1. Portfolio 1:
20% Corporate Bonds
80% Stocks
2. Portfolio 2
15% Government Bonds
85% Stocks
Most probably these 2 portfolio will have almost the same long-term return, but the latter one will be less volatile. As an asset class, I don't like corporate bond funds(Let alone individual corporate bonds).
The recent default rate of corporate bonds are relatively low(2-3%?), but you get what you pay for. The spread between the coupon of government & corporate bonds is also small.
My last post.... You need to really understand how to diversify a portfolio.
20% Corporate Bonds
80% Stocks
2. Portfolio 2
15% Government Bonds
85% Stocks
Most probably these 2 portfolio will have almost the same long-term return, but the latter one will be less volatile. As an asset class, I don't like corporate bond funds(Let alone individual corporate bonds).
The recent default rate of corporate bonds are relatively low(2-3%?), but you get what you pay for. The spread between the coupon of government & corporate bonds is also small.
My last post.... You need to really understand how to diversify a portfolio.