like reits do.

But the problem is that we all know how this modern world plays out. It's hard to be long term bullish on bonds when this world seems obsessed with inflation