Mar 17 2025 13 mins 18
Bonds have been a staple in portfolios for decades, often hailed as the “safe” investment that brings stability and protects wealth. But what if I told you that this belief is outdated, and in many cases, dangerously misleading?
In today’s episode, I take a hard look at why bonds are overrated, the risks most investors overlook, and whether they deserve a spot in your portfolio at all. While bonds can serve a purpose, blindly following the 60/40 portfolio mantra without questioning its effectiveness can be a costly mistake.
We’ll break down the three biggest risks of bonds and why they may not be as “safe” as you think:
✅ Interest Rate Risk – When rates go up, your bond values drop. It’s that simple, and 2022 proved it when the Bloomberg U.S. Aggregate Bond Index suffered its worst year in history.
✅ Inflation Risk – Your 3% return isn’t a real 3% return if inflation is running at 4-5%. That’s a recipe for losing purchasing power over time.
✅ Opportunity Cost – For every dollar you park in bonds, you’re missing out on investments with real growth potential—whether that’s stocks, real estate, or other wealth-building assets.
Many investors believe bonds guarantee stability, but I argue that true long-term financial security comes from growth, not just preservation. The reality? A well-diversified stock index fund has statistically near-zero risk of going to zero, while bonds can quietly eat away at your purchasing power.
So, do bonds ever make sense? Maybe—if you’re already financially set and just want to protect what you have. But for most investors, the classic advice to shift heavily into bonds at retirement may be one of the biggest financial missteps.
This episode isn’t about hating bonds—it’s about thinking critically before defaulting to outdated strategies. Are you actually protecting your wealth? Or are you unknowingly holding yourself back?
👉 Tune in now, challenge conventional wisdom, and decide for yourself.
