Monday, February 18, 2008

Why mixing Bonds and CDs with stocks actually increases your risk

This article was published on TheStreet.com and therefore I can only post here some bits, and you'll have to go to the article to read it.

Warning: If you are a financial adviser, financial planner or another type of "consulted one," the following article might pose a risk to your health. By reading further, you agree that the author is not liable for any symptoms or problems you may have due to your response to this article, and you bear full responsibility to all such.


...Why supposedly? Don't bonds and CDs have a different (lower) risk profile than stocks? After all, bonds and CDs offer a guaranteed return and as such, are not "risky," right?

The answer is yes and no. Yes, bonds (only if held to maturation maturity-date) and CDs do offer a guaranteed return. No, they don't lower a portfolio's risk.

Bonds and CDs Don't Do What?!

Enjoy the full article here and if you like it, do press "I recommend it" :-)

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