Ray Dalio, the American billionaire hedge fund manager, claims that you would have to be mad to own bonds right now.
His advice runs completely contrary to Warren Buffett’s advice to have at least a 10% allocation towards bonds.
It is even further away from Vanguard’s Founder Jack Bogle suggestion to have bonds linked to your age – 30% in bonds if you are 30 years old as an example.
Who is right? That is the subject of the video below:
Key points include:
- Markets have always beaten bonds long-term but are more volatile
- Bonds outperform during periods like 2008 and March 2020
- Having bonds gives a rebalancing opportunity, however, don’t go overboard with bond allocations
- Bonds don’t pay as much anymore compared to the 1970s and 1980s and that has changed things in some ways.
- Having an accumulation and preservation stage towards retirement makes sense.
Is gold likely to be a good investment in 2020 and indeed long-term?