How Much Risk Should You Take with Bonds?

February 11, 2019
As investors get closer to retirement, they often start to think more about bonds—and about reducing risk.

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After you listen

  • To learn more about investing in fixed income, including tools and resources, visit schwab.com/bonds.
  • Talk to Schwab. Call us at 800-355-2162 or visit a branch near you.
  • To learn more about investing in fixed income, including tools and resources, visit schwab.com/bonds.
  • Talk to Schwab. Call us at 800-355-2162 or visit a branch near you.

Like any investment, bonds do come with their own set of risks. How can you best evaluate these different risks? It’s easy to be distracted by stories or personal experiences that aren’t necessarily representative of the current situation. In this episode, Mark Riepe talks with Kathy Jones, Schwab’s chief fixed income strategist, about the specific risks related to bond investing and how to objectively evaluate them.

You can read more about how people’s experiences living through tough economic times affected their future investment decisions in these studies:

  • “Formative Experiences and Portfolio Choice:  Evidence from the Finnish Great Depression,” Journal of Finance, February 2-17, Samuli Knupfer, Elias Rantapuska, and Matti Sarvimaki.
  • “Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?” Quarterly Journal of Economics, 2011, Ulrike Malmendier and Stefan Nagel.

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