More Money: Will Stocks Always Beat Bonds?

What to expect in the medium term and what I’m doing as a result

Photo by Artem Podrez: https://www.pexels.com/photo/a-woman-in-white-dress-shirt-holding-pieces-of-paper-5716027/

I’ll admit it.

I’ve never been a huge fan of bonds.

I even suggested once that rental property can be a better way to diversify your stock holdings without giving up most of your return as you do with bonds.

Want Better Diversification for Your Retirement Portfolio than Bonds?

So, stocks or bonds — which is the better investment?

This is a somewhat tricky question.

Stocks are inherently riskier than bonds, especially US treasuries — considered a near-zero-risk asset. This is because stocks provide zero guarantees of higher prices tomorrow, next month, next year, etc.

US treasuries, on the other hand, offer guaranteed interest plus the return of your capital upon maturity.

Can you lose money on bonds?

Yes, you can.

If you buy them when interest rates are low and sell (before maturity) when rates are higher…