Why bonds must be always part of our overall portfolio mix
If one's retirement horizon is quite far away, they need not invest any retirement money in bonds. Bond's long term REAL (after inflation) returns are too low (just 2%) as compared to that of stocks (which is 7%). Note that above suggestion of not keeping any retirement savings in bonds for younger (below mid fifties) workers comes with a caveat. It's only meant for savvy investors (with higher risk tolerance ) who are able to effectively manage pain of loss during stock market downturns and stay course without losing any sleep. With 100% stock portfolio, pain of loss is expected to be most severe . So, unless you believe in long term potential of stocks and are willing to exercise patient, don't try 100% stock portfolio. Rather, like typical retirement saver, stay with target date retirement funds (which typically has decent bond allocation) so that short term losses during crashes is emotionally better manageable for your lower risk tolerance. Near retiree (tho