Chapter 10. Why Even Conservative Investors Need Some Exposure to Other Markets
We have seen that bond investments have usually been safe, but that during periods of economic upheaval, even bonds can be riskier than you might desire. Wouldn’t it be great if there were another type of investment that you could add to your bond portfolio that would decrease its risk without hurting (and maybe even helping) returns?
There is such an investment—stocks. Adding some stocks to your bond portfolio would historically have made it safer, even though stocks by themselves have been far riskier than bonds. In this chapter, you will see why this has been the case and how much of your conservative investment portfolio you should allocate to stocks.