Ever wonder why people say bonds are such a good investment?
 
In this episode, I speak with Murray Williams about how bonds can fit into your investment portfolio and play a part in portfolio theory. The move up in interest rates over the last year and a half has actually created a potential breakaway from the 40-year downtrend in interest rates, which could have a big impact on the economy. Unfortunately, forecasting where rates will go in the future proves to be a very difficult task.
 
Key Points in the Podcast:

-The power of compound interest

-Types of bonds

-The inverse relationship between a bond’s price and its interest rate

-The difficulty of market timing

-The danger of investing with borrowed money (margin)

-The benefit of diversification: reducing drawdowns to your portfolio

-Debt instruments can serve the same purpose as cash as dry powder for opportunistic purchases, but provide superior returns to cash
 
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