Skip to content

[Video] Investing: Why Are Bonds Important?

by Financial Design Studio, Inc. / April 9, 2020

ROBERT STOLL, CFP®, CFA®

[Video] Investing: Why Are Bonds Important?

The Stockmarket has had a number of good years this past many years. So strong in fact it can be easy to forget the value of having bonds in your stock market portfolio. 

The stock market tends to go up and and down, go from a bull to a bear markets. 

The great part about having bonds is it helps the overall volatility of your portfolio so you can stay invested in those scarier moments when the stock market is going down. Stocks are great because they give you great returns. 

But the trade off is that you have to take more risk to get those better returns.

Conversely, bonds give you a lower return historically than stocks do they have a much lower volatility than stocks.

So we always recommend whether you have short term or long term, you always have some allocation toward bonds. That way if the stock market has a volatility of 20-30%, the value of your investments won’t go down too much.

Have questions we can answer about the state of the market? Contact Financial Design Studio, Financial Advisors in Deer Park.

financial design studio financial advisor deer park Contact Us Medicare Part B

View More Financial Advisor Resources

fee only financial advisor deer park barrington chicago investing consolidate retirement accounts draft

Ready to find out more?

Contact us today for a free 30-minute consultation!

Recommended Reading

Higher Inflation

Will We Finally See Higher Inflation in 2021?

With another round of stimulus underway and consumer spending booming, will we finally see higher inflation in 2021?

Buy & Hold Investing vs Rebalancing

Day Trading versus Long Term Investing

Aesop's Fable "The Hare & The Tortoise" can teach us a lot about investing. Is it better to be a Day Trader or a Long Term Investor?

Posted in

Financial Design Studio, Inc.

We are financial advisors in Deer Park and Barrington, IL. A team with a passion for helping others design a path to financial success — whatever success means for you. Each of our unique insights fit together to create broad expertise, complete roadmaps, and creative solutions. We have seen the power of having a financial plan, and adjusting that plan to life. The result? Freedom from worrying about the future so you can enjoy today.