Bonds provide income and ballast when stocks fall—but interest rate risk means prices drop when rates rise.
Funds vs Individual Bonds
Bond index funds offer diversification and simplicity. Individual bonds suit specific liability matching.
Credit Quality
Treasuries and investment-grade corporates differ in yield and default risk. Junk bonds pay more but behave like equities in crises.
Conclusion
Match duration to your horizon. Near retirement, consider shorter duration to reduce rate sensitivity.