A general problem I’ve found, is that investors don’t understand the role that bonds should play in an investment portfolio. No two bonds are the same and bonds should not be viewed in isolation of your complete investment portfolio. I lay out some ground rules for investors to consider when it comes to managing their bond portfolios within their portfolios.

People worry that bonds don’t pay enough to live off of without an investor drawing down his net worth during retirement. Even with that concern I recommend 100% bond portfolios.

An unexpected explanation of why a short-term investment can be good for a portfolio designed for the long-term.

With interest rates near historical lows, some investors may be anxious about a possible rate climb and its potential impact on their fixed income investments. Rising interest rates typically cause existing bonds to lose value.

Stocks could rise solely due to a bubble and not because of fundamentals, but don’t buy them because they may have brutal crash. Best performing asset: U.S. Treasuries. U.S. Treasury Bond yields will go down. The world needs a safe haven since Euro’s are unreliable and China’s Renminbei is not investible for foreigners.

Investors paid $105.50 for every $100 worth of new 4.5-year TIPS purchased. That means this batch of TIPS will pay an interest rate that is 0.55% less than the CPI. Regular Treasuries, bearing fixed interest rates, offer no protection against unexpected inflation.