Sally Vix wrote:
Also what happened in the first half of 2016 that caused bonds yields to absolutely crater?
Not sure anyone would ever want bonds unless he or she is in their later years. Peter Lynch preached that you have to be in equities. Historical returns - 11% (with dividends reinvested) versus 4%. To double your portfolio at those returns equities would double in 6 years and bonds in 18 years.
Depends what 'later years' means, but generally the only people with money are in their later years. But in general, the reason to own bonds is that life happens. All at once, sometimes. Say 2008. The stock market falls 50%, your house 25%, you lose your job. You want to start selling stocks when they are cut in half?
Bonds are stores of value - ways to keep money safe. Sometimes, like in 1980-2014 you'll make decent money. Aren't bond returns ahead of bond returns for some recent 30 year period?
And bonds pay interest for people to live on.
Anyway, you don't expect to make much money in bonds, no.
It's also worth noting that a balanced portfolio of bonds and equities (ratios adjusted for risk) is basically modern portfolio theory which is not only mathematically rigorously proven, but the guy who came up with the theory won a Nobel Prize in Economics. I 100% guarantee you that any significant fund at Vanguard or Blackrock ascribes to this