Why bonds no longer stand alone in many investment plans

Bonds once offered investors steady income and relatively low risk, making them a common choice for retirement savings and protecting wealth. Their appeal grew as interest rates fell, increasing the value of older bonds with higher rates.

That dynamic can reverse when rates rise, reducing the market value of existing bonds for investors who need to sell before maturity. Fixed payments can also lose purchasing power during inflation, while taxes may reduce the effective return.

Bonds still provide income and can lower overall portfolio risk, but they offer less growth potential than stocks and now compete with savings accounts, certificates of deposit, dividend-paying stocks and other assets. Their role is increasingly as one part of an investment plan rather than an automatic choice for every investor.

Read the full story at 247wallst.com.