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One of the most important investment decisions you can make is to choose the mix of stocks and bonds that’s right for you. But diversification goes further than just this mix. Take bonds, for instance: You can think of bond diversification in three main categories: bond type, bond maturity and bond sector.
|Bond Ladder Recommendations
|Short-term (up to 5 years)
||30% - 40%
|Intermediate-term (6 to 15 years)
||40% - 50%
|Long-term (16+ years)
||15% - 25%|
If you find it difficult to properly diversify with individual bonds or prefer the professional management of a mutual fund, bond funds* may be right for you. Bond funds are generally diversified by maturity and sector, and can be an attractive alternative for many investors.
If you’re looking to improve your bond mix, contact your financial advisor. Together, you can determine which types and amounts of bonds are appropriate for you.
Diversification does not ensure a profit or protect against loss.
*Mutual fund investing involves risk. Your principal and investment return in a mutual fund will fluctuate in value. Your investment, when redeemed, may be worth more or less than the original investment.
Getting tax-free income may make sense so you can preserve every dollar possible.Read more
Historically, stocks have provided higher returns than both bonds and cash, but with higher volatility, so are they a good investment today?
How much you withdraw helps to determine how long your retirement income may last. But how much you rely on your portfolio for that income can determine your potential sensitivity to market fluctuations.